Snap Q3: $1.07B revenue, up 57% YoY, vs. $1.10B est., DAUs up 23% to 306M, net loss down 64% to $72M, blames iOS ATT changes for revenue miss; stock down 20%+
oh vey “We expect that the measurement and optimization foundations of the digital advertising economy will continue to experience significant changes in the months ahead, including additional disruptions we expect related to the adoption of iOS 15.” Eric Seufert / @eric_seufert : @RichLightShed Yup. Apple detonated a nuke at the heart of the mobile advertising ecosystem with ATT and is sending in robots to salt the Earth with iOS 15 https://mobiledevmemo.com/... Fred Hickey / @htsfhickey : Social media co.Snapchat guides current qtr. sharply lower as changes to Apple's privacy rules are negatively impacting their ad revenues. Snap plunges 25% in After hrs trading. Impacts lots of others with similar advertising-dependent revenue models. https://www.wsj.com/... Eric Seufert / @eric_seufert : For anyone wondering how Apple's ATT privacy policy could have created such a dramatic burden on Snap's business: I wrote this primer on how the IDFA is / was used for ad targeting by digital ad platforms like FB and Snap back in January https://mobiledevmemo.com/... Patrick McGee / @patrickmcgee_ : Snap chief of business Jeremi Gorman dismissed Apple's tool (SKAdNetwork), calling it “unreliable as a standalone measurement solution.” He said measurements “diverge meaningfully from the results we observed on (other measurement solutions).” https://twitter.com/... Patrick McGee / @patrickmcgee_ : As a result, some advertisers are throwing more money at “safe havens” where granular details are still available — namely on Android and Apple Search Ads. Hence this scoop: https://www.ft.com/... Florian Mueller / @fosspatents : On the last day of evidence and testimony of the #EpicvApple trial he defended Apple's App Store monopoly abuse in a media report. Sounds a bit different now. https://twitter.com/... @jason : If @Apple is serious about privacy they should buy @DuckDuckGo or make them the default search engine and tell @google to keep their $15b pay off. Dare Obasanjo / @carnage4life : @mdhardeman The tie is as app developers make less money from ads, they'll try to make the revenue up via subscriptions and Apple takes a 30% cut of IAP revenue from subscriptions. For example, Twitter sold their 3rd party ads business and is focusing on subscriptions https://blog.twitter.com/... Eric Seufert / @eric_seufert : Yup. Now think about every other CEO that was equally confident / dismissive regarding ATT over the last few quarters. The ATT bomb was placed in April but it only detonated in Q3. https://twitter.com/... Gene Munster / @munster_gene : This will take six months to a year for the industry to get their hands around the changes to Apple. On top of Apple, advertisers are cutting spending because of the lack of supply and labor shortage. This means auction based ad pricing is declining. Gene Munster / @munster_gene : Bottom Line: Snap will get through this because all that matters is engagement. DAUs are expected to grow at 20% in December, compared to 23% in September. Eventually the industry ad tools will navigate Apple changes and Snap will monetize its fast growing base. Gene Munster / @munster_gene : Where to start with Snap? The macro: Apple (IDFA) has sent a shockwave through the app based advertising business. This is the reason why companies like Snap and Facebook don't like Apple. Gene Munster / @munster_gene : Effectiveness of advertising measurement tools that have been used for a decade have been dramatically diminished first starting in the summer with Apple's opt-out of tracking and second with the September release of iOS 15. Marcelo P. Lima / @marceloplima : @eric_seufert Not very intuitive given how much Spiegel was praising Apple's ATT move as being in line with Snap's privacy focus Eric Seufert / @eric_seufert : @MarceloPLima I found that strange at the time. Perhaps he didnt fully grasp the consequences of ATT! Eric Seufert / @eric_seufert : $SNAP down 25% on ATT frictions. Who could have guessed. https://twitter.com/... Mike Shields / @digitalshields : We spent so much time agonizing over the cookie what Google was doing to everyone when Apple just knocked the whole digital ad industry on its ass Mike Shields / @digitalshields : @mjbarash You are saying the average industry observer, or even marketer, fully