Snap falls short of Wall Street estimates for quarterly revenue

Snap fell short of Wall Street estimates for quarterly revenue as the owner of Snapchat said privacy changes implemented by Apple on iOS devices hurt the company's ability to target and measure its digital advertising.

Shares of Snap dropped 25 per cent in trading after the bell.

The Santa Monica, California-based company said that issue was compounded by global supply chain disruptions and labor shortages, which caused companies to pull back on their advertising spending.

Many of the advertisers who place ads on Snapchat are in the beauty, fashion and consumer goods industries.

Revenue for the third quarter ended Sep 30 was US $1.07 billion, missing consensus estimates of US $1.1 billion, according to IBES data from Refinitiv.

The results for Snap, which is the first of the major social media companies to report earnings, could cast a shadow over Facebook and Twitter, which release third quarter results next week.

Snap said it expects the Apple privacy changes and global supply chain disruptions to linger through the fourth quarter.

Daily active users, a metric watched closely by advertisers and investors, rose 23 per cent year-over-year to 306 million, beating analyst estimates of 301.9 million.

Snapchat has worked to attract and retain users by building new features like the ability to discover restaurants and stores through a map feature, or play virtual games with friends.

The net loss during the quarter was US $72 million, or 5 cents per share, narrowing from US $199.9 million, or 14 cents per share, in the year-ago quarter.

Snap forecast fourth quarter revenue between US $1.16 billion to US $1.2 billion, and daily active users between 316 million to 318 million.