Company Announcements

Snap Inc. Announces Third Quarter 2021 Financial Results

Daily Active Users increased 23% year-over-year to 306 million

Revenue increased 57% year-over-year to $1,067 million

Net loss improved 64% and Adjusted EBITDA improved 209% year-over-year

SANTA MONICA, Calif.--(BUSINESS WIRE)--Oct. 21, 2021-- Snap Inc. (NYSE: SNAP) today announced financial results for the quarter ended September 30, 2021.

Financial Highlights

  • Revenue increased 57% to $1,067 million in Q3 2021, compared to the prior year.
  • Net loss improved 64% to $(72) million in Q3 2021, compared to the prior year.
  • Adjusted EBITDA improved 209% to $174 million in Q3 2021, compared to the prior year.
  • Operating cash flow was $72 million in Q3 2021, compared to $(55) million in the prior year.
  • Free Cash Flow was $52 million in Q3 2021, compared to $(70) million in the prior year.
  • Common shares outstanding plus shares underlying stock-based awards totaled 1,698 million at September 30, 2021, compared to 1,624 million one year ago.

“Snap celebrated its 10th anniversary this quarter, and we are excited about the long-term opportunity and potential for our business, as we grew our community to 306 million daily active users, and grew our revenue 57% year-over-year to reach $1.067 billion for the quarter,” said Evan Spiegel, CEO. “We’re now operating at the scale necessary to navigate significant headwinds, including changes to the iOS platform that impact the way advertising is targeted, measured, and optimized, as well as global supply chain issues and labor shortages impacting our partners. We will continue to focus on delivering strong results for our advertising partners and innovating to expand the capabilities of our platform and better serve our community.”

 

Three Months Ended September 30,

 

 

Percent

 

 

Nine Months Ended September 30,

 

 

Percent

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

(Unaudited)

(in thousands, except per share amounts)

 

 

 

 

 

Revenue

$

1,067,471

 

 

$

678,668

 

 

 

57

%

 

$

2,819,163

 

 

$

1,595,304

 

 

 

77

%

Operating loss

$

(180,824

)

 

$

(167,864

)

 

 

(8

)%

 

$

(676,942

)

 

$

(764,836

)

 

 

11

%

Net loss

$

(71,959

)

 

$

(199,853

)

 

 

64

%

 

$

(510,505

)

 

$

(831,740

)

 

 

39

%

Adjusted EBITDA(1)

$

174,199

 

 

$

56,361

 

 

 

209

%

 

$

289,893

 

 

$

(120,446

)

 

 

341

%

Cash provided by (used in) operating activities

$

71,552

 

 

$

(54,828

)

 

 

231

%

 

$

107,352

 

 

$

(115,099

)

 

 

193

%

Free Cash Flow(2)

$

51,716

 

 

$

(69,555

)

 

 

174

%

 

$

62,042

 

 

$

(156,484

)

 

 

140

%

Diluted net loss per share attributable to common stockholders

$

(0.05

)

 

$

(0.14

)

 

 

67

%

 

$

(0.33

)

 

$

(0.58

)

 

 

43

%

Non-GAAP diluted net income (loss) per share(3)

$

0.17

 

 

$

0.01

 

 

 

2,089

%

 

$

0.27

 

 

$

(0.16

)

 

 

271

%

Common shares outstanding plus shares underlying stock-based awards

 

1,697,879

 

 

 

1,623,630

 

 

 

5

%

 

 

1,697,879

 

 

 

1,623,630

 

 

 

5

%

  1. See page 10 for reconciliation of net loss to Adjusted EBITDA.
  2. See page 10 for reconciliation of cash provided by (used in) operating activities to Free Cash Flow.
  3. See page 11 for reconciliation of GAAP diluted net loss per share to non-GAAP diluted net income (loss) per share.

Q3 2021 Summary & Key Highlights

The Snapchat community is active, engaged, and growing:

  • DAUs were 306 million in Q3 2021, an increase of 57 million, or 23%, year-over-year.
  • Year-over-year growth in DAUs has exceeded 20% for four consecutive quarters.