grasped this? Most know what cookies are- they aren't walking around like, “you know what's vital? MAIDs. Gosh this ATT thing watch out” Meg Graham / @megancgraham : $SNAP CBO Jeremi Gorman says in prepared remarks that initially results using Apple's SKAdNetwork were in line with other industry solutions, but over time found it to be “unreliable as a standalone measurement solution.” David Barnard / @drbarnard : SKAdNetwork is terrible, that's now obvious. But was it malice or incompetence? That's an important question for the future of so many companies. https://twitter.com/... Dare Obasanjo / @carnage4life : Snapchat stock down 25% after Apple's privacy changes caused a revenue miss for their ads business. As I've stated in the past Apple unilaterally chose to decimate the mobile ads economy to grow their ads & subscriptions revenue under the guise of privacy https://www.cnbc.com/... Tero Kuittinen / @teroterotero : Good Lord, Apple really is gutting Snapchat. Down -21% after hours due to Apple's kneecapping. @scobleizer : Bad afternoon for SNAP. Apple's power is stunning and will affect many companies soon. Is that good? Of course not but we won't act because we are about to get better football in return. And better metaverse kinda stuff. https://twitter.com/... Kyle / @sonofuhgunn : “Oh, did somebody get addicted to spying on their users?” https://twitter.com/... https://twitter.com/...
CNBCSalvador Rodriguez
Context & Ripple Effects
Snap had previously reported 238M global daily users and $454M in Q2 revenue in 2020, establishing a rapid-growth baseline before Apple’s privacy changes disrupted the ad-measurement tools on which Snap’s business depends.
The current report separates audience momentum from monetization: daily users grew strongly, but the company’s revenue outlook was cut as ATT and iOS 15 made campaign measurement and optimization less reliable. Later coverage records a sharp slowdown in Snap’s revenue growth, reinforcing why this miss mattered beyond one quarter.
First-order effects
Snap faces a lower near-term ad-revenue outlook despite user growth, while its shares fell sharply after the miss and reduced guidance.
Advertisers using Snap lose granular iOS measurement, and Snap says Apple’s SKAdNetwork is not reliable enough as a standalone replacement.
Second-order effects
Advertisers are shifting incremental spending toward Android and Apple Search Ads as iOS attribution weakens, putting pressure on Snap to retain budgets with less precise performance evidence.
Apple’s privacy changes shift more of the ad ecosystem’s measurement dependency toward Apple-controlled tools, reducing Snap’s control over how it demonstrates campaign outcomes.
Third-order effects
If the pattern persists, mobile ad platforms will be judged less by audience growth alone and more by their ability to monetize when platform-level privacy rules limit attribution.
ATT makes operating-system owners more consequential gatekeepers in digital advertising, with platform policy changes capable of resetting ad-market measurement practices.
The trend: Mobile advertising is moving from app-level tracking toward platform-governed measurement, reshaping where advertisers can verify performance and allocate spend.
1/ So @Facebook and @Snap are complaining that their business is suffering due to @Apple's new notification asking users if they want to be tracked all over the web to aid in targeted advertising. Apparently, when asked, lots of people are saying no. https://twitter.com/...
*Breaking* @Snap blames @Apple privacy changes for Q3 earnings miss and says Q4 revenues will come in between $1.16bn and $1.2bn, versus consensus estimate of $1.4bn. *a Thread*
ATT means iOS apps are the framework for the future of privacy. I will make that trade as will everyone else because they will give their customers control over it. So simple really. Sent from my iPhone.
I agree with you overall message here, but what we have also seen is that these privacy changes have massively helped Apple's own advertising/tracking efforts. https://www.ft.com/... Apple has dramatically skewed their market in their favor and their own tracking systems. https:/…
‘A range of small online businesses rely heavily on Facebook and Instagram ads to reach new customers. Many of those companies are struggling to cope with the Apple change and some say they are pulling back ad spending.’ https://www.wsj.com/...
