Compared with the scenery of the second quarter, the third quarter of the technology giants is mixed.
Although there is no lack of super achievements, Apple's privacy and advertising policies for IOS have caused many software to be seriously injured. From Snap to Twitter and Facebook, from stock prices to earnings reports, the impact is already clear. As the enthusiasm of capital gradually fades, the technology giants have once again reached a crossroads.
<h1 class="pgc-h-arrow-right" data-track="5" > headwind warning</h1>
U.S. stocks entered an intensive three-quarterly reporting release period. After the stock market closed on October 26, local time, Twitter announced its financial results for the third quarter of 2021 as of September 30. According to the financial report, Twitter's revenue in the third quarter was $1.284 billion, up 37% year-on-year.
Despite revenue growth, Twitter turned profitable to lossy in the quarter. Net loss was $537 million, compared to a profit of $29 million in the year-ago quarter, and a loss of $0.67 per share, compared to a gain of $0.04 per share last year.
However, for the impact of Apple's privacy policy that the market is concerned about, Twitter said that in the third quarter, the impact of Apple's iOS privacy rules changes was smaller than expected.
But other companies weren't so lucky. By contrast, snaps and Facebook both say Apple's new iOS 14 privacy features are the main reason the business has been hit hard in the recent quarter.
Judging from Facebook's report card in the third quarter, many indicators fell short of market expectations. Affected by Apple's new privacy policy, its advertising business was affected by the impact of total revenue, with $29 billion in total revenue lower than the market expectation of $29.5 billion; $10.4 billion in operating profit under the GAAP, lower than Wall Street's expectation of $11.1 billion.
Facebook Chief Financial Officer Dave Wehner said the iOS change was the "biggest headwind" in the third quarter and we could have achieved sequential growth from the second to third quarters.
In fact, Facebook and Apple have argued many times over privacy standards and targeted advertising over the past year. Last year Apple introduced the iOS 14.5 update, which allows Apple users to opt out of data tracking for all apps.
At the time, the change shocked Facebook and other companies that relied on user information-driven advertising.
Facebook claims that eliminating personalized ads can reduce the average sales of small businesses per ad by as much as 60 percent. It also said the iOS update could reduce its Audience Network revenue by up to 50 percent.
Another "burn after reading" social software has also been affected. Snapchat parent Snap released its third-quarter earnings after hours last Thursday, showing Snap's third-quarter adjusted earnings per share of $0.17 and market expectations of $0.08; revenue of $1.07 billion, compared to market expectations of $1.10 billion.
Snap shares plunged 25 percent after hours after earnings, and CEO Evan Spiegel said the iPhone's privacy settings had more impact on Snap's advertising business than expected.
<h1 class="pgc-h-arrow-right" data-track="79" > the most beautiful giant</h1>
Some shivered, others fearless. For example, Google, which owns Youtube, is not afraid of Apple's privacy policy adjustments, and advertising revenue is still expanding.
Google's parent company Alphabet released its third-quarter financial report after hours on the 26th, showing that the company's third-quarter revenue reached $65.118 billion, an increase of 41% over the same period last year, a new 14-year high; net profit was $18.936 billion, an increase of 68% from $11.247 billion in the same period last year.
On a conference call after the earnings report, an analyst asked about the impact of Apple's new privacy policy on Google. In this regard, Google CFO Ruth Porat said that the iOS New Deal has little impact on Youtube revenue, which is mainly reflected in advertising.
Specifically, Alphabet's advertising business, which is composed of search, maps and YouTube, reached revenue of $53.13 billion in the third quarter, up 43% from the same period last year.
Google's other businesses, other than advertising, are still slow. Among them, Google Cloud, a sector that Google is currently betting on, increased by 45% in the quarter, with revenue of nearly $4.99 billion, compared with an expected $5.17 billion.
Still, Google Cloud's loss fell nearly half this quarter to $644 million.
In addition to Google, Microsoft's answer sheet is also very conspicuous. After the US stock market on October 26, local time, Microsoft announced the third quarter of the end of September, that is, the company's financial report for the first quarter of fiscal 2022.
According to the data, Microsoft's revenue in the third quarter reached $45.3 billion, an increase of 22% year-on-year, significantly exceeding the market expectation average of $43.9 billion. In addition, revenue grew at an accelerated pace, gross margin improved more than expected, and the operating leverage effect was obvious, resulting in a company operating profit of $20.2 billion, far exceeding market expectations of $18.6 billion.
Xiang Ligang, a communications expert, analyzed that on the whole, compared with most of the Internet giants in the United States, after benefiting from the epidemic, the business trend returned to the bank; Microsoft, on the contrary, after coming out of the epidemic, began to accelerate the purchase of cloud business, which was less affected by external changes, driving Microsoft's strong performance.
On the day, Microsoft shares rose $1.98 in regular trading to close at $310.11, or 0.64 percent. In subsequent after-hours trading, Microsoft shares rose more than 1%.
Microsoft's guidance for the next quarter is also above market expectations. The company expects revenue to grow 16.5% to 18.5% in the second quarter, ranging from $50.2 billion to $51.1 billion, significantly exceeding market expectations of $48.8 billion.
<h1 class="pgc-h-arrow-right" data-track="85" > the beginning of the pain? </h1>
No near-term concerns don't mean no far-sightedness, and regulators and lawmakers are probably the biggest problem with Google's continued success right now. Lawyers in Texas and more than a dozen states have previously filed lawsuits against Google. In this lawsuit, the plaintiffs highlighted how Google reduced ad spending by 22%-42% through its system, which is 2-4 times that of competing advertising exchanges.
Google also faces antitrust lawsuits from the Justice Department and an independent state coalition accusing the company of reaching secret deals that favor its search engine and promotion companies and thwart rivals. In July, a third state coalition led by the state of Utah filed a lawsuit against Google's Play App Store.
In response to some regulatory criticism, Google has made adjustments to its business. Previously, the company cut app subscription fees from 30 percent to 15 percent, and analysts expect the adjustment to affect Google's revenue over the next 12 months.
For Facebook, the impact of Apple's privacy policy is bound to continue. Evercore ISI analyst Mark Mahaney said in a research note released on Friday that the changes would be very disruptive in some cases for online advertising platforms and a large number of internet advertisers.
In the face of reality, CEO Zuckerberg's determination to lead Facebook's transformation seems to be more firm and strong, and he has set his sights on the hot "meta-universe". Facebook announced that starting in the next quarter, Facebook plans to use Facebook Reality Labs as a separate reporting department to show Facebook's expansion in the field of virtual reality and metaversics.
For the plan and layout of the meta-universe, the Beijing Business Daily reporter contacted Facebook, but as of press time has not received a reply. Xiang Ligang believes that although this is a signal of transformation, the investment period will inevitably lead to an increase in costs and expenses.
Snap became Facebook's biggest competitor in the race for younger users after investment bank Piper Sandler released a survey of 10,000 U.S. teens. The results show that Snap remains the favorite social media app for U.S. teens, used by 35 percent of respondents, up from 31 percent in the year-ago quarter.
According to data released by Snap, Snapchat's core users are in the 18-24 age group, accounting for 36% of the total users, and users under the age of 35 account for 85% of the total users.
Facebook also said on the earnings call that our products are widely used by teens in terms of user engagement trends, but are currently facing stiff competition from companies like TikTok, especially Snapchat.
(Beijing Business Daily reporter Tao Feng, Zhao Tianshu)