Fourth quarter revenue increased 36% to a
record $390 million
Full year revenue increased 43% to $1.2
billion
Daily Active Users were flat sequentially at
186 million
Snap Inc. (NYSE: SNAP) today announced financial results for the
quarter and full year ended December 31, 2018.
Financial Highlights
- Operating cash flow improved by $50
million to $(126) million in Q4 2018, compared to the prior
year.
- Free Cash Flow improved by $49 million
to $(149) million in Q4 2018, compared to the prior year.
- Common shares outstanding plus shares
underlying stock-based awards totaled 1,507 million at December 31,
2018, compared with 1,453 million one year ago.
- Revenue increased 36% to a record $390
million in Q4 2018, compared to the prior year.
- Operating loss improved $166 million to
$(195) million in Q4 2018, compared to the prior year.
- Net loss improved $158 million to
$(192) million in Q4 2018, compared to the prior year.
- Adjusted EBITDA loss improved $109
million to $(50) million in Q4 2018, compared to the prior
year.
“In 2018, we focused on building a foundation to scale the
business over the long-term by driving sustainable product
innovation, scaling our advertising platform, and hiring the
leadership team that will help us achieve our future goals,” said
Evan Spiegel, CEO. “We ended the year with user engagement
stabilizing and have started rolling out the new version of our
Android application to a small percentage of our community. We are
substantially closer to achieving profitability, as we have
maintained a relatively flat cost structure across the past five
quarters while growing full-year revenue 43 percent
year-over-year.”
Three Months Ended
December 31,
Percent Year Ended December 31,
Percent 2017 2018
Change 2017
2018 Change (Unaudited)
(dollars and shares
in thousands, except per share amounts) Cash used in
operating activities $ (176,083 ) $ (126,054 ) (28 )% $ (734,667 )
$ (689,924 ) (6 )% Free Cash Flow $ (197,295 ) $ (148,795 ) 25 % $
(819,185 ) $ (810,166 ) 1 % Common shares outstanding plus shares
underlying stock-based awards 1,453,004 1,506,623 4 % 1,453,004
1,506,623 4 % Operating loss $ (360,964 ) $ (194,707 ) (46 )% $
(3,485,576 ) $ (1,268,450 ) (64 )% Revenue $ 285,693 $ 389,822 36 %
$ 824,949 $ 1,180,446 43 % Net loss $ (349,977 ) $ (191,668 ) (45
)% $ (3,445,066 ) $ (1,255,911 ) (64 )% Adjusted EBITDA $ (158,922
) $ (50,363 ) 68 % $ (720,056 ) $ (575,637 ) 20 % Diluted net loss
per share attributable to common stockholders $ (0.28 ) $ (0.14 )
(48 )% $ (2.95 ) $ (0.97 ) (67 )% Non-GAAP diluted net loss per
share $ (0.13 ) $ (0.04 ) (65 )% $ (0.61 ) $ (0.47 ) (23 )%
Q4 2018 Summary & Key Highlights
We ended the year stabilizing Daily Active Users and
enhancing engagement across key metrics:
- DAUs were 186 million in Q4 2018,
compared to 187 million in Q4 2017 and 186 million in Q3 2018.
- In Q4 2018, our iOS DAU increased both
quarter-over-quarter and year-over-year, and average time spent on
iOS grew faster during Q4 2018 than during Q4 2017.
- We reached over 70% of the total 13- to
34-year-old U.S. population with premium mobile video ads on a
monthly basis.
- On average, over 70% of users played
with or viewed a Lens every day. Users played with or viewed Lenses
700 million times on New Year’s Eve, up nearly 40%
year-over-year.
Our commitment to providing high-quality, made-for-mobile
video experiences across the Snapchat platform is yielding positive
results:
- 30% more people are now watching
Publisher Stories and Shows every day compared to last year, and
each person is consuming more of these Stories per day on
average.
- In Q4 2018, more than 60% of ESPN’s
“SportsCenter” audience tuned in three or more times per week.
- “Dead Girls Detective Agency,” a new
Snap Original Show produced by our joint venture with NBCUniversal,
reached more than 14 million unique viewers, and over 40% of the
users that completed the first episode went on to watch the entire
season.
- Bitmoji Stories, a new cartoon starring
Snapchatters and their friends, reached over 40 million viewers in
December.
- NBC News announced that two thirds of
the 25 to 35 million Snapchatters watching its Stay Tuned show
represented a net new audience for them.