We invested and innovated in our camera and augmented reality platforms:

  • We released the next generation of Scan, adding new categories of intelligence to Scan and allowing Snapchatters to access our powerful visual search capabilities right from the Camera home screen.
  • In Q3 2021, five of our new augmented reality Lenses driven by SnapML, our machine learning platform in Lens Studio, generated more than 1 billion impressions each, achieving over 11 billion impressions in total.
  • We featured nine new community try-on Lenses for Fashion Week, drawing inspiration from unique trends within the major Fashion Week cities to showcase virtual outfits.
  • We partnered with SignAll to introduce three AR Lenses teaching Snapchatters how to fingerspell in American Sign Language.
  • We partnered with Sotheby’s to launch the ‘The Final Christo: Original Works for The Arc de Triomphe’ Lens, allowing Snapchatters to experience Christo and Jeanne-Claude’s artistic rendition of the Arc de Triomphe from anywhere in the world.

We invested in our content offerings:

  • Content submissions on Spotlight more than doubled relative to the prior quarter.
  • We launched Spotlight Challenges in the U.S., our newest addition to the Creator Fund that rewards top-performing submissions for specific content categories with monetary prizes.
  • In Q3 2021, 15 different Discover partners each reached over 50 million unique Snapchatters.
  • We launched new Discover channels in 14 different countries, including 22 new channels in each of India and the U.K.
  • Two of our new Snap Originals, “Meme Mom” and “Honestly Loren”, reached over 10 million viewers each.

We expanded our product and partner ecosystem:

  • We introduced 3D Bitmoji in Profiles, which enables Snapchatters to express themselves with a 3D version of their digital avatar, and over 170 million Snapchatters have engaged with their 3D Bitmoji Profile since launch.
  • We introduced My Places, a new feature on the Snap Map where Snapchatters can find personalized recommendations of places to eat and visit based on their friends’ interests.
  • We launched our Run for Office Mini, allowing Snapchatters in the U.S. to explore hundreds of opportunities to run for public office based on their interests and location.
  • We partnered with HBO Max to launch a new Mini where Snapchatters in the U.S. can stream full-length episodes of popular HBO Max shows simultaneously with their friends.
  • We launched our Birthday Mini, allowing Snapchatters to see their friends’ birthdays and send personalized greetings, which was used by over 10 million Snapchatters in the first 21 days after launch.

We expanded our offering for advertisers:

  • We launched our ‘Open Your Snapchat’ marketing campaign, which invites both consumers and advertisers to experience augmented reality, unlocking hundreds of custom experiences localized to several different markets across the globe.
  • We introduced Snapchat Trends for advertisers, which highlights popular keywords shared among the Snapchat community and helps advertisers better engage their audience.
  • We introduced Campaign Lab, which allows advertisers to better track and analyze their split tests to gain insights for future campaigns.
  • We announced The AR Lab, our partnership with WPP to help clients build and deliver immersive experiences on Snapchat using AR.
  • We announced the launch of Arcadia, our new global creative studio for branded AR, which will develop new technology and deliver impactful and effective AR experiences to brand and agency partners.

Financial Guidance

The following forward-looking statements reflect our expectations for the fourth quarter of 2021 as of October 21, 2021, 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.”

Q4 2021 Outlook

  • Revenue is estimated to be between $1,165 million and $1,205 million.
  • Adjusted EBITDA is estimated to be between $135 million and $175 million.

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 other payroll related 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, and the impact of COVID-19 on our business and the economy as a whole, 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 and the ongoing COVID-19 pandemic 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 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, 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 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 periodic report 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 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 the COVID-19 pandemic, 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 other payroll related 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 other payroll related 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 September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(71,959

)

 

$

(199,853

)

 

$

(510,505

)

 

$

(831,740

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

32,510

 

 

 

21,804

 

 

 

84,278

 

 

 

63,933

 

Stock-based compensation

 

300,898

 

 

 

192,080

 

 

 

794,571

 

 

 

550,300

 

Amortization of debt discount and issuance costs

 

