Daily Active Users increased 17% year-over-year
to 218 million
Fourth quarter revenue increased 44%
year-over-year to $561 million
Fourth quarter operating cash flow improved 47%
year-over-year to $(67) million
Snap Inc. (NYSE: SNAP) today announced financial results for the
quarter and full year ended December 31, 2019.
Financial Highlights
- Operating cash flow improved by $59 million to $(67) million in
Q4 2019, compared to the prior year.
- Free Cash Flow improved by $73 million to $(76) million in Q4
2019, compared to the prior year.
- Common shares outstanding plus shares underlying stock-based
awards totaled 1,576 million at December 31, 2019, compared to
1,507 million one year ago.
- Revenue increased 44% to $561 million in Q4 2019, compared to
the prior year.
- Net loss increased $49 million to $(241) million in Q4 2019,
compared to the prior year.
- Adjusted EBITDA improved $93 million to $42 million in Q4 2019,
compared to the prior year.
“In 2019 we saw momentum across the board. We grew our community
by 31 million daily active users, accelerated our revenue growth,
and progressed towards profitability by improving full-year
Adjusted EBITDA by 65% year-over-year,” said Evan Spiegel, CEO.
“The strength in our core business gives us confidence in our long
term growth and profitability and we’re excited to build on these
results in 2020 and beyond.”
Three Months Ended December
31,
Percent
Twelve Months Ended December
31,
Percent
2019
2018
Change
2019
2018
Change
(Unaudited)
(in thousands, except per
share amounts)
Cash used in operating activities
$
(66,842
)
$
(126,054
)
(47
)%
$
(304,958
)
$
(689,924
)
(56
)%
Free Cash Flow
$
(75,935
)
$
(148,795
)
49
%
$
(341,436
)
$
(810,166
)
58
%
Common shares outstanding plus shares
underlying stock-based awards
1,576,035
1,506,623
5
%
1,576,035
1,506,623
5
%
Operating loss
$
(253,596
)
$
(194,707
)
30
%
$
(1,103,328
)
$
(1,268,450
)
(13
)%
Revenue
$
560,888
$
389,822
44
%
$
1,715,534
$
1,180,446
45
%
Net loss(1)
$
(240,704
)
$
(191,668
)
26
%
$
(1,033,660
)
$
(1,255,911
)
(18
)%
Adjusted EBITDA
$
42,307
$
(50,363
)
184
%
$
(202,230
)
$
(575,637
)
65
%
Diluted net loss per share attributable to
common stockholders
$
(0.17
)
$
(0.14
)
21
%
$
(0.75
)
$
(0.97
)
(23
)%
Non-GAAP diluted net income (loss) per
share
$
0.03
$
(0.04
)
175
%
$
(0.16
)
$
(0.47
)
66
%
(1) Net loss for the three and twelve months ended December 31,
2019 includes $100 million of non-recurring legal charges. See page
10 for reconciliation of net loss to Adjusted EBITDA.
Q4 2019 Summary & Key Highlights
In 2019, we added 31 million Daily Active Users and saw
increased engagement across key metrics:
- DAUs were 218 million in Q4 2019, an increase of 31 million or
17% year-over-year.
- DAUs increased sequentially and year-over-year in each of North
America, Europe, and Rest of World.
- DAUs increased sequentially and year-over-year on each of iOS
and Android platforms.
We continue to invest in our Discover platform, with a
particular focus on building a sustainable content ecosystem and
increasing engagement:
- Total daily time spent by Snapchatters watching Discover
increased by 35% year-over-year in Q4 2019.
- Total daily time spent by Snapchatters over the age of 25
watching Discover increased by 60% year-over-year in Q4 2019.
- In Q4 2019, over 50 Shows reached a monthly audience of over 10
million viewers.
- We launched 78 new international Discover channels in Q4 2019,
up from 53 in Q3 2019, to bring locally relevant content to our
global community.
- Since their debut in November 2018, more than 125 million
Snapchatters have watched Bitmoji Stories, our personalized comics
starring Snapchatters and their friends.
- We introduced Bitmoji TV, a fully animated, regularly updated
cartoon series that will star users’ self-styled Bitmojis and their
friends.
We continue to invest in our camera and augmented reality
platforms:
- Over 75% of our community engages with augmented reality every
day on average.
- At the end of Q4 2019, over 735,000 Lenses had been created by
our community through Lens Studio, up from over 600,000 at the end
of Q3 2019.
