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Snap Inc. Announces Second Quarter 2019 Financial Results

July 23, 2019 4:10 PM

Daily Active Users increased 8% year-over-year to 203 million



Revenue increased 48% year-over-year to $388 million



Adjusted EBITDA improved 53% year-over-year to $(79) million

SANTA MONICA, Calif.--(BUSINESS WIRE)-- Snap Inc. (NYSE: SNAP) today announced financial results for the quarter ended June 30, 2019.

Financial Highlights

“The growth in our community, engagement, and revenue is the result of several transitions we completed over the past 18 months,” said Evan Spiegel, CEO. “We look forward to building on our momentum and making significant ongoing progress in each of these areas.”

Three Months Ended June 30,

Percent

Six Months Ended June 30,

Percent

2019

2018

Change

2019

2018

Change

(Unaudited)

(in thousands, except per share amounts)

Cash used in operating activities

$

(95,789

)

$

(199,346

)

(52

)%

$

(161,967

)

$

(431,327

)

(62)

%

Free Cash Flow

$

(103,422

)

$

(234,247

)

56

%

$

(181,414

)

$

(502,543

)

64

%

Common shares outstanding plus shares underlying stock-based awards

1,552,734

1,478,758

5

%

1,552,734

1,478,758

5

%

Operating loss

$

(304,818

)

$

(357,842

)

(15

)%

$

(620,879

)

$

(750,372

)

(17

)%

Revenue

$

388,021

$

262,263

48

%

$

708,447

$

492,929

44

%

Net loss

$

(255,174

)

$

(353,310

)

(28

)%

$

(565,581

)

$

(739,095

)

(23

)%

Adjusted EBITDA

$

(78,713

)

$

(169,032

)

53

%

$

(202,162

)

$

(386,897

)

48

%

Diluted net loss per share attributable to common shareholders

$

(0.19

)

$

(0.27

)

(31

)%

$

(0.42

)

$

(0.58

)

(28

)%

Non-GAAP diluted net loss per share

$

(0.06

)

$

(0.14

)

(56

)%

$

(0.16

)

$

(0.31

)

(49

)%

Q2 2019 Summary & Key Highlights

We added 13 million Daily Active Users in the second quarter and saw increased engagement across key metrics:

We are seeing early results from the improvements of our Android application:

We continue to invest in our Discover platform, with a particular focus on building a sustainable premium content ecosystem:

We continue to invest in our augmented reality platform:

We launched Snap Games in Q2 2019 to bring the fun of playing games with your friends to Snapchat and foster a scalable ecosystem that benefits users, developers, and Snap:

We continue to build on and improve Snap Kit, our set of developer tools that allow our partners to bring Snapchat features into their services:

We strengthened our platform capabilities to drive improved outcomes for advertisers:

Financial Guidance

The following forward-looking statements reflect our expectations for the third quarter of 2019 as of July 23, 2019, and are subject to substantial uncertainty. This guidance assumes, among other things, that no business acquisitions, investments, restructurings, or legal settlements are concluded in the quarter. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”

Q3 2019 Outlook

Conference Call Information

Snap Inc. will host a conference call to discuss the results at 2:00 p.m. Pacific / 5:00 p.m. Eastern today. The live audio webcast along with supplemental information will be accessible at investor.snap.com. A recording of the webcast will also be available following the conference call.

Snap Inc. uses the investor.snap.com and snap.com/news websites as means of disclosing material non-public information and for complying with its disclosure obligation under Regulation FD.

Definitions

Free Cash Flow is defined as net cash provided by (used in) operating activities, reduced by purchases of property and equipment.

Common shares outstanding plus shares underlying stock-based awards includes common shares outstanding, restricted stock units, restricted stock awards, and outstanding stock options.

Adjusted EBITDA is defined as net income (loss), excluding interest income; interest expense; other income (expense) net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense and related payroll tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time.

A Daily Active User (DAU) is defined as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. We calculate average DAUs for a particular quarter by adding the number of DAUs on each day of that quarter and dividing that sum by the number of days in that quarter.

Average revenue per user (ARPU) is defined as quarterly revenue divided by the average DAUs.

A Monthly Active User (MAU) is defined as a registered Snapchat user who opens the Snapchat application at least once during the 30-day period ending on the calendar month-end. We calculate average Monthly Active Users for a particular quarter by calculating the average of the MAUs as of each calendar month-end in that quarter.