We strengthened our international content offerings:
- We increased the breadth and depth of
our content across international markets including France, Germany,
Ireland, Norway, the UK, India, and the Middle East.
- We saw success with localized partners
such as Filter Copy in India and Layalina in the Middle East to
reach audiences drawn to local, culturally relevant content.
We drove continued product innovation:
- We began to roll out our new Android
application and early test results are promising, especially on
less performant devices, including a 20% reduction in the average
time it takes to open Snapchat.
- We expanded our augmented reality
platform and launched Snap Camera, which lets people use their
favorite Lenses when creating or streaming video on desktop and
laptop computers.
- By the end of 2018, over 300,000 Lenses
had been created by our community through Lens Studio, and those
Lenses were viewed over 35 billion times.
- We launched Lens Challenges, where
users can participate in challenges in Lens Explorer by creating a
Snap with a Lens that is themed to a particular song, dance,
holiday, or event.
- We introduced Friendship Profiles, a
collection of images, videos, messages, links, and more that users
and friends have saved in Chat. Friendship Profiles make it easy to
find favorite Memories and the important things that are saved over
time in one place.
We created new products which drove greater
monetization:
- Commercials, our 6-second non-skippable
video ad, continued to perform well. The majority was transacted
via our Premium Content Targeting tool, a part of our Self-Serve
Platform for large brands and agencies.
- Collection Ads, which enable a business
to showcase four products in a single Snap, drove over twice the
return on ad spend versus our comparable formats in Q4 2018.
- We launched Product Catalogs, which
offer a simple, scalable way for eCommerce businesses to use their
websites to create Snap Ads.
- The Snap Pixel continued to see growth
with over 600 million purchase events in Q4 2018 up from 230
million in Q3 2018.
- We made improvements to machine
learning models for app installs and lower-funnel bidding events,
which contributed to higher always-on revenue, showing that our
commitment to performance advertisers is paying off.
We brought together an experienced leadership team to lead us
through the next important chapter of Snap:
- We welcomed several talented and
experienced leaders from some of the world’s leading tech and media
companies, including Jared Grusd, our Chief Strategy Officer, and
Jeremi Gorman, our Chief Business Officer. Julie Henderson will be
joining us shortly as our Chief Communications Officer.
Financial Guidance
The following forward-looking statements reflect our
expectations for the first quarter of 2019 as of February 5, 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.”
Q1 2019 Outlook
- Revenue is expected to be between $285
million and $310 million, or grow between 24% and 34% compared to
Q1 2018.
- Adjusted EBITDA is expected to be
between $(165) million and $(140) million, compared to $(218)
million in Q1 2018.
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.
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 most recent 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,
2018 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,
2017 2018
2017 2018 Cash flows
from operating activities Net loss $ (349,977 ) $ (191,668 ) $
(3,445,066 ) $ (1,255,911 ) Adjustments to reconcile net loss to
net cash used in operating activities: Depreciation and
amortization 18,786 22,682 61,288 91,648 Stock-based compensation
181,044 121,772 2,639,895 538,211 Deferred income taxes (3,093 )
(512 ) (17,490 ) (383 ) Excess inventory reserve and related asset
impairment — — 21,997 — Lease exit charges — (235 ) — 33,033 Other
(2,642 ) (224 ) (6,356 ) (903 ) Change in operating assets and
liabilities, net of effect of acquisitions: Accounts receivable,
net of allowance (79,844 ) (93,443 ) (104,357 ) (77,506 ) Prepaid
expenses and other current assets 9,182 4,653 (39,783 ) 1,594 Other
assets 3,774 1,471 (4,771 ) 21,785 Accounts payable 45,593 11,106
49,696 (33,532 ) Accrued expenses and other current liabilities
(2,461 ) 339 100,988 (14,325 ) Other liabilities 3,555
(1,995 ) 9,292 6,365 Net