Apple's privacy changes are like the needle being ripped off the record at the direct-to-consumer e-commerce party. @patiencehaggin and @VranicaWSJ tally the damage. (Customer acquisition costs up 10x!) https://www.wsj.com/... via @WSJ
In theory, this warning from Snap isn't a great sign for any company that sells ads, including giants like Google, Facebook, and Amazon. https://twitter.com/...
Facebook and Snapchat having trouble since Apple made it difficult for them to surveille you without a legal warrant. Well. GOOD. https://www.wsj.com/...
yes, shockingly, some companies are going to lose money as we move away from “we do not care about consumer privacy on any level whatsoever” to “we inconsistently care about consumer privacy a little bit.” https://www.wsj.com/...
@eric_seufert I was very surprised by Evan's confidence in SNAP's previous earning calls. Even today he was talking about problems with Ad attribution but nothing about the loss of targeting signals.
$SNAP CEO Evan Spiegel on iOS 14.5 impact: “While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure & manage their ad campaigns for iOS”
Facebook, Twitter, Pinterest shares also dive in post-market trading after Snap misses revenue expectations due to Apple iOS privacy changes https://www.cnbc.com/... https://twitter.com/...
Snap says supply chain issues are hurting advertising. Businesses don't wanna pay to promote products they can't create/fulfill. Holiday quarter looking grim for ad companies. That news sent $SNAP stock down ~23% FB, Twitter + Google stock also dipped https://www.bloomberg.com/..…
So now the supply chain crisis is hurting digital media stocks. What's the point of advertising stuff if you can't get your goods off the boat? https://www.bloomberg.com/...
@GavinSBaker @alexdbauer Wild that we went from Microsoft being sued for shipping a browser in the OS as anti-competitive to Apple deciding to redefine privacy on their OS in a way that caused the ad revenue to flow from social apps to App Store ads and got praised for it. How th…
Facebook -22pts (6.4%) after hours. Google -76 pts (-3%). The potential hit from Apple's rule change has been known for a long time - but investors ignored it (as well as many other real risks) as they continued to pile into FAANG in a greed-driven frenzy in this mkt. bubble.
$SNAP #iOS15 changes — oh vey “We expect that the measurement and optimization foundations of the digital advertising economy will continue to experience significant changes in the months ahead, including additional disruptions we expect related to the adoption of iOS 15.”
@RichLightShed Yup. Apple detonated a nuke at the heart of the mobile advertising ecosystem with ATT and is sending in robots to salt the Earth with iOS 15 https://mobiledevmemo.com/...
Social media co. Snapchat guides current qtr. sharply lower as changes to Apple's privacy rules are negatively impacting their ad revenues. Snap plunges 25% in After hrs trading. Impacts lots of others with similar advertising-dependent revenue models. https://www.wsj.com/...
For anyone wondering how Apple's ATT privacy policy could have created such a dramatic burden on Snap's business: I wrote this primer on how the IDFA is / was used for ad targeting by digital ad platforms like FB and Snap back in January https://mobiledevmemo.com/...
Snapchat stock down 25% after Apple's privacy changes caused a revenue miss for their ads business. As I've stated in the past Apple unilaterally chose to decimate the mobile ads economy to grow their ads & subscriptions revenue under the guise of privacy https://www.cnbc.com/...
Snap chief of business Jeremi Gorman dismissed Apple's tool (SKAdNetwork), calling it “unreliable as a standalone measurement solution.” He said measurements “diverge meaningfully from the results we observed on (other measurement solutions).” https://twitter.com/...
As a result, some advertisers are throwing more money at “safe havens” where granular details are still available — namely on Android and Apple Search Ads. Hence this scoop: https://www.ft.com/...
On the last day of evidence and testimony of the #EpicvApple trial he defended Apple's App Store monopoly abuse in a media report. Sounds a bit different now. https://twitter.com/...
