Daily Active Users increased 10% year-over-year
to 414 million
Fourth quarter revenue increased 5%
year-over-year to $1,361 million
Fourth quarter operating cash flow of $165
million and Free Cash Flow of $111 million
Snap Inc. (NYSE: SNAP) today announced financial results for the
quarter and full year ended December 31, 2023.
“2023 was a pivotal year for Snap, as we transformed our
advertising business and continued to expand our global community,
reaching 414 million daily active users,” said Evan Spiegel, CEO.
“Snapchat enhances relationships with friends, family, and the
world, and this unique value proposition has provided a strong
foundation to build our business for long-term growth.”
Annual Financial Summary
- Revenue was $4,606 million in 2023, compared to $4,602 million
in 2022.
- Net loss was $1,322 million in 2023, compared to $1,430 million
in 2022.
- Fourth consecutive year of positive Adjusted EBITDA at $162
million in 2023.
- Third consecutive year of positive operating cash flow at $247
million in 2023.
- Third consecutive year of positive Free Cash Flow at $35
million in 2023.
Q4 2023 Financial Summary
- Revenue was $1,361 million, compared to $1,300 million in the
prior year, an increase of 5% year-over-year.
- Net loss was $248 million, compared to $288 million in the
prior year.
- Adjusted EBITDA was $159 million, compared to $233 million in
the prior year.
- Operating cash flow was $165 million, compared to $125 million
in the prior year.
- Free Cash Flow was $111 million, compared to $78 million in the
prior year.
Three Months Ended
December 31,
Percent
Change
Twelve Months Ended
December 31,
Percent
Change
2023
2022
2023
2022
(Unaudited)
(in thousands, except per
share amounts)
Revenue
$
1,361,287
$
1,299,735
5
%
$
4,606,115
$
4,601,847
—
%
Operating loss
$
(248,713
)
$
(287,597
)
14
%
$
(1,398,379
)
$
(1,395,306
)
—
%
Net loss
$
(248,247
)
$
(288,460
)
14
%
$
(1,322,485
)
$
(1,429,653
)
7
%
Adjusted EBITDA (1)
$
159,149
$
233,275
(32
)%
$
161,577
$
377,573
(57
)%
Net cash provided by (used in) operating
activities
$
164,574
$
125,291
31
%
$
246,521
$
184,614
34
%
Free Cash Flow (2)
$
110,855
$
78,366
41
%
$
34,794
$
55,308
(37
)%
Diluted net loss per share attributable to
common stockholders
$
(0.15
)
$
(0.18
)
17
%
$
(0.82
)
$
(0.89
)
8
%
Non-GAAP diluted net income (loss) per
share (3)
$
0.08
$
0.14
(43
)%
$
0.09
$
0.17
(47
)%
(1)
See page 10 for reconciliation of
net loss to Adjusted EBITDA. In the third quarter of 2023, we
initiated a wind down of our AR Enterprise business, which included
a reduction of our global employee headcount by approximately 3%.
Total restructuring charges included in our consolidated statements
of operations for the three and twelve months ended December 31,
2023 were $22.2 million and $40.8 million, respectively. In the
third quarter of 2022, we initiated a strategic reprioritization
plan, which included a reduction of our global employee headcount
by approximately 20%. Total restructuring charges included in our
consolidated statements of operations for the three and twelve
months ended December 31, 2022 were $34.3 million and $188.9
million, respectively.
(2)
See page 10 for reconciliation of
net cash provided by (used in) operating activities to Free Cash
Flow.
(3)
See page 11 for reconciliation of
diluted net loss per share to non-GAAP diluted net income (loss)
per share.
Q4 2023 Summary & Key Highlights
We grew and deepened our engagement with our
community:
- DAUs were 414 million in Q4 2023, an increase of 39 million, or
10%, year-over-year.
- DAUs increased sequentially and year-over-year on both iOS and
Android platforms.
- Total time spent watching Spotlight content increased more than
175% year-over-year, and Spotlight average monthly active users
increased more than 35% year-over-year.
- Total public Stories posted by Snap Stars grew over 125%
year-over-year in the United States.
- We signed a new publisher deal with Spotify in the United
States that will bring shorter-form highlights from Spotify’s
podcasts onto Spotlight and Stories.
We are focused on accelerating and diversifying our revenue
growth:
- Snapchat+, our subscription service that offers exclusive,
experimental, and pre-release features, reached over 7 million
subscribers.
