(Reuters) – Snap Inc, owner of the popular photo messaging app Snapchat, warned on Thursday that Apple Inc’s upcoming privacy changes could hurt Snap’s advertising business, although user growth and revenue outweigh analysts’ estimates for the fourth quarter.
Instant stocks fell 7% to $ 54.02 after the bell.
The changes planned by Apple, to ask for consent from iPhone users to track their data for personalized ads, could pose a “risk” to advertiser demand, Snap said, but added that it was unclear how it could affect business in the long run. deadline.
“The disruption of ad targeting caused by iOS 14 privacy changes will clearly be a concern for Snap, which has steadily increased its arsenal of ad formats and advertisers,” said Tom Johnson, director of transformation for advertising agency Mindshare Worldwide .
Snap’s biggest technology rival, Facebook Inc, has been waging a public struggle against Apple’s changes, accusing the iPhone maker of anti-competitive behavior and damaging the social media company’s ad targeting business.
During a profit call with analysts, Snap CEO Jeremi Gorman took a different tone, saying that Snap shares Apple’s philosophy of protecting users’ privacy.
“We admire Apple and believe they are trying to do the right thing for customers,” said Gorman, adding that Snap is well-prepared to guide advertisers through iOS changes.
Snap’s daily active users (DAUs), a metric observed by investors and advertisers, increased 22% year-over-year to 265 million in the fourth quarter ended December 31. Analysts had expected 258 million, according to IBES data from Refinitiv.
The app made the biggest gains outside North America and Europe, with a 55% increase in daily active users.
Revenue, which Snap generates primarily from ad sales, grew 62% to $ 911 million, easily exceeding the Wall Street consensus estimate of $ 857.4 million.
Advertisers were attracted to Snap’s young audience, and he has developed features that appeal to marketers, including Snap Map, which allows users to find local businesses near them.
Snap’s net loss decreased to $ 113 million, or 8 cents per share, from $ 240.7 million, or 17 cents per share, a year earlier.
The company predicted that daily active users in the first quarter would grow 20% year over year, to 275 million, and revenue from $ 720 million to $ 740 million.
Reporting by Sheila Dang; Editing by Cynthia Osterman and Richard Chang