Snap’s Stock Slides as It Blames Apple’s Privacy Changes for Hurting Its Ad Business

Apple’s new rules have made it difficult for advertisers to test and measure their campaigns, and therefore have scaled back on their spending, according to Snap. Its share price fell to around $57 after closing at $75.11. Shares of other tech companies who also depend on advertising, including

Facebook Inc.,

Twitter Inc.

and

Alphabet Inc.,

also fell in after-hours trading.

Santa Monica, Calif.-based Snap said Thursday that it projects revenue for the quarter ending Dec. 31 to range between $1.17 billion and $1.21 billion, which would be up from $911 million in the year-ago period but below the $1.36 billion that analysts polled by FactSet were expecting.

“While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our ad partners to measure and manage their ad campaigns for iOS,” Snap said.

To resolve the problem, Snap said it is developing additional first-party tools to help its ad partners achieve their goals.

The company also attributed its holiday-quarter outlook to supply-chain and labor-market shortages, saying those problems are indirectly crimping its ad business by hurting business for its ad partners.

“This in turn reduces their short-term appetite to generate additional customer demand through advertising at a time when their businesses are already supply-constrained,” Snap said.

Snap, whose Snapchat app is popular with teens and young adults, has stood out from its larger peers throughout the pandemic by posting steady revenue and user growth. It has launched new features to appeal to businesses in more ways than just advertising. For example, one called My Places offers users personalized recommendations of places to eat and visit based on their friends’ interests.

Spotlight, a video-sharing tool the company introduced last year to appeal to content creators, received twice as many submissions in the latest quarter compared with the second quarter, Snap said.

Also in the latest quarter, which ended Sept. 30, Snap said revenue rose to $1.1 billion, slightly below analysts’ expectations and its own guidance. Daily users climbed 23% to 306 million.

Snap also said it narrowed its loss to $72 million, down from $200 million a year earlier. Analysts were expecting a loss of $156 million.

Earlier this week, Snap announced that users with Pixel 6 phones from Alphabet’s Google will be able to access Snapchat from their lock screens. That means they can more quickly open the app by double-tapping their devices. Snap also said it is working with Google to build unique augmented-reality experiences.