1,109

 

 

 

24,503

 

 

 

3,301

 

 

 

56,478

 

(Gains) losses on debt and equity securities, net

 

(121,007

)

 

 

4,142

 

 

 

(223,527

)

 

 

12,114

 

Induced conversion expense related to convertible notes

 

4,536

 

 

 

 

 

 

41,538

 

 

 

 

Other

 

(732

)

 

 

1,924

 

 

 

4,019

 

 

 

(443

)

Change in operating assets and liabilities, net of effect of

acquisitions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net of allowance

 

(132,908

)

 

 

(151,856

)

 

 

(178,044

)

 

 

(43,310

)

Prepaid expenses and other current assets

 

(4,191

)

 

 

(10,608

)

 

 

(15,562

)

 

 

(19,352

)

Operating lease right-of-use assets

 

11,470

 

 

 

10,054

 

 

 

35,217

 

 

 

28,307

 

Other assets

 

(4,204

)

 

 

3,390

 

 

 

(5,440

)

 

 

2,343

 

Accounts payable

 

11,084

 

 

 

3,435

 

 

 

17,430

 

 

 

11,448

 

Accrued expenses and other current liabilities

 

56,687

 

 

 

61,595

 

 

 

89,726

 

 

 

94,368

 

Operating lease liabilities

 

(13,911

)

 

 

(15,760

)

 

 

(35,265

)

 

 

(40,739

)

Other liabilities

 

2,170

 

 

 

322

 

 

 

5,615

 

 

 

1,194

 

Net cash provided by (used in) operating activities

 

71,552

 

 

 

(54,828

)

 

 

107,352

 

 

 

(115,099

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(19,836

)

 

 

(14,727

)

 

 

(45,310

)

 

 

(41,385

)

Strategic investments

 

(735

)

 

 

(3,500

)

 

 

(33,510

)

 

 

(95,341

)

Cash paid for acquisitions, net of cash acquired

 

(37,375

)

 

 

(33,508

)

 

 

(176,591

)

 

 

(53,712

)

Purchases of marketable securities

 

(609,176

)

 

 

(1,148,344

)

 

 

(1,896,766

)

 

 

(2,576,892

)

Sales of marketable securities

 

19,999

 

 

 

155,899

 

 

 

367,555

 

 

 

373,857

 

Maturities of marketable securities

 

492,921

 

 

 

668,930

 

 

 

2,006,744

 

 

 

1,898,176

 

Other

 

(1,000

)

 

 

 

 

 

35,100

 

 

 

(500

)

Net cash provided by (used in) investing activities

 

(155,202

)

 

 

(375,250

)

 

 

257,222

 

 

 

(495,797

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible notes, net of issuance costs

 

 

 

 

 

 

 

1,137,227

 

 

 

988,582

 

Purchase of capped calls

 

 

 

 

 

 

 

(86,825

)

 

 

(100,000

)

Proceeds from the exercise of stock options

 

4,045

 

 

 

2,434

 

 

 

11,755

 

 

 

26,041

 

Net cash provided by financing activities

 

4,045

 

 

 

2,434

 

 

 

1,062,157

 

 

 

914,623

 

Change in cash, cash equivalents, and restricted cash

 

(79,605

)

 

 

(427,644

)

 

 

1,426,731

 

 

 

303,727

 

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

 

2,052,879

 

 

 

1,252,631

 

 

 

546,543

 

 

 

521,260

 

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

$

1,973,274

 

 

$

824,987

 

 

$

1,973,274

 

 

$

824,987

 

Supplemental disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for income taxes, net

$

1,940

 

 

$

1,309

 

 

$

16,228

 

 

$

2,679

 

Cash paid for interest

$

3,508

 

 

$

5,113

 

 

 

10,249

 

 

 

10,378

 

SNAP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

$

1,067,471

 

 

$

678,668

 

 

$

2,819,163

 

 

$

1,595,304

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

443,473

 

 

 

293,095

 

 

 

1,301,095

 

 

 

796,959

 

Research and development

 

412,021

 