- We announced new AI-powered features for Snapchat+ subscribers,
giving them the ability to enhance their Snaps and create and send
AI-generated images based on a text prompt.
- Ongoing momentum with our 7/0 Pixel Purchase optimization model
led to a more than 90% increase in purchase related conversions
year-over-year.
- We launched Snap Promote, an easy-to-use ad creation interface
within the Snapchat app, that helps an entire new audience of
creators and small businesses discover our ads platform and grow
their reach and followers by creating engaging promotions with just
a few clicks.
- With the introduction of Creator Collab Campaigns, a suite of
products making it easier for advertisers to discover and partner
with the influential creator community on Snapchat, we helped
advertisers like e.l.f. Cosmetics activate creator-inspired beauty
campaigns to drive results against their business goals.
- We partnered with NYX Professional Makeup to release Beauty
Bestie, an interactive, AR- and AI-powered sponsored Lens
experience that recommends beauty products based on a Snapchatter’s
aesthetic, mood, and color palettes.
We invested in our augmented reality platform:
- Over 350,000 AR creators and developers have built nearly 3.5
million AR Lenses that have been viewed over 3 trillion times.
- Over 300 million Snapchatters engage with augmented reality
every day, on average.
- At our annual Lens Fest, we released our Lens Studio 5.0 Beta,
which features dramatically faster project load times, new AI
capabilities leveraging ChatGPT, and team collaboration tools.
- We optimized the ML Lens creation workflow by utilizing
Generative models and investing into tooling and automation, which
have contributed to the number of ML Lenses viewed by Snapchatters
increasing more than 60% year-over-year.
- We partnered with the Rolling Stones to celebrate the release
of the new Rolling Stones album “Hackney Diamonds” with a Rolling
Stones Bitmoji Show Lens that projects 3D Bitmoji avatars of Mick
Jagger, Keith Richards, and Ronnie Wood using the phone’s
back-facing camera.
- We hosted our inaugural APAC AR Day in Mumbai, India,
celebrating the region’s thriving AR creator and developer
community and our ongoing commitment to democratizing AR for users
and brands.
- We extended the reach of our AR content via Camera Kit Live in
sports venues including the stadiums of the Cincinnati Bengals,
Seattle Mariners, and the Barclays Center, home of the Brooklyn
Nets, and New York Liberty. Additionally, we've incorporated AR in
telecasts such as the 2023 MTV Video Music Awards and ESPN's SEC
Nation, and music festivals including the Bonnaroo Music & Arts
Festival.
- We teamed up with Inspirit, an edtech company, to bring our AR
technology to Inspirit’s STEM curriculum powered by Camera
Kit.
Q1 2024 Outlook
As we enter Q1, we anticipate continued growth of our global
community and, as a result, our guidance range is built on the
assumption that DAU will be approximately 420 million in Q1. We are
focused on executing against our roadmap to deliver improvements to
our direct-response advertising platform to drive improved results
for our advertising partners and accelerate topline growth. Our
guidance range is for revenue of $1,095 million to $1,135 million,
implying year-over-year revenue growth of 11% to 15%. Based on this
revenue range and our investment plans for the quarter, we estimate
that Adjusted EBITDA will be between negative $55 million and
negative $95 million in Q1.
Conference Call Information
Snap Inc. will host a conference call to discuss the results at
3 p.m. Pacific / 6 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 its websites (including snap.com and
investor.snap.com) 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; payroll and other tax expense
related to stock-based compensation; and certain other 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. At the
beginning of the first quarter 2024, we updated the definition of
DAU to include web platform use. Historically, DAU from web
platforms has not been material.
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. At the beginning of the first quarter 2024, we
updated the definition of MAU to include web platform use.
Historically, MAU from web platforms has not been material.