Addressable reach is defined as the approximate number of Snapchat users that an ad could reach over a 28-day period in a given locality. When we calculate the percentage of a demographic group that can be reached, we do so by dividing addressable reach by relevant census figures. Addressable reach and age data are subject to limitations. For more information, see Snap’s SEC filings and businesshelp.snapchat.com.

Note: For adjustments and additional information regarding the non-GAAP financial measures and other items discussed, please see “Non-GAAP Financial Measures,” “Reconciliation of GAAP to Non-GAAP Financial Measures,” and “Supplemental Financial Information and Business Metrics.”

About Snap Inc.

Snap Inc. is a camera company. We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate. We contribute to human progress by empowering people to express themselves, live in the moment, learn about the world, and have fun together. For more information, visit snap.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release, including statements regarding guidance, our future results of operations or financial condition, business strategy and plans, user growth and engagement, product initiatives, and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. We caution you that the foregoing may not include all of the forward-looking statements made in this press release.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. These forward-looking statements are subject to risks and uncertainties related to: our financial performance; our lack of profitability to date; our ability to generate and sustain positive cash flow; our ability to attract and retain users, publishers, and advertisers; competition and new market entrants; managing our international expansion and our growth and future expenses; compliance with new laws and regulations; our ability to maintain, protect, and enhance our intellectual property; our ability to attract and retain qualified and key personnel; and future acquisitions or investments, as well as risks, uncertainties, and other factors described in “Risk Factors” and elsewhere in our quarterly report on Form 10-Q for the quarter ended March 31, 2019 filed with the SEC, which is available on the SEC’s website at www.sec.gov. Additional information will be made available in Snap Inc.’s quarterly report on Form 10-Q for the quarter ended June 30, 2019 and other filings that we make from time to time with the SEC. In addition, any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, except as required by law.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use the non-GAAP financial measure of Free Cash Flow, which is defined as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. We believe Free Cash Flow is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business and is a key financial indicator used by management. Additionally, we believe that Free Cash Flow is an important measure since we use third-party infrastructure partners to host our services and therefore we do not incur significant capital expenditures to support revenue generating activities. Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net income (loss); excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense and related payroll tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in Adjusted EBITDA.

We use the non-GAAP financial measure of non-GAAP net loss, which is defined as net income (loss); excluding amortization of intangible assets; stock-based compensation expense and related payroll tax expense; certain other non-cash or non-recurring items impacting net income (loss) from time to time; and related income tax adjustments. Non-GAAP net loss and weighted average diluted shares are then used to calculate non-GAAP diluted net loss per share. Similar to Adjusted EBITDA, we believe these measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses we exclude in the measure.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance through the eyes of management, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see “Reconciliation of GAAP to Non-GAAP Financial Measures.”

Snap Inc., “Snapchat,” and our other registered and common law trade names, trademarks, and service marks are the property of Snap Inc. or our subsidiaries.

SNAP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Cash flows from operating activities

Net loss

$

(255,174

)

$

(353,310

)

$

(565,581

)

$

(739,095

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

22,660

22,514

45,979

44,068

Stock-based compensation

195,574

156,371

358,130

289,630

Deferred income taxes

291

17

25

253

Other

(1,399

)

(5,893

)

(3,316

)

(9,287

)

Gain on divestiture

(39,883

)

—

(39,883

)

—

Change in operating assets and liabilities, net of effect of acquisitions:

Accounts receivable, net of allowance

(39,751

)

(13,926

)

32,119

34,771

Prepaid expenses and other current assets

(4,761

)

7,815

(4,490

)

(2,624

)

Operating lease right-of-use asset

11,809

—

21,621

—

Other assets

2,769

9,021

2,401

13,225

Accounts payable

21,009

(9,653

)

24,099

(46,722

)

Accrued expenses and other current liabilities

7,735

(19,356

)

(6,588

)

(29,505

)

Operating lease liabilities

(16,781

)

—

(27,251

)

—

Other liabilities

113

7,054

768

13,959

Net cash used in operating activities

(95,789

)

(199,346

)

(161,967

)

(431,327

)

Cash flows from investing activities

Purchases of property and equipment

(7,633

)