cash used in operating activities (176,083 ) (126,054
) (734,667 ) (689,924 )
Cash flows from investing
activities Purchases of property and equipment (21,212 )
(22,741 ) (84,518 ) (120,242 ) Sales of property and equipment —
11,276 — 11,276 Purchases of intangible assets (82 ) — (8,107 )
(2,565 ) Non-marketable investments (2,500 ) (1,235 ) (10,030 )
(22,495 ) Cash paid for acquisitions, net of cash acquired (33,604
) (815 ) (386,011 ) (815 ) Purchases of marketable securities
(449,861 ) (335,451 ) (3,862,637 ) (1,653,918 ) Sales of marketable
securities 69,979 — 511,068 45,007 Maturities of marketable
securities 651,898 511,404
2,483,225 2,438,206 Net cash provided by (used
in) investing activities 214,618 162,438
(1,357,010 ) 694,454
Cash flows from
financing activities Proceeds from the exercise of stock
options 4,524 123 11,379 47,988 Stock repurchases from employees
for tax withholdings (26,922 ) — (394,156 ) (551 ) Proceeds from
issuance of Class A common stock in initial public offering, net of
underwriting commissions — — 2,657,797 — Payments of initial public
offering issuance costs — —
(9,672 ) — Net cash provided by (used in) financing
activities (22,398 ) 123 2,265,348
47,437 Change in cash, cash equivalents, and
restricted cash 16,137 36,507 173,671 51,967 Cash, cash
equivalents, and restricted cash, beginning of period
320,870 352,467 163,336
337,007 Cash, cash equivalents, and restricted cash, end of
period $ 337,007 $ 388,974 $ 337,007 $ 388,974
Supplemental disclosures Cash paid for income taxes $
789 $ 443 $ 6,226 $ 3,598
Supplemental disclosures of non-cash
activities Assumed equity awards in acquisitions $ — $ — $
3,911 $ — Purchase consideration liabilities related to
acquisitions $ 4,714 $ — $ 16,486 $ — Recognition of leased
facility asset and lease financing obligation $ 344 $ 443 $ 1,451 $
1,735 Net change in accounts payable and accrued expenses and other
current liabilities related to property and equipment additions $
17,294 $ (2,074 ) $ 13,139 $ (7,764 )
SNAP INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts,
unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2017 2018
2017 2018 Revenue
$ 285,693 $ 389,822 $ 824,949 $ 1,180,446 Costs and expenses: Cost
of revenue 191,246 212,948 717,462 798,865 Research and development
233,838 164,443 1,534,863 772,185 Sales and marketing 110,458
99,474 522,605 400,824 General and administrative 111,115
107,664 1,535,595 477,022
Total costs and expenses 646,657
584,529 4,310,525 2,448,896
Operating loss (360,964 ) (194,707 ) (3,485,576 ) (1,268,450 )
Interest income 6,070 7,513 21,096 27,228 Interest expense (876 )
(1,111 ) (3,456 ) (3,894 ) Other income (expense), net 2,553
(3,715 ) 4,528 (8,248 ) Loss
before income taxes (353,217 ) (192,020 ) (3,463,408 ) (1,253,364 )
Income tax benefit (expense) 3,240 352
18,342 (2,547 ) Net loss $ (349,977 ) $
(191,668 ) $ (3,445,066 ) $ (1,255,911 ) Net loss per share
attributable to Class A, Class B, and Class C common stockholders:
Basic $ (0.28 ) $ (0.14 ) $ (2.95 ) $ (0.97 ) Diluted $ (0.28 ) $
(0.14 ) $ (2.95 ) $ (0.97 ) Weighted average shares used in
computation of net loss per share: Basic 1,247,017
1,324,858 1,166,085 1,300,568
Diluted 1,247,017 1,324,858
1,166,085 1,300,568
SNAP
INC. CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
December 31,
2017
September 30,
2018
December 31,
2018
(unaudited) (unaudited) Assets Current assets
Cash and cash equivalents $ 334,063 $ 350,398 $ 387,149 Marketable
securities 1,708,976 1,064,009 891,914 Accounts receivable, net of
allowance 279,473 261,833 354,965 Prepaid expenses and other
current assets 44,282 48,887
41,900 Total current assets 2,366,794 1,725,127 1,675,928
Property and equipment, net 166,762 216,609 212,560 Intangible
assets, net 166,473 136,473 126,054 Goodwill 639,882 634,186
632,370 Other assets 81,655 71,381
67,194 Total assets $ 3,421,566 $ 2,783,776
$ 2,714,106
Liabilities and Stockholders’
Equity Current liabilities Accounts payable $ 71,194 $ 20,175 $
30,876 Accrued expenses and other current liabilities
275,062 265,345 261,815 Total
current liabilities 346,256 285,520 292,691 Other liabilities
82,983 114,164 110,416
Total liabilities 429,239 399,684
403,107 Commitments and contingencies Stockholders’
equity Class A non-voting common stock, $0.00001 par value.