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 technology company. We believe the camera
presents the 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, future stock
repurchase programs or stock dividends, business strategy and
plans, user growth and engagement, product initiatives, objectives
of management for future operations, and advertiser and partner
offerings, 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,
including our financial outlook, macroeconomic uncertainty, and
geo-political conflicts, that we believe may continue to 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
ability to attain and sustain profitability; our ability to
generate and sustain positive cash flow; our ability to attract and
retain users, partners, and advertisers; competition and new market
entrants; managing our growth and future expenses; compliance with
new laws, regulations, and executive actions; our ability to
maintain, protect, and enhance our intellectual property; our
ability to succeed in existing and new market segments; our ability
to attract and retain qualified team members and key personnel; our
ability to repay or refinance outstanding debt, or to access
additional financing; future acquisitions, divestitures, or
investments; and the potential adverse impact of climate change,
natural disasters, health epidemics, macroeconomic conditions, and
war or other armed conflict, as well as risks, uncertainties, and
other factors described in “Risk Factors” and elsewhere in our most
recent periodic report filed with the U.S. Securities and Exchange
Commission, or SEC, which is available on the SEC’s website at
www.sec.gov. Additional information will be made available in our
periodic report that will be filed with the SEC for the period
covered by this press release 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,
including future developments related to geo-political conflicts
and macroeconomic conditions, 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; payroll and other tax expense related to stock-based
compensation; and certain other 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 income
(loss), which is defined as net income (loss); excluding
amortization of intangible assets; stock-based compensation
expense; payroll and other tax expense related to stock-based
compensation; certain other items impacting net income (loss) from
time to time; and related income tax adjustments. Non-GAAP net
income (loss) and weighted average diluted shares are then used to
calculate non-GAAP diluted net income (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
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Cash flows from operating
activities
Net loss
$
(248,247
)
$
(288,460
)
$
(1,322,485
)
$
(1,429,653
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
52,324
48,491
168,441
202,173
Stock-based compensation
333,197
450,574
1,324,004
1,387,787
Amortization of debt issuance costs
1,844
1,837
7,361
6,865
Losses (gains) on debt and equity
securities, net
27,139
21,279
33,027
36,838
Other
4,140
(741
)
(26,958
)
15,596
Change in operating assets and
liabilities, net of effect of acquisitions:
Accounts receivable, net of allowance
(153,899
)
(182,216
)
(98,127
)
(119,780
)
Prepaid expenses and other current
assets
5,219
(8,803
)
(9,920
)
(40,917
)
Operating lease right-of-use assets
17,295
18,236
70,674
71,441
Other assets
5,430
12,129
2,238
(504
)
Accounts payable
140,485
(13,950
)
94,988
46,492
Accrued expenses and other current
liabilities
(6,567
)
88,890
62,130
71,706
Operating lease liabilities
(15,484
)
(22,455
)
(68,007
)
(68,886
)
Other liabilities
1,698
480
9,155
5,456
Net cash provided by (used in) operating
activities
164,574
125,291
246,521
184,614
Cash flows from investing
activities
Purchases of property and equipment
(53,719
)
(46,925
)
(211,727
)
(129,306
)
Purchases of strategic investments
—
(13,996
)
(7,770
)
(26,346
)
Sales of strategic investments
2,408
—
7,559
63,276
Cash paid for acquisitions, net of cash
acquired
—
(35,409
)
(50,254
)
(67,067
)
Purchases of marketable securities
(5,956
)
(753,372
)
(2,048,273
)
(3,485,638
)
Sales of marketable securities
351,757
23,799
459,481
75,716
Maturities of marketable securities
330,980
704,773
