- Snap Inc (SNAP.US) posted mixed quarterly figures
- iPhone’s privacy settings impacted Snap’s advertising business
- For Q4, Snap expects a revenue slowdown
Snap Inc (SNAP.US) stock tumbled over 20% in pre-market after the company posted mixed quarterly results and provided a weak revenue outlook for the current quarter. Social media company reported adjusted earnings of 17 cents a share on revenue of $1.07 billion. Meanwhile markets expected adjusted earnings of 8 cents a share, on revenue of $1.1 billion. Snap’s net loss narrowed 64% to $72 million, from a loss of $200 million a year ago. However, the current-quarter company expects revenue in the range of $1.16 billion to $1.2 billion, well below analyst projections of $1.36 billion.
Company reported 306 million daily active users (DAU), up more than 4% from the 293 million the company reported in April. That figure is up nearly 23% compared with the 249 million daily users the company reported a year prior. Snap expects that this figure will increase to range between 316 million and 318 million in Q4, while Wall Street expects 311.8 million daily active users in the fourth quarter.
"We missed the lower end of our guidance by $3 million due to a few key factors, including changes to advertising tracking on (Apple's) iOS and macroeconomic factors that have impacted our advertising partners," said Chief Executive Evan Spiegel. Snap blames Apple's privacy policy, which the company says blocks ad revenue. Apple rolled out new privacy features as part of its iOS 14.5 update earlier this year, which gives iPhone users the ability to more easily opt out of letting apps track their behavior and sell their personal data to advertisers. However, Snap CEO argued that the company has gotten big enough to be able to navigate what he called "significant headwinds" related to changes in the way the latest iOS operating system handles targeted advertising and ad optimization. Spiegel also mentioned that problems with supply chain and labor shortages negatively affected company's performance.
Negative sentiment also affected other social media giants. Facebook (FB.US) and Twitter (TWTR.US) both dropped as much as 4% and 3% in pre-market, while Google parent company Alphabet (GOOGL.US) and Pinterest (PINS.US) fell over 2%. Facebook, Alphabet and Twitter are set to report earnings next week.
Snap Inc (SNAP.US) stock plunged more than 20% in pre-market and price is currently testing major support at $60.00 which coincides with 38.2% Fibonacci retracement of the upward wave launched in August 2020. Source: xStation5