 

 

283,639

 

 

 

1,131,272

 

 

 

783,115

 

Sales and marketing

 

217,526

 

 

 

143,511

 

 

 

547,536

 

 

 

397,834

 

General and administrative

 

175,275

 

 

 

126,287

 

 

 

516,202

 

 

 

382,232

 

Total costs and expenses

 

1,248,295

 

 

 

846,532

 

 

 

3,496,105

 

 

 

2,360,140

 

Operating loss

 

(180,824

)

 

 

(167,864

)

 

 

(676,942

)

 

 

(764,836

)

Interest income

 

1,257

 

 

 

2,801

 

 

 

3,645

 

 

 

16,158

 

Interest expense

 

(4,031

)

 

 

(28,212

)

 

 

(13,626

)

 

 

(68,052

)

Other income (expense), net

 

112,631

 

 

 

(5,669

)

 

 

176,971

 

 

 

(14,483

)

Loss before income taxes

 

(70,967

)

 

 

(198,944

)

 

 

(509,952

)

 

 

(831,213

)

Income tax benefit (expense)

 

(992

)

 

 

(909

)

 

 

(553

)

 

 

(527

)

Net loss

$

(71,959

)

 

$

(199,853

)

 

$

(510,505

)

 

$

(831,740

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.05

)

 

$

(0.14

)

 

$

(0.33

)

 

$

(0.58

)

Diluted

$

(0.05

)

 

$

(0.14

)

 

$

(0.33

)

 

$

(0.58

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

1,580,966

 

 

 

1,466,420

 

 

 

1,543,568

 

 

 

1,446,040

 

Diluted

 

1,580,966

 

 

 

1,466,420

 

 

 

1,543,568

 

 

 

1,446,040

 

SNAP INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

 

 

 

 

 

 

September 30,

2021

 

 

December 31,

2020

 

 

 

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

$

1,972,358

 

 

$

545,618

 

Marketable securities

 

 

 

 

 

1,509,463

 

 

 

1,991,922

 

Accounts receivable, net of allowance

 

 

 

 

 

913,539

 

 

 

744,288

 

Prepaid expenses and other current assets

 

 

 

 

 

76,669

 

 

 

56,147

 

Total current assets

 

 

 

 

 

4,472,029

 

 

 

3,337,975

 

Property and equipment, net

 

 

 

 

 

189,946

 

 

 

178,709

 

Operating lease right-of-use assets

 

 

 

 

 

291,181

 

 

 

269,728

 

Intangible assets, net

 

 

 

 

 

261,131

 

 

 

105,929

 

Goodwill

 

 

 

 

 

1,484,108

 

 

 

939,259

 

Other assets

 

 

 

 

 

412,770

 

 

 

192,638

 

Total assets

 

 

 

 

$

7,111,165

 

 

$

5,024,238

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 

 

 

$

91,769

 

 

$

71,908

 

Operating lease liabilities

 

 

 

 

 

56,191

 

 

 

41,077

 

Accrued expenses and other current liabilities

 

 

 

 

 

660,536

 

 

 

554,342

 

Total current liabilities

 

 

 

 

 

808,496

 

 

 

667,327

 

Convertible senior notes, net

 

 

 

 

 

2,252,079

 

 

 

1,675,169

 

Operating lease liabilities, noncurrent

 

 

 

 

 

292,506

 

 

 

287,292

 

Other liabilities

 

 

 

 

 

317,968

 

 

 

64,474

 

Total liabilities

 

 

 

 

 

3,671,049

 

 

 

2,694,262

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Class A non-voting common stock, $0.00001 par value. 3,000,000 shares authorized, 1,349,890 shares issued and outstanding at September 30, 2021, and 3,000,000 shares authorized, 1,248,010 shares issued and outstanding at December 31, 2020.

 

 

 

 

 

13

 

 

 

12

 

Class B voting common stock, $0.00001 par value. 700,000 shares authorized, 23,636 shares issued and outstanding at September 30, 2021, and 700,000 shares authorized, 23,696 shares issued and outstanding at December 31, 2020.

