Snap, which owns the popular communication application Snapchat, has warned that privacy changes that Apple will make may cause damage to Snap’s advertising business, despite its growth in user numbers and revenue exceeding expectations in the fourth quarter.
Snap shares fell 7% to $54.02 at the open.
The company believes that the changes Apple is planning will pose a risk to the volume of advertisers’ requests, as the changes include asking iPhone users to agree to have their data tracked to display ads tailored to them, but Snap added that it is not entirely clear how this will affect its business in the long term.
It is worth noting that Facebook, which is Snap’s biggest technical competitor, is trying to incite a rejection among users against Apple’s changes, accusing it of making decisions that violate the principles of fair competition and cause damage to the business of the social media giant Facebook in targeted advertising.
But on the other hand, Snap’s tone was different when the company’s business director, Jeremi Gorman, stated that Snap shares the idea with Apple of protecting users’ privacy, and is ready to explain the changes in the iOS operating system to advertisers.
Snap’s Daily Active Users (DAU) number increased 22% year-on-year to 265 million in the fourth quarter ending December 31, knowing that analysts’ expectations were only 258 million, and these numbers are an indicator that is being followed by investors and advertisers in the company.
Advertisers are attracted to Snap’s younger audience, but Snap had the most user growth outside of North America and Europe with DAU growth of 55%, and the company achieving 62% revenue growth to $911 million, aasily beating Wall Street expectations, which expected revenue of only $857.4 million, knowing that the company’s advertising sales make up the bulk of this revenue.
Snap recorded a net loss of nearly $113 million, or 8 cents per share, compared to a loss of $240.7 million a year ago, or 17 cents per share. The company expects DAU numbers to grow in the first quarter by 20% year-on-year to 275 million users, and it will generate $740-740 million in revenue.