Snap Inc (SNAP.N) saw its stock plunge 25% on Thursday after the owner of photo messaging service Snapchat said Apple Inc (AAPL.Oprivacy )’s rules on iOS devices harmed the company’s ability to target and track digital advertising. The issue was aggravated by global supply chain interruptions and staffing shortages, according to the Santa Monica, California-based firm, which generates the vast bulk of its revenue from selling digital advertising on the app. This forced clients to cut back on their advertising expenditures.
Snap’s earnings, which came in first among the main social media companies, put a pall over Facebook Inc (FB.O) and Twitter Inc (TWTR.N), which posted third-quarter earnings next week. On Thursday, Facebook shares plunged 6%, Twitter fell 7%, and Alphabet (GOOGL.O) declined 3% as a result of Snap’s results.
In June, Apple released a set of privacy changes that prevent internet advertisers from tracking iPhone users without their permission.
During a conference call with investors, Snap Chief Executive Evan Spiegel noted that a new admeasuring tool supplied by Apple impeded companies’ ability to measure the efficacy of their commercials, upending many of the ways advertisers have been accustomed to doing business for decades.
He admitted, “This has been a frustrating setback for us.”
Snap also stated that it expects the Apple privacy changes and worldwide supply chain disruptions to continue into the fourth quarter, which is normally when brands ramp up marketing for the Christmas season and when social media businesses earn the most money.
Snapchat has sought to entice and keep users by adding new features such as the ability to use a map tool to find restaurants and retailers, as well as the option to play virtual games with pals.
The quarter’s net loss was $72 million, or 5 cents per share, down from $199.9 million, or 14 cents per share, the year before.
Snap expects revenue of $1.16 billion to $1.2 billion in the fourth quarter, with 316 million to 318 million daily active users.