(34,901

)

(19,447

)

(71,216

)

Sales of property and equipment

—

—

29

—

Proceeds from divestiture, net

73,796

—

73,796

—

Non-marketable investments

(450

)

(21,010

)

(2,700

)

(21,010

)

Purchases of marketable securities

(283,520

)

(396,885

)

(809,040

)

(874,098

)

Sales of marketable securities

77,489

—

77,489

45,007

Maturities of marketable securities

324,033

578,509

782,660

1,366,337

Other

1,000

(2,505

)

1,000

(2,565

)

Net cash provided by investing activities

184,715

123,208

103,787

442,455

Cash flows from financing activities

Proceeds from the exercise of stock options

1,342

1,914

6,938

47,723

Stock repurchases from employees for tax withholdings

—

—

—

(551

)

Net cash provided by financing activities

1,342

1,914

6,938

47,172

Change in cash, cash equivalents, and restricted cash

90,268

(74,224

)

(51,242

)

58,300

Cash, cash equivalents, and restricted cash, beginning of period

247,464

469,531

388,974

337,007

Cash, cash equivalents, and restricted cash, end of period

$

337,732

$

395,307

$

337,732

$

395,307

Supplemental disclosures

Cash paid for income taxes, net

$

(399

)

$

1,406

$

(79

)

$

2,397

SNAP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

Three Months Ended
June 30,

Six Months Ended
June 30,

2019

2018

2019

2018

Revenue

$

388,021

$

262,263

$

708,447

$

492,929

Costs and expenses:

Cost of revenue

215,492

191,565

419,259

388,363

Research and development

236,199

203,246

452,384

404,232

Sales and marketing

111,504

101,685

209,386

203,798

General and administrative

129,644

123,609

248,297

246,908

Total costs and expenses

692,839

620,105

1,329,326

1,243,301

Operating loss

(304,818

)

(357,842

)

(620,879

)

(750,372

)

Interest income

7,446

6,600

15,262

12,704

Interest expense

(809

)

(930

)

(1,565

)

(1,864

)

Other income (expense), net

44,085

(61

)

42,958

3,092

Loss before income taxes

(254,096

)

(352,233

)

(564,224

)

(736,440

)

Income tax benefit (expense)

(1,078

)

(1,077

)

(1,357

)

(2,655

)

Net loss

$

(255,174

)

$

(353,310

)

$

(565,581

)

$

(739,095

)

Net loss per share attributable to Class A, Class B, and Class C common stockholders:

Basic

$

(0.19

)

$

(0.27

)

$

(0.42

)

$

(0.58

)

Diluted

$

(0.19

)

$

(0.27

)

$

(0.42

)

$

(0.58

)

Weighted average shares used in computation of net loss per share:

$

—

Basic

1,362,544

1,294,846

1,350,763

1,283,668

Diluted

1,362,544

1,294,846

1,350,763

1,283,668

SNAP INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

June 30,

2019

December 31,
2018

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

335,744

$

387,149

Marketable securities

849,050

891,914

Accounts receivable, net of allowance

313,504

354,965

Prepaid expenses and other current assets

41,457

41,900

Total current assets

1,539,755

1,675,928

Property and equipment, net

185,440

212,560

Operating lease right-of-use assets

271,745

—

Intangible assets, net

79,811

126,054

Goodwill

628,474

632,370

Other assets

70,800

67,194

Total assets

$

2,776,025

$

2,714,106

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

51,902

$

30,876

Operating lease liabilities

47,100

—

Accrued expenses and other current liabilities

240,935

261,815

Total current liabilities

339,937

292,691

Operating lease liabilities, noncurrent

311,663

—

Other liabilities

7,727

110,416

Total liabilities

659,327

403,107

Commitments and contingencies

Stockholders’ equity

Class A non-voting common stock, $0.00001 par value. 3,000,000 shares

authorized, 999,304 shares issued and outstanding at December 31, 2018, and

3,000,000 shares authorized, 1,096,653 shares issued and outstanding

at June 30, 2019.

11

10

Class B voting common stock, $0.00001 par value. 700,000 shares authorized,

93,846 shares issued and outstanding at December 31, 2018, and 700,000 shares

authorized, 47,582 shares issued and outstanding at June 30, 2019.

