Earnings: Snap Misses Q3 Expectations, Shares Plunge
Snap Inc (NYSE: SNAP), the owner of social media platform Snapchat, has posted its earnings report for the third quarter of 2021, showing lower revenue than expected from broad analyst estimates. Snap stock fell over 20% following the earnings report, indicating significant investor displeasure.
- Snap Inc pulled in $1.07bn in revenue in Q3, versus analyst estimates of $1.1bn, according to Refinitiv data. It was up 57% year-over-year and slightly from $982mn in the preceding quarter.
- A major contribution to Snap’s revenue shortfall was Apple’s iPhone privacy changes that disrupted the former’s advertisement business. The changes obstructed social media platforms like Snap from delivering targeted ads to iPhone users, a user base that usually accounts for a great deal of mobile advertising revenue.
- In the words of Snap CEO Evan Spiegel, the company’s response to Apple’s privacy changes didn’t bode as well as expected and thus dragged its bottom line. Similar issues are also affecting rival social media platforms like TikTok and Facebook.
- Though revenue lagged, Snap still performed relatively well, boosting its revenue at a healthy pace and largely reducing its quarterly net loss to $72mn, down 64% year-over-year.
- Snap stock (NYSE: SNAP) fell 22% following its Q3 earnings report on Thursday. It’s one of the largest one-day drops for the stock on recent record, indicating considerable investor displeasure with the latest results.