2,424,717
2,525,215
Other
(2,347
)
16
(2,779
)
(18,125
)
Net cash provided by (used in) investing
activities
623,123
(121,114
)
570,954
(1,062,275
)
Cash flows from financing
activities
Proceeds from issuance of convertible
notes, net of issuance costs
—
—
—
1,483,500
Purchase of capped calls
—
—
—
(177,000
)
Proceeds from the exercise of stock
options
622
401
1,038
4,272
Payments of debt issuance costs
—
—
—
(3,006
)
Repurchases of Class A non-voting common
stock
(189,394
)
(500,539
)
(189,394
)
(1,001,052
)
Deferred payments for acquisitions
(15,876
)
—
(270,433
)
—
Net cash provided by (used in) financing
activities
(204,648
)
(500,138
)
(458,789
)
306,714
Change in cash, cash equivalents, and
restricted cash
583,049
(495,961
)
358,686
(570,947
)
Cash, cash equivalents, and restricted
cash, beginning of period
1,199,413
1,919,737
1,423,776
1,994,723
Cash, cash equivalents, and restricted
cash, end of period
$
1,782,462
$
1,423,776
$
1,782,462
$
1,423,776
Supplemental disclosures
Cash paid for income taxes, net
$
3,714
$
3,121
$
30,924
$
12,087
Cash paid for interest
$
685
$
682
$
10,244
$
8,873
SNAP INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts, unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Revenue
$
1,361,287
$
1,299,735
$
4,606,115
$
4,601,847
Costs and expenses:
Cost of revenue
621,504
481,311
2,114,117
1,815,342
Research and development
483,528
584,942
1,910,862
2,109,800
Sales and marketing
275,811
295,150
1,122,092
1,118,746
General and administrative
229,157
225,929
857,423
953,265
Total costs and expenses
1,610,000
1,587,332
6,004,494
5,997,153
Operating loss
(248,713
)
(287,597
)
(1,398,379
)
(1,395,306
)
Interest income
43,463
28,698
168,394
58,597
Interest expense
(5,275
)
(5,312
)
(22,024
)
(21,459
)
Other income (expense), net
(34,447
)
(20,043
)
(42,414
)
(42,529
)
Loss before income taxes
(244,972
)
(284,254
)
(1,294,423
)
(1,400,697
)
Income tax benefit (expense)
(3,275
)
(4,206
)
(28,062
)
(28,956
)
Net loss
$
(248,247
)
$
(288,460
)
$
(1,322,485
)
$
(1,429,653
)
Net loss per share attributable to Class
A, Class B, and Class C common stockholders:
Basic
$
(0.15
)
$
(0.18
)
$
(0.82
)
$
(0.89
)
Diluted
$
(0.15
)
$
(0.18
)
$
(0.82
)
$
(0.89
)
Weighted average shares used in
computation of net loss per share:
Basic
1,638,714
1,573,883
1,612,504
1,608,304
Diluted
1,638,714
1,573,883
1,612,504
1,608,304
SNAP INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except par value,
unaudited)
December 31,
2023
December 31,
2022
Assets
Current assets
Cash and cash equivalents
$
1,780,400
$
1,423,121
Marketable securities
1,763,680
2,516,003
Accounts receivable, net of allowance
1,278,176
1,183,092
Prepaid expenses and other current
assets
153,587
134,431
Total current assets
4,975,843
5,256,647
Property and equipment, net
410,326
271,777
Operating lease right-of-use assets
516,862
370,952
Intangible assets, net
146,303
204,480
Goodwill
1,691,827
1,646,120
Other assets
226,597
279,562
Total assets
$
7,967,758
$
8,029,538
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
278,961
$
181,774
Operating lease liabilities
49,321
46,485
Accrued expenses and other current
liabilities
805,836
987,340
Total current liabilities
1,134,118
1,215,599
Convertible senior notes, net
3,749,400
3,742,520
Operating lease liabilities,
noncurrent
546,279
386,271
Other liabilities
123,849
104,450
Total liabilities
5,553,646
5,448,840
Commitments and contingencies
Stockholders’ equity
Class A non-voting common stock, $0.00001
par value. 3,000,000 shares authorized, 1,440,541 shares issued,
1,391,341 shares outstanding at December 31, 2023, and 3,000,000
shares authorized, 1,371,242 shares issued, 1,319,930 shares
outstanding at December 31, 2022.
14
13
Class B voting common stock, $0.00001 par
value. 700,000 shares authorized, 22,528 shares issued and
outstanding at December 31, 2023, and 700,000 shares authorized,
22,529 shares issued and outstanding at December 31, 2022.
—
—
Class C voting common stock, $0.00001 par
value. 260,888 shares authorized, 231,627 shares issued and
outstanding at December 31, 2023 and December 31, 2022.
2
2
Treasury stock, at cost. 49,200 and 51,312
shares of Class A non-voting common stock at December 31, 2023 and
December 31, 2022, respectively.
