Snap, the reported parent company of a slowly disappearing messaging app known as Snapchat has warned the public that Apple's upcoming privacy update might make things harder for them to turn in ad profit. This statement was given despite the reported fourth-quarter results that even beat the analyst expectations.
Snapchat on Apple privacy update
According to an article by CNet, the company stated that some advertisers had even paused their campaigns within the first two weeks of January even after the said deadly riot over at the known US Capitol back in January 6. Derek Andersen, CFO noted that the upcoming changes to Apple's brand new iOS 14 will also present yet another risk of interruption towards the demand. He had also noted that the underlying long-term impact is still unclear.
Apple notably plans to release a brand new privacy feature within the first quarter that will then require users to opt for certain apps collecting their own data coming from other companies' websites and apps. Apple noted that it is going to make changes to its popular mobile operating system which would reportedly give users even more control over their own data privacy.
Facebook says "profit not privacy"
Social networks like Facebook have also expressed their own concerns that the changes will actually affect the ability of their advertisers to be able to reach customers with their target ads. Facebook noted that Apple's changes are focused on "profit not privacy" because if the apps turned more in even more in-app purchases, then the smartphone maker would then be able to get more money coming from fees.
Snap, on the other hand, has expressed their support regarding Apple's expected upcoming changes. Evan Spiegel, Snap CEO, noted in a call with analysts that when it comes to some of the upcoming policy changes that Apple is making, people should really think of them as a particularly high integrity folk and they are also happy to see them trying to make the right decision for their own customers, the story was also reported by CNBC.
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Snap profit estimate
Snap also estimates the revenue coming from their first quarter will be well between $720 million and $740 million which is higher than what was earlier expected of $704.57 million. However, the company still estimates that they will lose about $50 to $70 million in their adjusted EBITDA or earnings before interest, taxes, and amortization. This is reportedly worse than the previous $19.26 million profit analysts had expected.
Concern regarding the forecast had pushed Snap's own shares lower during after-hour trading. At a certain point, the share had reportedly fallen over 10% to just $52.20/share. Worries regarding the future performance overshadowing Snap's own strong fourth-quarter results. During the October-December quarter, snap had raked in a whopping $911 million in revenue which is better compared to the $857.39 million that analysts surveyed by Thomas Reuters expected.
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This article is owned by Tech Times
Written by Urian Buenconsejo
