Snap stated that it had not met its revenue expectations for the third quarter in an earnings call on Thursday. Snap reported Q3 revenue of $1.07 billion, which is below Wall Street's expectations that it would bring in $1.1 million.
It now has 306 million active users per day, an increase of the 293 million reported in Q2. This growth is not huge, but it's still impressive for a platform that was at risk of losing its relevance in recent years.
Snapchat blamed the revenue loss to Apple's major iOS privacy change. This placed new restrictions on apps that seek to track user behavior outside their borders. Snap CEO Evan Spiegel stated that the company was surprised by the disruptive impact of advertiser tools. They had to adjust to new and more restricted ways to measure user behavior without the broad view many advertisers were used to. Spiegel stated that these tools were effectively rendered blind.
Spiegel described the Snaps business's decline as temporary and noted that it takes time to adjust to the new normal. The long-term effects of Apples ad changes will remain to be seen. He also noted the role of wider pandemic market trends on Snaps poor performance.
Snap is not the only ad company adapting to the iOS changes. These are huge benefits for privacy. Facebook warned that it expected to see significant changes in Q3 because of Apple's new policies. This has impacted the company's ability to target ads.
It is not surprising that most people choose to opt out of cross platform tracking that ad companies like Snap or Facebook rely upon when given the option. Spiegel, unlike Facebook's leadership has supported Apples decision to increase privacy in its mobile operating system, despite the potential impact on Snaps bottom line.