- Lenses made by our community via Lens Studio now make up over
20% of the total Snaps sent every day with a Lens, with
top-performing Community Lenses reaching billions of views on
Snapchat.
- On New Year’s Eve, more than 200 million people engaged with
augmented reality on Snapchat over 13 billion times, up from 9
billion last year.
We strengthened our ad platform to drive improved outcomes
for advertisers:
- Revenue from Commercials more than tripled year-over-year in Q4
2019.
- Revenue from Story Ads doubled year-over-year in Q4 2019.
- We announced that McDonald’s and Coca-Cola are our first brand
partners to utilize our Scan camera technology, which combines
visual search and augmented reality by recognizing a logo through
the Snap camera and providing related AR experiences.
- Any brand can now create a marker Lens for free via Lens Studio
and submit it for the Snapchat community to use.
We continue to innovate to better serve our large and engaged
community:
- We launched Cameos, our new creative tool that makes
Snapchatters the star of their own videos that they can send to
friends in Chat.
- In Q4 2019, we released three new leaderboard games – Find My
Friends, Slide the Shakes, and Ready Chef Go – which allow
Snapchatters to compete against their friends for the highest
score.
- We added over 150 partner app integrations with Snap Kit in Q4
2019.
- 14 apps created by our partners are currently in the top 100
free apps of the US iOS App Store.
Financial Guidance
The following forward-looking statements reflect our
expectations for the first quarter of 2020 as of February 4, 2020,
and are subject to substantial uncertainty. This guidance assumes
constant foreign currency rates, and 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.”
Q1 2020 Outlook
- Revenue is expected to be between $450 million and $470
million, compared to $320 million in Q1 2019.
- Adjusted EBITDA is expected to be between $(90) and $(70)
million, compared to $(123) million in Q1 2019.
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 succeed in existing and new
market segments; our ability to attract and retain qualified and
key personnel; our ability to repay outstanding debt; and future
acquisitions or investments, as well as risks, uncertainties, and
other factors described in “Risk Factors” and elsewhere in our most
recent quarterly report on Form 10-Q 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 annual report on
Form 10-K for the year ended December 31, 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 December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Cash flows from operating
activities
Net loss
$
(240,704
)
$
(191,668
)
$
(1,033,660
)
$
(1,255,911
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
20,620
22,682
87,245
91,648
Stock-based compensation
166,655
121,772
686,013
538,211
Deferred income taxes
(686
)
(512
)
(491
)
(383
)
Gain on divestiture
—
—
(39,883
)
—
Amortization of debt discount and issuance
costs
11,385
—
17,797
—
Lease exit charges
—
(235
)
—
33,033
Other
(24,014
)
(224
)
(28,575
)
(903
)
Change in operating assets and
liabilities, net of effect of acquisitions:
Accounts receivable, net of allowance
(117,126
)
(93,443
)
(147,862
)
(77,506
)
Prepaid expenses and other current
assets
(4,869
)
4,653
(9,849
)
1,594
Operating lease right-of-use assets
945
—
58,199
—
Other assets
(3,371
)
1,471
1,169
21,785
Accounts payable
(7,645
)
11,106
20,674
(33,532
)
Accrued expenses and other current
liabilities
129,408
339
146,063
(14,325
)
Operating lease liabilities
2,415
—
(60,844
)
—
Other liabilities
145
(1,995
)
(954
)
6,365
Net cash used in operating activities
(66,842
)
(126,054
)
(304,958
)
(689,924
)
Cash flows from investing
activities
Purchases of property and equipment
(9,093
)
(22,741
)
(36,478
)
(120,242
)
Sales of property and equipment
—
11,276
—
11,276
Proceeds from divestiture, net
—
—
73,796
—
Cash paid for acquisitions, net of cash
acquired
(77,119
)
(815
)
(77,119
)
(815
)
Non-marketable investments
(1,731
)
(1,235
)
(5,481
)
(22,495
)
Purchases of marketable securities
(552,990
)
(335,451
)
(2,477,388
)
(1,653,918
)
Sales of marketable securities
81,742
—
184,179
45,007
Maturities of marketable securities