@mdhardeman The tie is as app developers make less money from ads, they'll try to make the revenue up via subscriptions and Apple takes a 30% cut of IAP revenue from subscriptions. For example, Twitter sold their 3rd party ads business and is focusing on subscriptions https://blo…
Yup. Now think about every other CEO that was equally confident / dismissive regarding ATT over the last few quarters. The ATT bomb was placed in April but it only detonated in Q3. https://twitter.com/...
This will take six months to a year for the industry to get their hands around the changes to Apple. On top of Apple, advertisers are cutting spending because of the lack of supply and labor shortage. This means auction based ad pricing is declining.
Bottom Line: Snap will get through this because all that matters is engagement. DAUs are expected to grow at 20% in December, compared to 23% in September. Eventually the industry ad tools will navigate Apple changes and Snap will monetize its fast growing base.
Where to start with Snap? The macro: Apple (IDFA) has sent a shockwave through the app based advertising business. This is the reason why companies like Snap and Facebook don't like Apple.
Effectiveness of advertising measurement tools that have been used for a decade have been dramatically diminished first starting in the summer with Apple's opt-out of tracking and second with the September release of iOS 15.
@mjbarash You are saying the average industry observer, or even marketer, fully grasped this? Most know what cookies are- they aren't walking around like, “you know what's vital? MAIDs. Gosh this ATT thing watch out”
$SNAP CBO Jeremi Gorman says in prepared remarks that initially results using Apple's SKAdNetwork were in line with other industry solutions, but over time found it to be “unreliable as a standalone measurement solution.”
SKAdNetwork is terrible, that's now obvious. But was it malice or incompetence? That's an important question for the future of so many companies. https://twitter.com/...
Bad afternoon for SNAP. Apple's power is stunning and will affect many companies soon. Is that good? Of course not but we won't act because we are about to get better football in return. And better metaverse kinda stuff. https://twitter.com/...
lol adpocalypse gooooooooo forever also from what I've been hearing from marketing peeps, a lot of the real Facebook turmoil has little to do with their absolutely dogshit public image & scandal and more that their ad revenue is total dogshit this upcoming quarter https://twitter…
I would argue the analysts are also at fault - their lack of attention to the Apple changes has been embarrassing as they played along with Facebook's talking points. Snap is being super transparent and taking the hit here. Respect to them, they'll come out stronger.
That online ads businesses and advertisers would suffer massively from ATT was obvious a year ago. That the media only knew how to frame it a particular way is why I only get my analysis from newsletters these days: @benedictevans, @packyM & @benthompson. https://twitter.com/...
how do you like them apples? It certainly appears Snapchat followed Facebook's new privacy improvements. There will be more blood with Facebook unless they are abusing the market. The FB+G collusion allegation being unsealed tomorrow morning makes me think they won't... https://t…
$SNAP on Apple's SKAdNetwork #SKAN “However, over time, we saw SKAN measurement results diverge meaningfully from the results we observed on other first and third-party measurement solutions, making SKAN unreliable as a standalone measurement solution.”
Gorman con'td: “Every advertiser has their own unique, fine-tuned perspective on the optimal parameters to measure ROI for their business, but SKAN requires them to use Apple's fixed definitions of advertiser success.” $SNAP
$SNAP reported a 3Q revenue miss ($1.07bln vs $1.10bln expected) but a beat on EPS ($0.17 vs $0.08). Slightly up after hours, but not the kind of showing that usually inspires big investment funds in
Snap, like Facebook, says Apple ad changes hurt their biz: “While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult... to measure and manage their ad campaigns for iOS.”
$SNAP also calls out supply chain issues with brands/advertisers in Q3 “This impact was compounded by the ongoing macroeconomic effects of the global pandemic, with our advertising partners facing a variety of supply chain interruptions and labor shortages.”
$SNAP calls out ios14 #ATT for part of their revenue miss @evanspiegel remarks: “we missed the lower end of our guidance by $3 mm due to a few key factors, including changes to advertising tracking on iOS and macroeconomic factors that have impacted our advertising partners”
How ads were working, and on which audiences, used to be real time and granular, but on iOS it is now delayed up to 72 hours and only available in the aggregate. This has transformed much of the tailored ads industry into something more like a traditional billboard.