Facebook Inc soundly beat quarterly revenue estimates on Wednesday after heavy holiday advertising by e-commerce retailers, but it warned Apple’s impending privacy changes could hurt revenue by interfering with ad targeting.

The world’s biggest social media company said it expected to face “significant ad targeting headwinds in 2021.” Facebook forecast that Apple’s update of its iPhone operating system to iOS 14 could start biting into revenues as early as the end of the first quarter.

Shares were flat after hours following an initial drop.

The fourth-quarter results validated the company’s focus on making it easier for retailers to sell products to Facebook users, who frequently were stuck at home last year during the COVID-19 pandemic.

For example, Facebook launched Facebook Pay and Facebook Shops which enable consumers to click on ads and make purchases without leaving the company’s apps, which also include Instagram and WhatsApp.

The company said the pandemic-driven surge in online commerce and shift in consumer demand to products over services buoyed revenue growth, which has been cooling steadily as its business matures.

Total revenue, which consists almost entirely of advertising sales, rose 33% to $28.07 billion in the fourth quarter ended Dec. 31 from $21.08 billion a year earlier.

Analysts on average estimated quarterly revenue of $26.44 billion, according to IBES data from Refinitiv.

Net income came in at $11.22 billion, or $3.88 per share, compared with $7.35 billion, or $2.56 per share, a year earlier.

Monthly active users rose 12% to 2.80 billion, above the 2.75 billion expected by analysts.