3,000,000 shares authorized, 883,022, 976,066, and 999,304 shares
issued and outstanding at December 31, 2017, September 30, 2018,
and December 31, 2018, respectively. 9 10 10 Class B voting common
stock, $0.00001 par value. 700,000 shares authorized, 122,564,
93,660, and 93,845 shares issued and outstanding at December 31,
2017, September 30, 2018, and December 31, 2018, respectively. 1 1
1 Class C voting common stock, $0.00001 par value. 260,888 shares
authorized, 216,616, 221,491, and 224,611 shares issued and
outstanding at December 31, 2017, September 30, 2018, and December
31, 2018, respectively 2 2 2 Additional paid-in capital 7,634,825
8,098,519 8,220,417 Accumulated other comprehensive income 14,157
6,470 3,147 Accumulated deficit (4,656,667 )
(5,720,910 ) (5,912,578 ) Total stockholders’ equity
2,992,327 2,384,092 2,310,999
Total liabilities and stockholders’ equity $ 3,421,566 $
2,783,776 $ 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,
2017 2018
2017 2018 Free Cash
Flow reconciliation: Net cash used in operating activities $
(176,083 ) $ (126,054 ) $ (734,667 ) $ (689,924 ) Less: Purchases
of property and equipment (21,212 ) (22,741 )
(84,518 ) (120,242 ) Free Cash Flow $ (197,295 ) $ (148,795
) $ (819,185 ) $ (810,166 )
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2017 2018
2017
2018
Adjusted EBITDA reconciliation: Net loss $ (349,977 )
$ (191,668 ) $ (3,445,066 ) $ (1,255,911 ) Add (deduct): — Interest
income (6,070 ) (7,513 ) (21,096 ) (27,228 ) Interest expense 876
1,111 3,456 3,894 Other (income) expense, net (2,553 ) 3,715 (4,528
) 8,248 Income tax (benefit) expense (3,240 ) (352 ) (18,342 )
2,547 Depreciation and amortization 18,786 22,682 61,288 91,648
Stock-based compensation expense 181,044 121,772 2,639,895 538,211
Payroll tax expense related to stock-based compensation 2,212 2,015
24,470 21,927 Spectacles inventory-related charges(1) — — 39,867 —
Reduction in force charges(2) — — — 9,884 Lease exit charges(3)
— (2,125 ) — 31,143
Adjusted EBITDA $ (158,922 ) $ (50,363 ) $ (720,056 ) $
(575,637 ) (1) Spectacles inventory-related charges
in the third quarter of 2017 were primarily related to excess
inventory reserves and inventory purchase commitment cancellation
charges. These charges are non-recurring and not reflective of
underlying trends in our business. (2) 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. (3)
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 three months and year ended December 31, 2018, we recorded
lease exit charges of $(0.2) million and $33.0 million,
respectively. 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 three months and year ended
December 31, 2018. 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
December 31,
Twelve Months Ended
December 31,
2017 2018
2017 2018 Depreciation
and amortization expense: Cost of revenue $ 5,179 $ 9,888 $ 15,222
$ 26,282 Research and development 6,937 4,547 25,076 33,001 Sales
and marketing 3,441 3,475 10,450 15,089 General and administrative
3,229 4,772 10,540
17,276 Total $ 18,786 $ 22,682 $ 61,288
$ 91,648
Total stock-based compensation expense by
function:
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2017 2018
2017 2018 Stock-based
compensation expense: Cost of revenue $ 2,189 $ 1,283 $ 26,071 $