415,115
511,404
1,608,854
2,438,206
Other
—
—
1,029
(2,565
)
Net cash provided by (used in) investing
activities
(144,076
)
162,438
(728,608
)
694,454
Cash flows from financing
activities
Proceeds from issuance of convertible
notes, net of issuance costs
(437
)
—
1,251,411
—
Purchase of capped calls
—
—
(102,086
)
—
Proceeds from the exercise of stock
options
1,801
123
16,527
47,988
Stock repurchases from employees for tax
withholdings
—
—
—
(551
)
Net cash provided by financing
activities
1,364
123
1,165,852
47,437
Change in cash, cash equivalents, and
restricted cash
(209,554
)
36,507
132,286
51,967
Cash, cash equivalents, and restricted
cash, beginning of period
730,814
352,467
388,974
337,007
Cash, cash equivalents, and restricted
cash, end of period
$
521,260
$
388,974
$
521,260
$
388,974
Supplemental disclosures
Cash paid for income taxes, net
$
56
$
443
$
156
$
3,598
Supplemental disclosures of non-cash
activities
Net change in accounts payable and accrued
expenses and other current liabilities related to property and
equipment additions
$
951
$
(2,074
)
$
(6,027
)
$
(7,764
)
SNAP INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per share
amounts, unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Revenue
$
560,888
$
389,822
$
1,715,534
$
1,180,446
Costs and expenses:
Cost of revenue
253,439
212,948
895,838
798,865
Research and development
219,526
164,443
883,509
772,185
Sales and marketing
125,972
99,474
458,598
400,824
General and administrative
215,547
107,664
580,917
477,022
Total costs and expenses
814,484
584,529
2,818,862
2,448,896
Operating loss
(253,596
)
(194,707
)
(1,103,328
)
(1,268,450
)
Interest income
10,463
7,513
36,042
27,228
Interest expense
(14,775
)
(1,111
)
(24,994
)
(3,894
)
Other income (expense), net
17,536
(3,715
)
59,013
(8,248
)
Loss before income taxes
(240,372
)
(192,020
)
(1,033,267
)
(1,253,364
)
Income tax benefit (expense)
(332
)
353
(393
)
(2,547
)
Net loss
$
(240,704
)
$
(191,668
)
$
(1,033,660
)
$
(1,255,911
)
Net loss per share attributable to Class
A, Class B, and Class C common stockholders:
Basic
$
(0.17
)
$
(0.14
)
$
(0.75
)
$
(0.97
)
Diluted
$
(0.17
)
$
(0.14
)
$
(0.75
)
$
(0.97
)
Weighted average shares used in
computation of net loss per share:
Basic
1,409,519
1,324,858
1,375,462
1,300,568
Diluted
1,409,519
1,324,858
1,375,462
1,300,568
SNAP INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
value)
December 31,
2019
September 30,
2019
December 31, 2018
(unaudited)
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
520,317
$
728,828
$
387,149
Marketable securities
1,592,488
1,531,902
891,914
Accounts receivable, net of allowance
492,194
374,090
354,965
Prepaid expenses and other current
assets
38,987
42,243
41,900
Total current assets
2,643,986
2,677,063
1,675,928
Property and equipment, net
173,667
177,073
212,560
Operating lease right-of-use assets
275,447
250,225
—
Intangible assets, net
92,121
72,371
126,054
Goodwill
761,153
621,758
632,370
Other assets
65,550
65,882
67,194
Total assets
$
4,011,924
$
3,864,372
$
2,714,106
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable
$
46,886
$
56,572
$
30,876
Operating lease liabilities
42,179
49,725
—
Accrued expenses and other current
liabilities
410,610
262,766
261,815
Total current liabilities
499,675
369,063
292,691
Convertible senior notes, net
891,776
880,391
—
Operating lease liabilities,
noncurrent
303,178
284,798
—
Other liabilities
57,382
5,705
110,416
Total liabilities
1,752,011
1,539,957
403,107
Commitments and contingencies
Stockholders’ equity
Class A non-voting common stock, $0.00001
par value. 3,000,000 shares authorized, 1,160,127, 1,132,915, and
999,304 shares issued and outstanding at December 31, 2019,
September 30, 2019, and December 31, 2018, respectively.
12
11
10
Class B voting common stock, $0.00001 par
value. 700,000 shares authorized, 24,522, 32,057, and 93,845 shares
issued and outstanding at December 31, 2019, September 30, 2019,
and December 31, 2018, respectively.
—
—
1
Class C voting common stock, $0.00001 par
value. 260,888 shares authorized, 231,147, 229,564, and 224,611
shares issued and outstanding at December 31, 2019, September 30,
2019, and December 31, 2018, respectively.
