Snap Inc., the American company that owns the popular social media platform Snapchat, has reportedly stated during its earnings call that it failed to achieve its revenue forecasts for the third quarter (Q3) of 2021. Snap reported $1.07 billion in revenues for the third quarter, falling short of Wall Street's expectation of $1.1 billion.
The firm reported 306 million daily active members, a bit higher than 293 million the company recorded in the second quarter (Q2). This growth is not spectacular, but it appears to be enough for a platform that was on the verge of being obsolete not long ago.
Snapchat blamed the revenue shortfall on Apple's major iOS privacy update, which imposed new limits on apps trying to track user behavior outside of their own boundaries. During the call, Snap CEO Evan Spiegel stated that the firm was taken aback by how destructive of an impact the changes had on advertiser.
Without the broad perspective that many advertisers had become accustomed to, they were forced to adapt to new, more limited method of evaluating user activity. Spiegel stated that those instruments were effectively made blind.
Spiegel portrayed Snap's business disruption as temporary, adding that transitioning to the new normal simply takes time and that the long-term effect of Apple's ad adjustments remained to be seen. He also saw that Snap's underperformance was influenced by larger global market dynamics.
Snap is not the only ad company adapting to iOS improvements, which are a major benefit for consumer privacy. Facebook also cautioned that it anticipates a substantial effect in the third quarter as a result of Apple's new regulations, which have limited the company's target advertising ability.
When given the option, most consumers choose to opt-out of the cross-platform monitoring that ad companies like Facebook and Snap rely on. Unlike Facebook's top administration, Spiegel has repeatedly supported Apple's choice to include more privacy into its mobile OS, regardless of how such improvements may damage Snap's bottom line.