4,393 Research and development 129,199 75,086 1,154,430 340,533
Sales and marketing 28,936 20,795 236,474 84,059 General and
administrative 20,720 24,608
1,222,920 109,226 Total $ 181,044 $
121,772 $ 2,639,895 $ 538,211
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2017 2018
2017 2018 Non-GAAP net loss
reconciliation: Net loss $ (349,977 ) $ (191,668 ) $ (3,445,066
) $ (1,255,911 ) Amortization of intangible assets 10,607 10,441
31,454 42,629 Stock-based compensation expense 181,044 121,772
2,639,895 538,211 Payroll tax expense related to stock-based
compensation 2,212 2,015 24,470 21,927 Spectacles inventory-related
charges — — 39,867 — Reduction in force charges — — — 9,884 Lease
exit charges — (2,125 ) — 31,143 Income tax adjustments 60
84 (2,253 ) (288 ) Non-GAAP net
loss $ (156,054 ) $ (59,481 ) $ (711,633 ) $ (612,405 )
Weighted-average common shares - Diluted 1,247,017 1,324,858
1,166,085 1,300,568
Non-GAAP diluted net loss per share
reconciliation: Diluted net loss per share $ (0.28 ) $ (0.14 )
$ (2.95 ) $ (0.97 ) Non-GAAP adjustment to net loss 0.15
0.10 $ 2.34 $ 0.50 Non-GAAP
diluted net loss per share $ (0.13 ) $ (0.04 ) $ (0.61 ) $ (0.47 )
SNAP INC. SUPPLEMENTAL FINANCIAL INFORMATION AND
BUSINESS METRICS
(dollars and shares in thousands, except
as noted below, unaudited)
Q3 2017 Q4 2017 Q1
2018 Q2 2018 Q3 2018 Q4
2018 Cash Flows and Shares Net cash used in operating
activities $ (194,013 ) $ (176,083 ) $ (231,981 ) $ (199,346 ) $
(132,543 ) $ (126,054 ) Net cash used in operating activities - YoY
(year-over-year) 11 % (5 )% (50 )% 5 % 32 % 28 % Net cash used in
operating activities - TTM (trailing twelve months) $ (726,312 ) $
(734,667 ) $ (811,651 ) $ (801,423 ) $ (739,953 ) $ (689,924 )
Purchases of property and equipment $ (25,948 ) $ (21,212 ) $
(36,315 ) $ (34,901 ) $ (26,285 ) $ (22,741 ) Purchases of property
and equipment - YoY 51 % 4 % 102 % 80 % 1 % 7 % Purchases of
property and equipment - TTM $ (83,682 ) $ (84,518 ) $ (102,840 ) $
(118,376 ) $ (118,713 ) $ (120,242 ) Free Cash Flow $ (219,961 ) $
(197,295 ) $ (268,296 ) $ (234,247 ) $ (158,828 ) $ (148,795 ) Free
Cash Flow - YoY 6 % (5 )% (55 )% (2 )% 28 % 25 % Free Cash Flow -
TTM $ (809,994 ) $ (819,185 ) $ (914,491 ) $ (919,799 ) $ (858,666
) $ (810,166 ) Common shares outstanding 1,201,736 1,222,202
1,254,439 1,273,163 1,291,217 1,317,760 Common shares outstanding -
YoY NM NM 6 % 8 % 7 % 8 % Shares underlying stock-based awards
239,564 230,802 202,175 205,595 184,802 188,863 Shares underlying
stock-based awards - YoY NM NM (20 )% (19 )% (23 )% (18 )% Total
common shares outstanding plus shares underlying stock-based awards
1,441,300 1,453,004 1,456,613 1,478,758 1,476,019 1,506,623 Total
common shares outstanding plus shares underlying stock-based awards
- YoY NM NM 2 % 3 % 2 % 4 %
Results of Operations
Revenue $ 207,937 $ 285,693 $ 230,666 $ 262,263 $ 297,695 $ 389,822
Revenue - YoY 62 % 72 % 54 % 44 % 43 % 36 % Revenue - TTM $ 704,938
$ 824,949 $ 905,967 $ 986,559 $ 1,076,317 $ 1,180,446 Revenue by
region(1) North America $ 167,306 $ 219,394 $ 170,488 $ 177,410 $
207,477 $ 268,858 North America - YoY 46 % 51 % 32 % 20 % 24 % 23 %
North America - TTM $ 589,018 $ 663,057 $ 704,827 $ 734,599 $
774,769 $ 824,233 Europe $ 27,262 $ 39,976 $ 32,721 $ 40,241 $
50,478 $ 62,470 Europe - YoY 131 % 173 % 150 % 82 % 85 % 56 %