2
2
2
Additional paid-in capital
9,205,256
9,036,801
8,220,417
Accumulated other comprehensive income
573
(7,173
)
3,147
Accumulated deficit
(6,945,930
)
(6,705,226
)
(5,912,578
)
Total stockholders’ equity
2,259,913
2,324,415
2,310,999
Total liabilities and stockholders’
equity
$
4,011,924
$
3,864,372
$
2,714,106
SNAP INC.
RECONCILIATION OF GAAP TO
NON-GAAP FINANCIAL MEASURES
(in thousands, unaudited)
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Free Cash Flow reconciliation:
Net cash used in operating activities
$
(66,842
)
$
(126,054
)
$
(304,958
)
$
(689,924
)
Less:
Purchases of property and equipment
(9,093
)
(22,741
)
(36,478
)
(120,242
)
Free Cash Flow
$
(75,935
)
$
(148,795
)
$
(341,436
)
$
(810,166
)
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Adjusted EBITDA reconciliation:
Net loss
$
(240,704
)
$
(191,668
)
$
(1,033,660
)
$
(1,255,911
)
Add (deduct):
—
—
Interest income
(10,463
)
(7,513
)
(36,042
)
(27,228
)
Interest expense
14,775
1,111
24,994
3,894
Other (income) expense, net
(17,536
)
3,715
(59,013
)
8,248
Income tax (benefit) expense
332
(352
)
393
2,547
Depreciation and amortization
20,620
22,682
87,245
91,648
Stock-based compensation expense
166,655
121,772
686,013
538,211
Payroll tax expense related to stock-based
compensation
8,628
2,015
27,840
21,927
Securities class actions legal
charges(1)
100,000
—
100,000
—
Lease exit charges(2)
—
(2,125
)
—
31,143
Reduction in force charges(3)
—
—
—
9,884
Adjusted EBITDA
$
42,307
$
(50,363
)
$
(202,230
)
$
(575,637
)
(1) Securities class actions legal charges in the fourth quarter
of 2019 were related to a preliminary agreement to settle the
securities class actions that arose following our IPO. The
preliminary settlement agreement was signed in January 2020 and
provided for a resolution of all of the pending claims in the
shareholder class actions for $187.5 million. We recorded legal
settlement expense, net of amounts directly covered by insurance,
of $100.0 million. These charges are non-recurring and not
reflective of underlying trends in our business.
(2) We exited 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.
In the year ended December 31, 2018, we recorded lease exit charges
of $33.0 million. The charges primarily included the present value
of our remaining lease obligation on the cease use dates that
occurred during the quarter, net of estimated sublease income. As
of December 31, 2018, we have exited all properties associated with
this event. Changes to our estimated sublease income, including
actual contracted sublease income, may result in incremental lease
exit charge activity in the period determined. Additionally, we
recognized a gain on the sale of buildings sold as a result of
moving to our centralized corporate office, which is included in
lease exit charges above for the year ended December 31, 2018.
These charges are non-recurring and not reflective of underlying
trends in our business.
(3) Reduction in force charges in the first quarter of 2018 were
related to a reduction in force plan impacting approximately 7% of
our 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.
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 December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Depreciation and amortization expense:
Cost of revenue
$
4,903
$
9,888
$
21,271
$
26,282
Research and development
8,738
4,547
33,208
33,001
Sales and marketing
3,087
3,475
13,256
15,089
General and administrative
3,892
4,772
19,510
17,276
Total
$
20,620
$
22,682
$
87,245
$
91,648
Total stock-based compensation expense by function:
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Stock-based compensation expense:
Cost of revenue
$
1,398
$
1,283
$
6,365
$
4,393
Research and development
111,611
75,086
464,639
340,533
Sales and marketing
25,788
20,795
93,355
84,059
General and administrative
27,858
24,608
121,654
109,226
Total
$
166,655
$
121,772
$
686,013
$
538,211
Three Months Ended December
31,
Twelve Months Ended December
31,
2019
2018
2019
2018
Non-GAAP net income (loss)
reconciliation:
Net loss
$
(240,704
)
$
(191,668
)
$
(1,033,660
)
$
(1,255,911
)
Amortization of intangible assets
7,067
10,441
33,399
42,629
Stock-based compensation expense
166,655
121,772
686,013
538,211
Payroll tax expense related to stock-based
compensation
8,628
2,015
27,840
21,927
Securities class actions legal charges
100,000
—
100,000
—
Gain on divestiture
—
—
(39,883
)
—
Lease exit charges
—
(2,125
)
—
31,143
Reduction in force charges
—
—
—
9,884
Income tax adjustments
289
84
750
(288
)
Non-GAAP net income (loss)
$
41,935
$
(59,481
)
$
(225,541
)
$
(612,405
)
Weighted-average common shares -
Diluted
1,409,519
1,324,858
1,375,462
1,300,568
Non-GAAP diluted net income (loss) per
share reconciliation:
Diluted net loss per share
$
(0.17
)
$
(0.14
)
$
(0.75
)
$
(0.97
)
Non-GAAP adjustment to net loss
0.20
0.10
0.59
0.50
Non-GAAP diluted net income (loss) per
share
$
0.03
$
(0.04
)
$
(0.16
)
$
(0.47
)
SNAP INC.