—

1

Class C voting common stock, $0.00001 par value. 260,888 shares authorized,

224,611 shares issued and outstanding at December 31, 2018, and 260,888 shares

authorized, 227,914 shares issued and outstanding at June 30, 2019.

2

2

Additional paid-in capital

8,592,434

8,220,417

Accumulated other comprehensive income

2,102

3,147

Accumulated deficit

(6,477,851

)

(5,912,578

)

Total stockholders’ equity

2,116,698

2,310,999

Total liabilities and stockholders’ equity

$

2,776,025

$

2,714,106

SNAP INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Free Cash Flow reconciliation:

Net cash used in operating activities

$

(95,789

)

$

(199,346

)

$

(161,967

)

$

(431,327

)

Less:

Purchases of property and equipment

(7,633

)

(34,901

)

(19,447

)

(71,216

)

Free Cash Flow

$

(103,422

)

$

(234,247

)

$

(181,414

)

$

(502,543

)

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Adjusted EBITDA reconciliation:

Net loss

$

(255,174

)

$

(353,310

)

$

(565,581

)

$

(739,095

)

Add (deduct):

Interest income

(7,446

)

(6,600

)

(15,262

)

(12,704

)

Interest expense

809

930

1,565

1,864

Other (income) expense, net

(44,085

)

61

(42,958

)

(3,092

)

Income tax (benefit) expense

1,078

1,077

1,357

2,655

Depreciation and amortization

22,660

22,514

45,979

44,068

Stock-based compensation expense

195,574

156,371

358,130

289,630

Payroll tax expense related to stock-based compensation

7,871

5,997

14,608

15,965

Reduction in force charges(1)

—

—

—

9,884

Lease exit charges(2)

—

3,928

—

3,928

Adjusted EBITDA

$

(78,713

)

$

(169,032

)

$

(202,162

)

$

(386,897

)

(1)

Reduction in force charges in the first quarter of 2018 were related to a reduction in force plan impacting approximately 7% of our then global headcount, primarily in engineering and sales. The charges are composed primarily of severance expense and related payroll tax expense. These charges are non-recurring and not reflective of underlying trends in our business. Additionally, we recognized a stock-based compensation forfeiture benefit of $31.5 million, which is included in the stock-based compensation expense line item above.

(2)

Lease exit charges were related to our exit of various operating leases prior to the end of the contractual lease term, primarily as a result of moving to a centralized corporate office located in Santa Monica, California. We recorded a lease exit charge of $3.9 million in the second quarter of 2018. The charge reflects the present value of our remaining lease obligation on the cease use dates that occurred during the quarter, net of sublease income. These charges are non-recurring and not reflective of underlying trends in our business.

SNAP INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except per share amounts, unaudited)

Total depreciation and amortization expense by function:

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Depreciation and amortization expense:

Cost of revenue

$

5,642

$

5,610

$

11,788

$

10,812

Research and development

7,188

9,489

15,838

18,280

Sales and marketing

3,045

3,991

7,060

7,560

General and administrative

6,785

3,424

11,293

7,416

Total

$

22,660

$

22,514

$

45,979

$

44,068

Total stock-based compensation expense by function:

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Stock-based compensation expense:

Cost of revenue

$

1,786

$

1,467

$

3,635

$

1,743

Research and development

132,610

92,303

244,852

170,118

Sales and marketing

26,474

21,996

44,234

38,182

General and administrative

34,704

40,605

65,409

79,587

Total

$

195,574

$

156,371

$

358,130

$

289,630

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Non-GAAP net loss reconciliation:

Net loss

$

(255,174

)

$

(353,310

)

$

(565,581

)

$

(739,095

)

Amortization of intangible assets

9,048

10,754

19,417

21,577

Stock-based compensation expense

195,574

156,371

358,130

289,630

Payroll tax expense related to stock-based compensation

7,871

5,997

14,608

15,965

Gain on divestiture

(39,883

)

—

(39,883

)

—

Reduction in force charges

—

—

—

9,884

Lease exit charges

—

3,928

—

3,928

Income tax adjustments

376

(339

)

262

(119

)

Non-GAAP net loss

$

(82,188

)

$

(176,599

)

$

(213,047

)

$

(398,230

)

Weighted-average common shares - Diluted

1,362,544

1,294,846

1,350,763

1,283,668

Non-GAAP diluted net loss per share reconciliation:

Diluted net loss per share

$

(0.19

)

$

(0.27

)

$

(0.42

)

$

(0.58

)

Non-GAAP adjustment to net loss

0.13

0.13

0.26

0.27

Non-GAAP diluted net loss per share

$

(0.06

)

$

(0.14

)

$

(0.16

)

$

(0.31

)

SNAP INC.

SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS

(dollars and shares in thousands, except as noted below, unaudited)

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Cash Flows and Shares

Net cash used in operating activities

$

(231,981

)

$

(199,346

)

$

(132,543

)

$

(126,054

)

$

(66,178

)

$

(95,789

)

Net cash used in operating activities - YoY (year-over-year)

(50

)%

5

%

32

%

28

%

71

%

52

%

Net cash used in operating activities - TTM (trailing twelve months)

$

(811,651

)

$

(801,423

)

$

(739,953

)

$

(689,924

)

$

(524,121

)

$

(420,564

)

Purchases of property and equipment

$

(36,315

)

$

(34,901

)

$

(26,285

)

$

(22,741

)

$

(11,814

)

$

(7,633

)

Purchases of property and equipment - YoY

102

%

80

%

1

%

7

%

(67

)%

(78

)%

Purchases of property and equipment - TTM

$

(102,840

)

$

(118,376

)

$

(118,713

)

$

(120,242

)

$

(95,741

)

$

(68,473

)

Free Cash Flow

$

(268,296

)

$

(234,247

)

$

(158,828

)

$

(148,795

)

$

(77,992

)

$

(103,422

)

Free Cash Flow - YoY

(55

)%

(2

)%

28

%

25

%

71

%

56

%

Free Cash Flow - TTM

$

(914,491

)

$

(919,799

)

$

(858,666

)

$

(810,166

)

$

(619,862

)

$

(489,037

)

Common shares outstanding

1,254,439

1,273,163

1,291,217

1,317,760

1,334,931

1,372,149

Common shares outstanding - YoY

6

%

8

%

7

%

8

%

6

%

8

%

Shares underlying stock-based awards

202,175

205,595

184,802

188,863

209,055

180,585

Shares underlying stock-based awards - YoY

(20

)%

(19

)%

(23

)%

(18

)%

3

%

(12

)%

Total common shares outstanding plus shares underlying stock-based awards

1,456,613

1,478,758

1,476,019

1,506,623

1,543,986

1,552,734

Total common shares outstanding plus shares underlying stock-based awards - YoY

2

%

3

%

2

%

4

%

6

%

5

%

Results of Operations

Revenue

$

230,666

$

262,263

$

297,695

$

389,822

$

320,426

$

388,021

Revenue - YoY

54

%

44

%

43

%

36

%

39

%

48

%

Revenue - TTM

$

905,967

$

986,559

$

1,076,317

$

1,180,446

$

1,270,206

$

1,395,964

Revenue by region(1)

North America

$

170,488

$

177,410

$

207,477

$

268,858

$

225,705

$

260,017

North America - YoY

32

%

20

%

24

%

23

%

32

%

47

%

North America - TTM

$

704,827

$

734,599

$

774,769

$

824,233

$

879,450

$

962,057

Europe

$

32,721

$

40,241

$

50,478

$

62,470

$

47,448

$

60,633

Europe - YoY

150

%

82

%

85

%

56

%

45

%

51

%

Europe - TTM

$

122,011

$

140,200

$

163,416

$

185,910

$

200,637

$

221,029

Rest of World

$

27,458

$

44,612

$

39,740

$

58,495

$

47,273

$

67,374

Rest of World - YoY

251

%

272

%

197

%

122

%

72

%

51

%

Rest of World - TTM

$

79,130

$

111,761

$

138,133

$

170,305

$

190,120

$

212,882

Operating loss

$

(392,530

)

$

(357,842

)

$

(323,371

)

$

(194,707

)

$

(316,061

)

$

(304,818

)

Operating loss - YoY

82

%

20

%

30

%

46

%

19

%

15

%

Operating loss - Margin

(170

)%

(136

)%

(109

)%

(50

)%

(99

)%

(79

)%

Operating loss - TTM

$

(1,664,339

)