(479,903
)
(500,514
)
Additional paid-in capital
14,613,404
13,309,828
Accumulated deficit
(11,726,536
)
(10,214,657
)
Accumulated other comprehensive income
(loss)
7,131
(13,974
)
Total stockholders’ equity
2,414,112
2,580,698
Total liabilities and stockholders’
equity
$
7,967,758
$
8,029,538
SNAP INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(in thousands, unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Free Cash Flow reconciliation:
Net cash provided by (used in) operating
activities
$
164,574
$
125,291
$
246,521
$
184,614
Less:
Purchases of property and equipment
(53,719
)
(46,925
)
(211,727
)
(129,306
)
Free Cash Flow
$
110,855
$
78,366
$
34,794
$
55,308
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Adjusted EBITDA reconciliation:
Net loss
$
(248,247
)
$
(288,460
)
$
(1,322,485
)
$
(1,429,653
)
Add (deduct):
Interest income
(43,463
)
(28,698
)
(168,394
)
(58,597
)
Interest expense
5,275
5,312
22,024
21,459
Other (income) expense, net
34,447
20,043
42,414
42,529
Income tax (benefit) expense
3,275
4,206
28,062
28,956
Depreciation and amortization
43,882
34,975
159,999
186,434
Stock-based compensation expense
333,063
446,339
1,319,783
1,353,283
Payroll and other tax expense related to
stock-based compensation
8,706
5,172
39,324
44,213
Restructuring charges (1)
22,211
34,386
40,850
188,949
Adjusted EBITDA
$
159,149
$
233,275
$
161,577
$
377,573
(1)
Restructuring charges in 2023
relating to the wind down of our AR Enterprise business were
composed primarily of cash severance, stock-based compensation
expense, and charges related to the revision of the useful lives
and disposal of certain acquired intangible assets. Additionally,
we recognized an income tax benefit of $5.7 million for the three
and twelve months ended December 31, 2023 relating to the wind
down, which is included in the income tax (benefit) expense line
item above. Restructuring charges in 2022 relating to the strategic
reprioritization plan were composed primarily of severance and
related charges of $6.0 million and $97.1 million for the three and
twelve months ended December 31, 2022, respectively, stock-based
compensation expense, lease exit and related charges, impairment
charges, contract termination charges, and intangible asset
amortization. These charges are not reflective of underlying trends
in our business.
Total depreciation and amortization
expense by function:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Depreciation and amortization expense
(1):
Cost of revenue
$
3,171
$
8,114
$
12,751
$
24,235
Research and development
31,040
29,834
106,278
98,041
Sales and marketing
10,017
6,130
26,161
67,169
General and administrative
8,096
4,413
23,251
12,728
Total
$
52,324
$
48,491
$
168,441
$
202,173
(1)
Depreciation and amortization
expense for the three and twelve months ended December 31, 2023 and
2022 includes restructuring charges.
SNAP INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except per share
amounts, unaudited)
Total stock-based compensation expense by
function:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Stock-based compensation expense
(1):
Cost of revenue
$
2,665
$
4,248
$
9,555
$
12,288
Research and development
220,996
319,447
893,026
970,746
Sales and marketing
70,369
69,346
255,688
203,092
General and administrative
39,167
57,533
165,735
201,661
Total
$
333,197
$
450,574
$
1,324,004
$
1,387,787
(1)
Stock-based compensation expense
for the three and twelve months ended December 31, 2023 and 2022
includes restructuring charges.
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Non-GAAP net income (loss)
reconciliation:
Net loss
$
(248,247
)
$
(288,460
)
$
(1,322,485
)
$
(1,429,653
)
Amortization of intangible assets
17,484
18,073
72,778
123,413
Stock-based compensation expense
333,063
446,339
1,319,783
1,353,283
Payroll and other tax expense related to
stock-based compensation
8,706
5,172
39,324
44,213
Restructuring charges (1)
22,211
34,386
40,850
188,949
Income tax adjustments
(5,306
)
(988
)
(6,116
)
(2,507
)
Non-GAAP net income (loss)
$
127,911
$
214,522
$
144,134
$
277,698
Weighted-average common shares -
Diluted
1,638,714
1,573,883
1,612,504
1,608,304
Non-GAAP diluted net income (loss) per
share reconciliation:
Diluted net loss per share
$
(0.15
)
$
(0.18
)
$
(0.82
)
$
(0.89
)
Non-GAAP adjustment to net loss
0.23
0.32
0.91
1.06
Non-GAAP diluted net income (loss) per
share
$
0.08
$
0.14
$
0.09
$
0.17
(1)
Restructuring charges in 2023
relating to the wind down of our AR Enterprise business were
composed primarily of cash severance, stock-based compensation
expense, and charges related to the revision of the useful lives
and disposal of certain acquired intangible assets. Additionally,
we recognized an income tax benefit of $5.7 million for the three
and twelve months ended December 31, 2023 relating to the wind
down, which is included in the income tax adjustments line item
above. Restructuring charges in 2022 relating to the strategic
reprioritization plan were composed primarily of severance and
related charges of $6.0 million and $97.1 million for the three and
twelve months ended December 31, 2022, respectively, stock-based
compensation expense, lease exit and related charges, impairment
charges, contract termination charges, and intangible asset
amortization. These charges are not reflective of underlying trends
in our business.
