BY J. CLARA CHAN | HollywoodReporter.Com

Troy Warren for CNT #Digital

The company narrowly missed its revenue expectations but surpassed its projections for daily active users.

Snap, the parent company of Snapchat, crossed $1 billion in revenue during Q3 but narrowly missed its projections last quarter of revenue ranging between $1.07 to $1.08 billion. The company also reported it has reached 306 million daily active users for Q3, topping its expectations last quarter of having 301 million daily users.

Snap had a 57 percent increase in revenue year over year, reporting $1.067 billion in revenue for Q3 and a 23 percent year-over-year increase in daily active users, according to the company’s Thursday earnings report. Last quarter, Snap reported reaching 293 million daily active users and $982 million revenue. For Q4, Snap is expecting revenue to range between $1.1 billion to $1.2 billion.

During prepared remarks, Snap CEO Evan Spiegel said it had missed the upper end of its revenue projections by $3 million in large part because of changes to Apple’s iOS platform, which allows users to opt out of ad tracking, that hurt Snap’s ad business. “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 and manage their ad campaigns for iOS,” Spiegel said.

Jeremi Gorman, Snap’s chief business officer, said Snap is working with its advertising partners to address the loss of ad campaign data and other information as a result of the iOS updates. Both Gorman and Spiegel also blamed the pandemic, disruptions to the supply chain and labor shortages for dents to Snap’s ad business.

But Spiegel asserted that the company’s camera and augmented reality offerings remained Snap’s “most exciting long-term revenue opportunity.” On Monday, Snap unveiled a global creative studio for branded AR that will operate as a division of Snap Inc. The studio, Arcadia, will work with brands, agencies and creators on select projects for sponsored AR content and experiences.

In May, Snap also acquired WaveOptics, the AR startup whose technology powers Snap’s AR glasses, for $500 million. (The latest version of the AR glasses, Spectacles, aren’t currently sold to the public but are being given to a select number of creators in the AR space through an application system.) The WaveOptics acquisition comes a few months after Snap purchased an AI-powered clothing technology company, Fit Analytics, for $124.4 million as Snap continues to expand its social commerce offerings.

Though the company markets itself as a camera company, Snap is also continuing its output of original series into 2022. Earlier this week, Snapchat announced upcoming unscripted shows for its 2022 slate with series featuring Stephen Curry, Addison Rae and Ryan Garcia. Snap will also release its first Snap Original made for audiences in the U.K. next year with the British boxer Anthony Joshua.

Next month, Snap will offer new incentives for creators to participate in challenges on Spotlight, its user-generated platform with similarities to TikTok, to go alongside its existing Spotlight fund that pays creators for top-performing public videos on the platform.