Europe - TTM $ 77,081 $ 102,392 $ 122,011 $ 140,200 $ 163,416 $
185,910 Rest of World $ 13,368 $ 26,323 $ 27,458 $ 44,612 $ 39,740
$ 58,495 Rest of World - YoY NM NM 251 % 272 % 197 % 122 % Rest of
World - TTM $ 38,839 $ 59,501 $ 79,130 $ 111,761 $ 138,133 $
170,305 Operating loss $ (461,827 ) $ (360,964 ) $ (392,530 ) $
(357,842 ) $ (323,371 ) $ (194,707 ) Operating loss - YoY (253 )%
(113 )% 82 % 20 % 30 % 46 % Operating loss - Margin (222 )% (126 )%
(170 )% (136 )% (109 )% (50 )% Operating loss - TTM $ (3,294,349 )
$ (3,485,576 ) $ (1,664,339 ) $ (1,573,163 ) $ (1,434,707 ) $
(1,268,450 ) Net loss $ (443,159 ) $ (349,977 ) $ (385,785 ) $
(353,310 ) $ (325,148 ) $ (191,668 ) Net loss - YoY 257 % 106 % (83
)% (20 )% (27 )% (45 )% Net loss - TTM $ (3,265,034 ) $ (3,445,066
) $ (1,622,014 ) $ (1,532,231 ) $ (1,414,220 ) $ (1,255,911 )
Adjusted EBITDA $ (178,901 ) $ (158,922 ) $ (217,867 ) $ (169,032 )
$ (138,377 ) (50,363 ) Adjusted EBITDA - YoY (65 )% (4 )% (16 )% 13
% 23 % 68 % Adjusted EBITDA - Margin (86 )% (56 )% (94 )% (64 )%
(46 )% (13 )% Adjusted EBITDA - TTM $ (713,418 ) $ (720,056 ) $
(749,680 ) $ (724,722 ) $ (684,198 ) $ (575,637 ) (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)
Q3 2017 Q4 2017 Q1
2018 Q2 2018 Q3 2018 Q4
2018 Other DAU (in millions) 178 187 191 188 186 186 DAU
- YoY 17 % 18 % 15 % 8 % 5 % (0 )% DAU by region (in millions)
North America 77 80 81 80 79 79 North America - YoY 18 % 18 % 14 %
7 % 3 % (1 )% Europe 57 60 62 61 59 60 Europe - YoY 17 % 17 % 13 %
7 % 4 % (1 )% Rest of World 44 47 48 47 47 47 Rest of World - YoY
14 % 21 % 18 % 12 % 8 % 1 % ARPU $ 1.17 $ 1.53 $ 1.21 $ 1.40 $ 1.60
$ 2.09 ARPU - YoY 39 % 46 % 34 % 34 % 37 % 37 % ARPU by region
North America $ 2.17 $ 2.75 $ 2.10 $ 2.21 $ 2.62 $ 3.38 North
America - YoY 24 % 28 % 16 % 12 % 20 % 23 % Europe $ 0.48 $ 0.66 $
0.53 $ 0.66 $ 0.85 $ 1.04 Europe - YoY 98 % 133 % 120 % 70 % 78 %
57 % Rest of World $ 0.30 $ 0.56 $ 0.58 $ 0.96 $ 0.84 $ 1.24 Rest
of World - YoY NM 284 % 198 % 233 % 175 % 120 % Employees
(full-time; excludes part-time, contractors, and temporary
personnel) 2,958 3,069 2,989 2,879 2,903 2,884 Employees - YoY 109
% 65 % 27 % 10 % (2 )% (6 )%
Depreciation and
amortization expense Cost of revenue $ 5,404 $ 5,179 $ 5,202 $
5,610 $ 5,582 $ 9,888 Research and development 6,401 6,937 8,791
9,489 10,174 4,547 Sales and marketing 2,820 3,441 3,569 3,991
4,054 3,475 General and administrative 2,842
3,229 3,991 3,424 5,088
4,772 Total $ 17,467 $ 18,786 $
21,553 $ 22,514 $ 24,898 $ 22,682
Depreciation and amortization expense - YoY 135 % 77 % 73 % 79 % 43
% 21 %
Stock-based compensation expense Cost of
revenue $ 1,951 $ 2,189 $ 276 $ 1,467 $ 1,368 $ 1,283 Research and
development 143,303 129,199 77,815 92,303 95,329 75,086 Sales and
marketing 27,254 28,936 16,185 21,996 25,082 20,795 General and
administrative 49,194 20,720
38,982 40,605 5,030
24,608 Total $ 221,702 $ 181,044 $ 133,258
$ 156,371 $ 126,809 $ 121,772
Stock-based compensation expense - YoY NM NM (93 )% (36 )% (43 )%
(33 )%
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version on businesswire.com: https://www.businesswire.com/news/home/20190205005923/en/
Investors and Analysts:ir@snap.com
Press:press@snap.com
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