Snap reported a loss of 359.5 million in its third quarter on Thursday, according to its latest financial report. Given this, the company’s shares plummeted 25%.
Although revenue this quarter grew 6% from a year earlier, Snapchat’s net loss rose 400%, in part, due to a $155 million restructuring charge.
This is because in August, Snap announced that it would lay off 20% of the approximately 6,000 employees as part of a restructuring plan. Severance payments and related costs made up a large part of the restructuring charge in the period.
“Our revenue growth continued to slow in the third quarter and continues to be affected by a number of factors that we have seen over the past year, including platform policy changes, macroeconomic headwinds and increased competition.
We are finding that our advertising partners in many industries are reducing their marketing budgets, especially in the face of operating environment headwinds, inflation-driven cost pressures, and rising capital costs.
Given this, Snap added that revenue growth is likely to continue to slow in the fourth quarter, as that period “has historically been relatively more reliant on brand-facing ad revenue,” which declined in the latest period.
Snap said during the quarter that as part of its plan to cut costs, it would shut down several big-ticket projects, including its Pixy drone, which it planned to sell for $230. Snap has also ended production of its Snap Originals premium programs.
Apple’s privacy policy affected Snapchat
The 2021 privacy update for iOS posed a barrier to Snap’s ability to track users across the web, undermining its online advertising business.
Even though daily active users were up 19% year over year – showing the company can still attract people to its platform – average revenue per user was down 11% to $3.11.
But Snap isn’t the only one affected; Rival social media companies, notably Facebook, have been similarly hurt by Apple’s changes. Facebook main goal