 

 

 

 

 

 

 

 

 

Class C voting common stock, $0.00001 par value. 260,888 shares authorized, 231,627 shares issued and outstanding at September 30, 2021, and 260,888 shares authorized, 231,627 shares issued and outstanding at December 31, 2020.

 

 

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

 

 

 

11,737,338

 

 

 

10,200,141

 

Accumulated other comprehensive income (loss)

 

 

 

 

 

9,779

 

 

 

21,363

 

Accumulated deficit

 

 

 

 

 

(8,307,016

)

 

 

(7,891,542

)

Total stockholders’ equity

 

 

 

 

 

3,440,116

 

 

 

2,329,976

 

Total liabilities and stockholders’ equity

 

 

 

 

$

7,111,165

 

 

$

5,024,238

 

SNAP INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, unaudited)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Free Cash Flow reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

71,552

 

 

$

(54,828

)

 

$

107,352

 

 

$

(115,099

)

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(19,836

)

 

 

(14,727

)

 

 

(45,310

)

 

 

(41,385

)

Free Cash Flow

$

51,716

 

 

$

(69,555

)

 

$

62,042

 

 

$

(156,484

)

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(71,959

)

 

$

(199,853

)

 

$

(510,505

)

 

$

(831,740

)

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

(1,257

)

 

 

(2,801

)

 

 

(3,645

)

 

 

(16,158

)

Interest expense

 

4,031

 

 

 

28,212

 

 

 

13,626

 

 

 

68,052

 

Other (income) expense, net

 

(112,631

)

 

 

5,669

 

 

 

(176,971

)

 

 

14,483

 

Income tax (benefit) expense

 

992

 

 

 

909

 

 

 

553

 

 

 

527

 

Depreciation and amortization

 

32,510

 

 

 

21,804

 

 

 

84,278

 

 

 

63,933

 

Stock-based compensation expense

 

300,898

 

 

 

192,080

 

 

 

794,571

 

 

 

550,300

 

Payroll and other tax expense related to stock-based compensation

 

21,615

 

 

 

10,341

 

 

 

87,986

 

 

 

30,157

 

Adjusted EBITDA

$

174,199

 

 

$

56,361

 

 

$

289,893

 

 

$

(120,446

)

Total depreciation and amortization expense by function:

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Depreciation and amortization expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

4,876

 

 

$

5,615

 

 

$

14,879

 

 

$

16,672

 

Research and development

 

17,321

 

 

 

9,526

 

 

 

42,715

 

 

 

26,904

 

Sales and marketing

 

6,306

 

 

 

3,233

 

 

 

14,654

 

 

 

9,780

 

General and administrative

 

4,007

 

 

 

3,430

 

 

 

12,030

 

 

 

10,577

 

Total

$

32,510

 

 

$

21,804

 

 

$

84,278

 

 

$

63,933

 

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 September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Stock-based compensation expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

9,132

 

 

$

2,623

 

 

$

14,635

 

 

$

6,471

 

Research and development

 

198,893

 

 

 

132,003

 

 

 

537,177

 

 

 

377,836

 

Sales and marketing

 

51,675

 

 

 

27,393

 

 

 

118,250

 

 

 

79,306

 

General and administrative

 

41,198

 

 

 

30,061

 

 

 

124,509

 

 

 

86,687

 

Total

$

300,898

 

 

$

192,080

 

 

$

794,571

 

 

$

550,300

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Non-GAAP net income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(71,959

)

 

$

(199,853

)

 

$

(510,505

)

 

$

(831,740

)

Amortization of intangible assets

 

18,148

 

 

 

8,422

 

 

 

42,956

 

 

 

23,780

 

Stock-based compensation expense

 

300,898

 

 

 

192,080

 

 

 

794,571

 

 

 

550,300

 

Payroll and other tax expense related to stock-based compensation

 

21,615

 

 

 

10,341

 

 

 

87,986

 

 

 

30,157

 

Income tax adjustments

 

(208

)

 

 

388

 

 

 

182

 

 

 