SUPPLEMENTAL FINANCIAL
INFORMATION AND BUSINESS METRICS
(dollars and shares in thousands,
except as noted below, unaudited)
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Cash Flows and Shares
Net cash used in operating activities
$
(132,543
)
$
(126,054
)
$
(66,178
)
$
(95,789
)
$
(76,149
)
$
(66,842
)
Net cash used in operating activities -
YoY (year-over-year)
(32
)%
(28
)%
(71
)%
(52
)%
(43
)%
(47
)%
Net cash used in operating activities -
TTM (trailing twelve months)
$
(739,953
)
$
(689,924
)
$
(524,121
)
$
(420,564
)
$
(364,170
)
$
(304,958
)
Purchases of property and equipment
$
(26,285
)
$
(22,741
)
$
(11,814
)
$
(7,633
)
$
(7,938
)
$
(9,093
)
Purchases of property and equipment -
YoY
1
%
7
%
(67
)%
(78
)%
(70
)%
(60
)%
Purchases of property and equipment -
TTM
$
(118,713
)
$
(120,242
)
$
(95,741
)
$
(68,473
)
$
(50,126
)
$
(36,478
)
Free Cash Flow
$
(158,828
)
$
(148,795
)
$
(77,992
)
$
(103,422
)
$
(84,087
)
$
(75,935
)
Free Cash Flow - YoY
28
%
25
%
71
%
56
%
47
%
49
%
Free Cash Flow - TTM
$
(858,666
)
$
(810,166
)
$
(619,862
)
$
(489,037
)
$
(414,296
)
$
(341,436
)
Common shares outstanding
1,291,217
1,317,760
1,334,931
1,372,149
1,389,395
1,415,796
Common shares outstanding - YoY
7
%
8
%
6
%
8
%
8
%
7
%
Shares underlying stock-based awards
184,802
188,863
209,055
180,585
175,813
160,239
Shares underlying stock-based awards -
YoY
(23
)%
(18
)%
3
%
(12
)%
(5
)%
(15
)%
Total common shares outstanding plus
shares underlying stock-based awards
1,476,019
1,506,623
1,543,986
1,552,734
1,565,208
1,576,035
Total common shares outstanding plus
shares underlying stock-based awards - YoY
2
%
4
%
6
%
5
%
6
%
5
%
Results of Operations
Revenue
$
297,695
$
389,822
$
320,426
$
388,021
$
446,199
$
560,888
Revenue - YoY
43
%
36
%
39
%
48
%
50
%
44
%
Revenue - TTM
$
1,076,317
$
1,180,446
$
1,270,206
$
1,395,964
$
1,544,468
$
1,715,534
Revenue by region(1)
North America
$
207,477
$
268,858
$
225,705
$
260,017
$
316,028
$
382,025
North America - YoY
24
%
23
%
32
%
47
%
52
%
42
%
North America - TTM
$
774,769
$
824,233
$
879,450
$
962,057
$
1,070,608
$
1,183,775
Europe
$
50,478
$
62,470
$
47,448
$
60,633
$
68,553
$
91,873
Europe - YoY
85
%
56
%
45
%
51
%
36
%
47
%
Europe - TTM
$
163,416
$
185,910
$
200,637
$
221,029
$
239,104
$
268,507
Rest of World
$
39,740
$
58,495
$
47,273
$
67,374
$
61,618
$
86,987
Rest of World - YoY
197
%
122
%
72
%
51
%
55
%
49
%
Rest of World - TTM
$
138,133
$
170,305
$
190,120
$
212,882
$
234,760
$
263,252
Operating loss
$
(323,371
)
$
(194,707
)
$
(316,061
)
$
(304,818
)
$
(228,853
)
$
(253,596
)
Operating loss - YoY
30
%
46
%
19
%
15
%
29
%
(30
)%
Operating loss - Margin
(109
)%
(50
)%
(99
)%
(79
)%
(51
)%
(45
)%
Operating loss - TTM
$
(1,434,707