$

(1,573,163

)

$

(1,434,707

)

$

(1,268,450

)

$

(1,191,981

)

$

(1,138,957

)

Net loss

$

(385,785

)

$

(353,310

)

$

(325,148

)

$

(191,668

)

$

(310,407

)

$

(255,174

)

Net loss - YoY

(83

)%

(20

)%

(27

)%

(45

)%

(20

)%

(28

)%

Net loss - TTM

$

(1,622,014

)

$

(1,532,231

)

$

(1,414,220

)

$

(1,255,911

)

$

(1,180,533

)

$

(1,082,397

)

Adjusted EBITDA

$

(217,867

)

$

(169,032

)

$

(138,377

)

(50,363

)

(123,449

)

(78,713

)

Adjusted EBITDA - YoY

(16

)%

13

%

23

%

68

%

43

%

53

%

Adjusted EBITDA - Margin

(94

)%

(64

)%

(46

)%

(13

)%

(39

)%

(20

)%

Adjusted EBITDA - TTM

$

(749,680

)

$

(724,722

)

$

(684,198

)

$

(575,637

)

$

(481,221

)

$

(390,902

)

(1)

Total revenue for geographic reporting is apportioned to each region based on our determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This allocation is consistent with how we determine ARPU.

SNAP INC.

SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS (continued)

(dollars and shares in thousands, except as noted below, unaudited)

Q1 2018

Q2 2018

Q3 2018

Q4 2018

Q1 2019

Q2 2019

Other

DAU (in millions)

191

188

186

186

190

203

DAU - YoY

15

%

8

%

5

%

(0

)%

(0

)%

8

%

DAU by region (in millions)

North America

81

80

79

79

80

83

North America - YoY

14

%

7

%

3

%

(1

)%

(1

)%

3

%

Europe

62

61

59

60

61

64

Europe - YoY

13

%

7

%

4

%

(1

)%

(2

)%

5

%

Rest of World

48

47

47

47

49

56

Rest of World - YoY

18

%

12

%

8

%

1

%

2

%

21

%

ARPU

$

1.21

$

1.40

$

1.60

$

2.09

$

1.68

$

1.91

ARPU - YoY

34

%

34

%

37

%

37

%

39

%

37

%

ARPU by region

North America

$

2.10

$

2.21

$

2.62

$

3.38

$

2.81

$

3.14

North America - YoY

16

%

12

%

20

%

23

%

34

%

42

%

Europe

$

0.53

$

0.66

$

0.85

$

1.04

$

0.77

$

0.95

Europe - YoY

120

%

70

%

78

%

57

%

47

%

43

%

Rest of World

$

0.58

$

0.96

$

0.84

$

1.24

$

0.97

$

1.20

Rest of World - YoY

198

%

233

%

175

%

120

%

68

%

25

%

Employees (full-time; excludes part-time, contractors, and temporary personnel)

2,989

2,879

2,903

2,884

2,818

2,734

Employees - YoY

27

%

10

%

(2

)%

(6

)%

(6

)%

(5

)%

Depreciation and amortization expense

Cost of revenue

$

5,202

$

5,610

$

5,582

$

9,888

$

6,146

$

5,642

Research and development

8,791

9,489

10,174

4,547

8,650

7,188

Sales and marketing

3,569

3,991

4,054

3,475

4,015

3,045

General and administrative

3,991

3,424

5,088

4,772

4,508

6,785

Total

$

21,553

$

22,514

$

24,898

$

22,682

$

23,319

$

22,660

Depreciation and amortization expense - YoY

73

%

79

%

43

%

21

%

8

%

1

%

Stock-based compensation expense

Cost of revenue

$

276

$

1,467

$

1,368

$

1,283

$

1,849

$

1,786

Research and development

77,815

92,303

95,329

75,086

112,242

132,610

Sales and marketing

16,185

21,996

25,082

20,795

17,760

26,474

General and administrative

38,982

40,605

5,030

24,608

30,705

34,704

Total

$

133,258

$

156,371

$

126,809

$

121,772

$

162,556

$

195,574

Stock-based compensation expense - YoY

(93

)%

(36

)%

(43

)%

(33

)%

22

%

25

%

Investors and Analysts:

[email protected]

Press:

[email protected]

Source: Snap Inc.

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