SNAP INC.
SUPPLEMENTAL FINANCIAL
INFORMATION AND BUSINESS METRICS
(dollars and shares in thousands,
except per user amounts, unaudited)
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
(NM = Not Meaningful)
Cash Flows and Shares
Net cash provided by (used in) operating
activities
$
55,945
$
125,291
$
151,102
$
(81,936
)
$
12,781
$
164,574
Net cash provided by (used in) operating
activities - YoY (year-over-year)
(22
)%
(32
)%
19
%
34
%
(77
)%
31
%
Net cash provided by (used in) operating
activities - TTM (trailing twelve months)
$
244,851
$
184,614
$
208,257
$
250,402
$
207,238
$
246,521
Purchases of property and equipment
$
(37,836
)
$
(46,925
)
$
(47,630
)
$
(36,943
)
$
(73,435
)
$
(53,719
)
Purchases of property and equipment -
YoY
91
%
91
%
125
%
58
%
94
%
14
%
Purchases of property and equipment -
TTM
$
(106,946
)
$
(129,306
)
$
(155,761
)
$
(169,334
)
$
(204,933
)
$
(211,727
)
Free Cash Flow
$
18,109
$
78,366
$
103,472
$
(118,879
)
$
(60,654
)
$
110,855
Free Cash Flow - YoY
(65
)%
(51
)%
(3
)%
19
%
(435
)%
41
%
Free Cash Flow - TTM
$
137,905
$
55,308
$
52,496
$
81,068
$
2,305
$
34,794
Common shares outstanding
1,605,868
1,574,086
1,595,205
1,616,119
1,638,905
1,645,496
Common shares outstanding - YoY
—
%
(3
)%
(2
)%
(2
)%
2
%
5
%
Shares underlying stock-based awards
94,772
131,718
128,218
149,065
154,525
157,981
Shares underlying stock-based awards -
YoY
2
%
59
%
71
%
62
%
63
%
20
%
Total common shares outstanding plus
shares underlying stock-based awards
1,700,640
1,705,804
1,723,423
1,765,184
1,793,430
1,803,477
Total common shares outstanding plus
shares underlying stock-based awards - YoY
—
%
—
%
1
%
2
%
5
%
6
%
Results of Operations
Revenue
$
1,128,476
$
1,299,735
$
988,608
$
1,067,669
$
1,188,551
$
1,361,287
Revenue - YoY
6
%
0.1
%
(7
)%
(4
)%
5
%
5
%
Revenue - TTM
$
4,599,997
$
4,601,847
$
4,527,728
$
4,484,488
$
4,544,563
$
4,606,115
Revenue by region (1)
North America
$
811,602
$
880,310
$
639,896
$
686,829
$
786,154
$
899,542
North America - YoY
3
%
(6
)%
(16
)%
(13
)%
(3
)%
2
%
North America - TTM
$
3,287,621
$
3,235,854
$
3,117,489
$
3,018,637
$
2,993,189
$
3,012,421
Europe
$
161,396
$
218,552
$
157,760
$
182,109
$
200,272
$
238,253
Europe - YoY
5
%
5
%
(3
)%
7
%
24
%
9
%
Europe - TTM
$
702,537
$
712,177
$
707,805
$
719,817
$
758,693
$
778,394
Rest of World
$
155,478
$
200,873
$
190,952
$
198,731
$
202,125
$
223,492
Rest of World - YoY
22
%
28
%
34
%
28
%
30
%
11
%
Rest of World - TTM
$
609,839
$
653,816
$
702,434
$
746,034
$
792,681
$
815,300
Operating loss
$
(435,242
)
$
(287,597
)
$
(365,264
)
$
(404,339
)
$
(380,063
)
$
(248,713
)
Operating loss - YoY
(141
)%
NM
(35
)%
(1
)%
13
%
14
%
Operating loss - Margin
(39
)%
(22
)%
(37
)%
(38
)%
(32
)%
(18
)%
Operating loss - TTM
$
(1,132,836
)
$
(1,395,306
)
$
(1,489,043
)
$
(1,492,442
)
$
(1,437,263
)
$
(1,398,379
)
Net income (loss)
$
(359,502
)
$
(288,460
)
$
(328,674
)
$
(377,308
)
$
(368,256
)
$
(248,247
)
Net income (loss) - YoY
(400
)%
NM
9
%
11
%
(2
)%
14
%
Net income (loss) - TTM
$
(1,118,643
)
$
(1,429,653
)
$
(1,398,703
)
$
(1,353,944
)
$
(1,362,698
)
$
(1,322,485
)
Adjusted EBITDA
$
72,640
$
233,275
$
813
$
(38,479
)
$
40,094
$
159,149
Adjusted EBITDA - YoY
(58
)%
(29
)%
(99
)%
(635
)%
(45
)%
(32
)%
Adjusted EBITDA - Margin (2)
6
%
18
%
0.1
%
(4
)%
3
%
12
%
Adjusted EBITDA - TTM
$
471,091
$
377,573
$
313,918
$
268,249
$
235,703
$
161,577
(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.