415

 

Non-GAAP net income (loss)

$

268,494

 

 

$

11,378

 

 

$

415,190

 

 

$

(227,088

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares - Diluted

 

1,580,966

 

 

 

1,466,420

 

 

 

1,543,568

 

 

 

1,446,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP diluted net income (loss) per share reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net loss per share

$

(0.05

)

 

$

(0.14

)

 

$

(0.33

)

 

$

(0.58

)

Non-GAAP adjustment to net loss

 

0.22

 

 

 

0.15

 

 

 

0.60

 

 

 

0.42

 

Non-GAAP diluted net income (loss) per share

$

0.17

 

 

$

0.01

 

 

$

0.27

 

 

$

(0.16

)

SNAP INC.

SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS

(dollars and shares in thousands, except per user amounts, unaudited)

 

 

Q2 2020

 

 

Q3 2020

 

 

Q4 2020

 

 

Q1 2021

 

 

Q2 2021

 

 

Q3 2021

 

Cash Flows and Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

(66,554

)

 

$

(54,828

)

 

$

(52,545

)

 

$

136,886

 

 

$

(101,086

)

 

$

71,552

 

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

 

31

%

 

 

28

%

 

 

21

%

 

 

(2,079

)%

 

 

(52

)%

 

 

231

%

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

$

(203,262

)

 

$

(181,941

)

 

$

(167,644

)

 

$

(37,041

)

 

$

(71,573

)

 

$

54,807

 

Purchases of property and equipment

$

(15,767

)

 

$

(14,727

)

 

$

(16,447

)

 

$

(10,851

)

 

$

(14,623

)

 

$

(19,836

)

Purchases of property and equipment - YoY

 

107

%

 

 

86

%

 

 

81

%

 

 

 

 

 

(7

)%

 

 

35

%

Purchases of property and equipment - TTM

$

(43,689

)

 

$

(50,478

)

 

$

(57,832

)

 

$

(57,792

)

 

$

(56,648

)

 

$

(61,757

)

Free Cash Flow

$

(82,321

)

 

$

(69,555

)

 

$

(68,992

)

 

$

126,035

 

 

$

(115,709

)

 

$

51,716

 

Free Cash Flow - YoY

 

20

%

 

 

17

%

 

 

9

%

 

 

2,835

%

 

 

(41

)%

 

 

174

%

Free Cash Flow - TTM

$

(246,951

)

 

$

(232,419

)

 

$

(225,476

)

 

$

(94,833

)

 

$

(128,221

)

 

$

(6,950

)

Common shares outstanding

 

1,463,620

 

 

 

1,484,716

 

 

 

1,503,333

 

 

 

1,519,001

 

 

 

1,576,744

 

 

 

1,605,153

 

Common shares outstanding - YoY

 

7

%

 

 

7

%

 

 

6

%

 

 

6

%

 

 

8

%

 

 

8

%

Shares underlying stock-based awards

 

152,526

 

 

 

138,914

 

 

 

126,287

 

 

 

110,190

 

 

 

104,516

 

 

 

92,726

 

Shares underlying stock-based awards - YoY

 

(16

)%

 

 

(21

)%

 

 

(21

)%

 

 

(26

)%

 

 

(31

)%

 

 

(33

)%

Total common shares outstanding plus shares underlying stock-based awards

 

1,616,146

 

 

 

1,623,630

 

 

 

1,629,620

 

 

 

1,629,191

 

 

 

1,681,260

 

 

 

1,697,879

 

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

 

4

%

 

 

4

%

 

 

3

%

 

 

3

%

 

 

4

%

 

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

454,158

 

 

$

678,668

 

 

$

911,322

 

 

$

769,584

 

 

$

982,108

 

 

$

1,067,471

 

Revenue - YoY

 

17

%

 

 

52

%

 

 

62

%

 

 

66

%

 

 

116

%

 

 

57

%

Revenue - TTM

$

1,923,723

 

 

$

2,156,193

 

 

$

2,506,626

 

 

$

2,813,732

 

 

$

3,341,682

 

 