)
$
(1,268,450
)
$
(1,191,981
)
$
(1,138,957
)
$
(1,044,439
)
$
(1,103,328
)
Net loss
$
(325,148
)
$
(191,668
)
$
(310,407
)
$
(255,174
)
$
(227,375
)
$
(240,704
)
Net loss - YoY
(27
)%
(45
)%
(20
)%
(28
)%
(30
)%
26
%
Net loss - TTM
$
(1,414,220
)
$
(1,255,911
)
$
(1,180,533
)
$
(1,082,397
)
$
(984,624
)
$
(1,033,660
)
Adjusted EBITDA
$
(138,377
)
(50,363
)
(123,449
)
(78,713
)
(42,375
)
42,307
Adjusted EBITDA - YoY
23
%
68
%
43
%
53
%
69
%
184
%
Adjusted EBITDA - Margin(2)
(46
)%
(13
)%
(39
)%
(20
)%
(9
)%
8
%
Adjusted EBITDA - TTM
$
(684,198
)
$
(575,637
)
$
(481,221
)
$
(390,902
)
$
(294,900
)
$
(202,230
)
(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 as noted below, unaudited)
Q3 2018
Q4 2018
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Other
DAU (in millions)
186
186
190
203
210
218
DAU - YoY
5
%
(0
)%
(0
)%
8
%
13
%
17
%
DAU by region (in millions)
North America
79
79
80
83
84
86
North America - YoY
3
%
(1
)%
(1
)%
3
%
6
%
9
%
Europe
59
60
61
64
65
67
Europe - YoY
4
%
(1
)%
(2
)%
5
%
9
%
12
%
Rest of World
47
47
49
56
61
64
Rest of World - YoY
8
%
1
%
2
%
21
%
28
%
36
%
ARPU
$
1.60
$
2.09
$
1.68
$
1.91
$
2.12
$
2.58
ARPU - YoY
37
%
37
%
39
%
37
%
33
%
23
%
ARPU by region
North America
$
2.62
$
3.38
$
2.81
$
3.14
$
3.75
$
4.42
North America - YoY
20
%
23
%
34
%
42
%
43
%
31
%
Europe
$
0.85
$
1.04
$
0.77
$
0.95
$
1.05
$
1.37
Europe - YoY
78
%
57
%
47
%
43
%
24
%
31
%
Rest of World
$
0.84
$
1.24
$
0.97
$
1.20
$
1.01
$
1.35
Rest of World - YoY
175
%
120
%
68
%
25
%
21
%
9
%
Employees (full-time; excludes part-time,
contractors, and temporary personnel)
2,903
2,884
2,818
2,734
2,908
3,195
Employees - YoY
(2
)%
(6
)%
(6
)%
(5
)%
0
%
11
%
Depreciation and amortization
expense
Cost of revenue
$
5,582
$
9,888
$
6,146
$
5,642
$
4,580
$
4,903
Research and development
10,174
4,547
8,650
7,188
8,632
8,738
Sales and marketing
4,054
3,475
4,015
3,045
3,109
3,087
General and administrative
5,088
4,772
4,508
6,785
4,325
3,892
Total
$
24,898
$
22,682
$
23,319
$
22,660
$
20,646
$
20,620
Depreciation and amortization expense -
YoY
43
%
21
%
8
%
1
%
(17
)%
(9
)%
Stock-based compensation
expense
Cost of revenue
$
1,368
$
1,283
$
1,849
$
1,786
$
1,332
$
1,398
Research and development
95,329
75,086
112,242
132,610
108,176
111,611
Sales and marketing
25,082
20,795
17,760
26,474
23,333
25,788
General and administrative
5,030
24,608
30,705
34,704
28,387
27,858
Total
$
126,809
$
121,772
$
162,556
$
195,574
$
161,228
$
166,655
Stock-based compensation expense - YoY
(43
)%
(33
)%
22
%
25
%
27
%
37
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200204005999/en/
Investors and Analysts: ir@snap.com
Press: press@snap.com
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