(2)
We define Adjusted EBITDA margin
as Adjusted EBITDA divided by GAAP revenue.
SNAP INC.
SUPPLEMENTAL FINANCIAL
INFORMATION AND BUSINESS METRICS (continued)
(dollars and shares in thousands,
except per user amounts, unaudited)
Q3 2022
Q4 2022
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Other
DAU (in millions) (1)
363
375
383
397
406
414
DAU - YoY
19
%
17
%
15
%
14
%
12
%
10
%
DAU by region (in millions)
North America
100
100
100
101
101
100
North America - YoY
4
%
3
%
3
%
2
%
1
%
—
%
Europe
88
92
93
94
95
96
Europe - YoY
11
%
12
%
10
%
9
%
7
%
4
%
Rest of World
175
183
190
202
211
218
Rest of World - YoY
34
%
31
%
27
%
25
%
21
%
19
%
ARPU
$
3.11
$
3.47
$
2.58
$
2.69
$
2.93
$
3.29
ARPU - YoY
(11
)%
(15
)%
(19
)%
(16
)%
(6
)%
(5
)%
ARPU by region
North America
$
8.13
$
8.77
$
6.37
$
6.83
$
7.82
$
8.96
North America - YoY
(1
)%
(9
)%
(18
)%
(14
)%
(4
)%
2
%
Europe
$
1.83
$
2.38
$
1.70
$
1.93
$
2.11
$
2.49
Europe - YoY
(5
)%
(6
)%
(12
)%
(2
)%
15
%
5
%
Rest of World
$
0.89
$
1.10
$
1.00
$
0.98
$
0.96
$
1.03
Rest of World - YoY
(9
)%
(2
)%
6
%
3
%
8
%
(7
)%
Employees (full-time; excludes part-time,
contractors, and temporary personnel)
5,706
5,288
5,201
5,286
5,367
5,289
Employees - YoY
10
%
(7
)%
(15
)%
(18
)%
(6
)%
—
%
Depreciation and amortization
expense
Cost of revenue
$
5,548
$
8,114
$
3,226
$
3,170
$
3,184
$
3,171
Research and development
23,722
29,834
24,139
24,847
26,252
31,040
Sales and marketing
4,586
6,130
5,073
5,605
5,466
10,017
General and administrative
2,435
4,413
2,782
6,066
6,307
8,096
Total
$
36,291
$
48,491
$
35,220
$
39,688
$
41,209
$
52,324
Depreciation and amortization expense -
YoY
12
%
39
%
(8
)%
(50
)%
14
%
8
%
Stock-based compensation
expense
Cost of revenue
$
2,745
$
4,248
$
1,885
$
2,365
$
2,640
$
2,665
Research and development
246,783
319,447
219,850
217,565
234,615
220,996
Sales and marketing
43,098
69,346
54,939
57,597
72,783
70,369
General and administrative
50,333
57,533
38,257
40,416
47,895
39,167
Total
$
342,959
$
450,574
$
314,931
$
317,943
$
357,933
$
333,197
Stock-based compensation expense - YoY
14
%
51
%
14
%
—
%
4
%
(26
)%
(1)
Numbers may not foot due to
rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240206244516/en/
Investors and Analysts: ir@snap.com
Press: press@snap.com
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