$

3,730,485

 

Revenue by region(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

306,740

 

 

$

492,928

 

 

$

659,163

 

 

$

552,972

 

 

$

701,735

 

 

$

786,917

 

North America - YoY

 

18

%

 

 

56

%

 

 

73

%

 

 

75

%

 

 

129

%

 

 

60

%

North America - TTM

$

1,320,447

 

 

$

1,497,347

 

 

$

1,774,481

 

 

$

2,011,803

 

 

$

2,406,798

 

 

$

2,700,787

 

Europe

$

78,635

 

 

$

102,480

 

 

$

141,608

 

 

$

113,619

 

 

$

152,268

 

 

$

153,121

 

Europe - YoY

 

30

%

 

 

49

%

 

 

54

%

 

 

49

%

 

 

94

%

 

 

49

%

Europe - TTM

$

315,559

 

 

$

349,486

 

 

$

399,221

 

 

$

436,342

 

 

$

509,975

 

 

$

560,616

 

Rest of World

$

68,783

 

 

$

83,260

 

 

$

110,551

 

 

$

102,993

 

 

$

128,105

 

 

$

127,433

 

Rest of World - YoY

 

2

%

 

 

35

%

 

 

27

%

 

 

46

%

 

 

86

%

 

 

53

%

Rest of World - TTM

$

287,717

 

 

$

309,360

 

 

$

332,924

 

 

$

365,587

 

 

$

424,909

 

 

$

469,082

 

Operating loss

$

(310,608

)

 

$

(167,864

)

 

$

(97,236

)

 

$

(303,606

)

 

$

(192,512

)

 

$

(180,824

)

Operating loss - YoY

 

(2

)%

 

 

27

%

 

 

62

%

 

 

(6

)%

 

 

38

%

 

 

(8

)%

Operating loss - Margin

 

(68

)%

 

 

(25

)%

 

 

(11

)%

 

 

(39

)%

 

 

(20

)%

 

 

(17

)%

Operating loss - TTM

$

(1,079,421

)

 

$

(1,018,432

)

 

$

(862,072

)

 

$

(879,314

)

 

$

(761,218

)

 

$

(774,178

)

Net loss

$

(325,951

)

 

$

(199,853

)

 

$

(113,099

)

 

$

(286,882

)

 

$

(151,664

)

 

$

(71,959

)

Net loss - YoY

 

(28

)%

 

 

12

%

 

 

53

%

 

 

6

%

 

 

53

%

 

 

64

%

Net loss - TTM

$

(1,099,966

)

 

$

(1,072,444

)

 

$

(944,839

)

 

$

(925,785

)

 

$

(751,498

)

 

$

(623,604

)

Adjusted EBITDA

$

(95,570

)

 

$

56,361

 

 

$

165,609

 

 

$

(1,709

)

 

$

117,403

 

 

$

174,199

 

Adjusted EBITDA - YoY

 

(21

)%

 

 

233

%

 

 

291

%

 

 

98

%

 

 

223

%

 

 

209

%

Adjusted EBITDA - Margin(2)

 

(21

)%

 

 

8

%

 

 

18

%

 

 

 

 

 

12

%

 

 

16

%

Adjusted EBITDA - TTM

$

(176,875

)

 

$

(78,139

)

 

$

45,163

 

 

$

124,691

 

 

$

337,664

 

 

$

455,502

 

  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)

 

 

Q2 2020

 

 

Q3 2020

 

 

Q4 2020

 

 

Q1 2021

 

 

Q2 2021

 

 

Q3 2021

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DAU (in millions)

 

238

 

 

 

249

 

 

 

265

 

 

 

280

 

 

 

293

 

 

 

306

 

DAU - YoY

 

17

%

 

 

18

%

 

 

22

%

 

 

22

%

 

 

23

%

 

 

23

%

DAU by region (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

90

 

 

 

90

 

 

 

92

 

 

 

93

 

 

 

95

 

 

 

96

 

North America - YoY

 

9

%

 

 

7

%

 

 

6

%

 

 

5

%

 

 

