Facebook warns investors of iOS 14.5 headwinds

Facebook says its advertising revenue will grow all year, however.

What you need to know

  • Facebook has warned it expects to face headwinds in advertising this year because of iOS 14.5.
  • Despite this, it is predicting a full year of revenue growth.
  • Apple release iOS 14.5 and the option to opt-out of tracking this week.

Facebook has told investors it expects to face headwinds in advertising revenue thanks to changes made in iOS 14.

In its Q1 21 financial highlights the company reported a “strong quarter” and revenue of over $25 billion, up 46% on the same period last year.

Facebook also says that it had nearly 1.9bn daily active users in March, and more than 2.8bn monthly active users. Looking ahead, Facebook warned that iOS 14.5 and a new opt-in prompt for user tracking was one of the “headwinds” it was expecting to run into this year:

We expect second quarter 2021 year-over-year total revenue growth to remain stable or modestly accelerate relative to the growth rate in the first quarter of 2021 as we lap slower growth related to the pandemic during the second quarter of 2020. In the third and fourth quarters of 2021, we expect year-over-year total revenue growth rates to significantly decelerate sequentially as we lap periods of increasingly strong growth. We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recently-launched iOS 14.5 update, which we expect to begin having an impact in the second quarter. This is factored into our outlook.

As Facebook notes, it has factored iOS 14.5 into its outlook yet still expects to see growth throughout the rest of the year.

Apple released iOS 14.5 this week, with users now being prompted by all of their apps to ask whether they would like to be tracked. A stunning report yesterday based on a survey of iMore readers has revealed that only 2% of users plan to allow cross-app tracking under the new changes.

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