Snap’s quarterly revenue exceeded $1 billion for the first time in history. However, this amount was still below forecasts. The company itself attributes this to changes in Apple’s policy and the loss of advertising revenue after the release of iOS 14.5.Snap told about this in the remarks to the financial report for the third quarter of 2021 (ended September 30).
The report itself will be published this week, but the company has previously announced some data.
In total, Snap earned $1.067 billion in the third quarter, which is 57% more in annual terms. At the same time, the company missed $3 million relative to expectations. This may be due to changes in the mobile advertising market.
“We are faced with industry changes in the field of targeted advertising on iOS, which have had a much more significant impact on our business than we expected,” said Jeremy Gorman, Snap’s business director.
The company-owner of Snapchat warned investors that in the coming months, revenue may also be below forecasts. Snap CEO Evan Spiegel called the consequences of the release of iOS 14.5 “devastating”.
“Although we expected a certain deterioration in the functioning of our business, the solution provided by Apple could not compensate for the losses, as we expected. Because of this, it was more difficult for our advertising partners to evaluate and manage their campaigns for iOS,” said Spiegel.
Recall that in April, Apple allowed iOS users to prohibit apps from tracking their data. As an alternative to IDFA, the company offered SKAdNetwork. However, this framework has not yet been able to become a full-fledged replacement and has not met the expectations of many developers.
Snap is far from the only company that has felt the consequences of Apple’s new policy. Facebook and Twitter are due to submit their financial reports this week. Analysts expect that the changes regarding IDFA will also have a negative impact on their revenue, as both companies rely heavily on advertising.
The industry has already felt the consequences of Apple’s new policy. According to Consumer Acquisition, the revenue of iOS developers decreased by 15-20% after the release of iOS 14.5. At the same time, GameAnalytics reported in September that almost half of iOS users around the world still allow mobile games to track data. Although before that, other analytical companies talked about a much smaller share.