6

%

 

 

7

%

Europe

 

71

 

 

 

72

 

 

 

74

 

 

 

77

 

 

 

78

 

 

 

80

 

Europe - YoY

 

12

%

 

 

10

%

 

 

10

%

 

 

9

%

 

 

10

%

 

 

11

%

Rest of World

 

77

 

 

 

87

 

 

 

99

 

 

 

111

 

 

 

120

 

 

 

130

 

Rest of World - YoY

 

37

%

 

 

43

%

 

 

55

%

 

 

57

%

 

 

55

%

 

 

49

%

ARPU

$

1.91

 

 

$

2.73

 

 

$

3.44

 

 

$

2.74

 

 

$

3.35

 

 

$

3.49

 

ARPU - YoY

 

 

 

 

28

%

 

 

33

%

 

 

36

%

 

 

76

%

 

 

28

%

ARPU by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

3.40

 

 

$

5.49

 

 

$

7.19

 

 

$

5.94

 

 

$

7.37

 

 

$

8.20

 

North America - YoY

 

8

%

 

 

46

%

 

 

63

%

 

 

66

%

 

 

116

%

 

 

49

%

Europe

$

1.10

 

 

$

1.43

 

 

$

1.91

 

 

$

1.48

 

 

$

1.95

 

 

$

1.92

 

Europe - YoY

 

16

%

 

 

36

%

 

 

39

%

 

 

36

%

 

 

76

%

 

 

34

%

Rest of World

$

0.89

 

 

$

0.95

 

 

$

1.11

 

 

$

0.93

 

 

$

1.07

 

 

$

0.98

 

Rest of World - YoY

 

(26

)%

 

 

(6

)%

 

 

(18

)%

 

 

(7

)%

 

 

20

%

 

 

3

%

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

 

3,550

 

 

 

3,713

 

 

 

3,863

 

 

 

4,043

 

 

 

4,667

 

 

 

5,190

 

Employees - YoY

 

30

%

 

 

28

%

 

 

21

%

 

 

18

%

 

 

31

%

 

 

40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

5,532

 

 

$

5,615

 

 

$

5,533

 

 

$

5,276

 

 

$

4,727

 

 

$

4,876

 

Research and development

 

8,463

 

 

 

9,526

 

 

 

10,723

 

 

 

11,036

 

 

 

14,358

 

 

 

17,321

 

Sales and marketing

 

3,381

 

 

 

3,233

 

 

 

3,136

 

 

 

3,186

 

 

 

5,162

 

 

 

6,306

 

General and administrative

 

3,549

 

 

 

3,430

 

 

 

3,419

 

 

 

4,000

 

 

 

4,023

 

 

 

4,007

 

Total

$

20,925

 

 

$

21,804

 

 

$

22,811

 

 

$

23,498

 

 

$

28,270

 

 

$

32,510

 

Depreciation and amortization expense - YoY

 

(8

)%

 

 

6

%

 

 

11

%

 

 

11

%

 

 

35

%

 

 

49

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

2,066

 

 

$

2,623

 

 

$

2,896

 

 

$

2,656

 

 

$

2,847

 

 

$

9,132

 

Research and development

 

127,516

 

 

 

132,003

 

 

 

155,436

 

 

 

163,793

 

 

 

174,491

 

 

 

198,893

 

Sales and marketing

 

27,107

 

 

 

27,393

 

 

 

28,964

 

 

 

29,084

 

 

 

37,491

 

 

 

51,675

 

General and administrative

 

29,482

 

 

 

30,061

 

 

 

32,586

 

 

 

41,450

 

 

 

41,771

 

 

 

41,198

 

Total

$

186,171

 

 

$

192,080

 

 

$

219,882

 

 

$

237,073

 

 

$

256,600

 

 

$

300,898

 

Stock-based compensation expense - YoY

 

(5

)%

 

 

19

%

 

 

32

%

 

 

38

%

 

 

38

%

 

 

57

%

 

Investors and Analysts:
ir@snap.com

Press:
press@snap.com

Source: Snap Inc.