Snap, Snapchat video chat developer, published a report for the third quarter. Here are the main results compared to last year:
- revenue increased by 57%, up to 1067 million dollars;
- operating loss increased from 167 to 181 million;
- net loss decreased from 200 to 72 million.
Snapchat is a messaging service and video. We analyzed the company's business in detail in a separate review.
In the third quarter, the number of daily active Snapchat users grew by 23%, up to 306 million people. This is more than 302 million, which analysts have been waiting for. But sales were about 30 million less than expected. Revenue per user too - 3,49 against 3,67 $. And all because of the new policy of Apple, consider in the company. After the report, Snap shares fell by 20%, to 60 $.
In April, Apple released a new version of the iOS operating system. 14.5. Users were allowed to hide the advertising ID of the device from third-party applications. So internet services like Facebook and Google it has become more difficult to track user preferences. This reduced the relevance of the ad., and with it the advertising revenues of companies.
Even in winter, before the release of the update, Snap CEO Evan Spiegel spoke positively about Apple's initiative: "We feel, that are well prepared for change. Honestly, these changes are in line with our privacy philosophy. It's good for consumers, even if it will hinder advertisers a bit in the future.”.
Now the company says, that new privacy settings affected ad revenue more, than expected. Snap sees fourth-quarter revenue of $1.16-1.2 billion. Analysts expected 1.36 billion, according to consensus.
Snap executives noted, that supply disruptions and labor shortages have also reduced the willingness of partners to increase advertising spending.
Against the backdrop of such results, promotions of other services, who make money from advertising, also fell hard: Facebook и Twitter — на 5%, Pinterest — на 4%, Alphabet — на 2%.
Over the past year, excluding the recent fall, Snap shares are up by 170%. Despite a capitalization of $118 billion, Snap is still losing money. Typically, stocks of such companies are volatile and react to any slowdown in revenue growth.. And Apple's privacy policy could hurt Snap more, than on the rest: unlike Facebook and Twitter, the company has never reported profits to shareholders.
