Snap Inc. Announces Third Quarter 2024 Financial Results
Third quarter revenue increased 15% year-over-year to
Daily Active Users increased 9% year-over-year to 443 million
Net loss improved 58% year-over-year to
Adjusted EBITDA improved 229% year-over-year to
“I’m proud of the team’s progress this quarter, delivering strong community growth and deepening engagement while driving improved financial performance,” said
The goal of the program is to utilize the company’s strong balance sheet to opportunistically offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.
Repurchases under this program will be funded from existing cash and cash equivalents. As of
Q3 2024 Financial Summary
-
Revenue was
$1,373 million , compared to$1,189 million in the prior year, an increase of 15% year-over-year. -
Net loss was
$153 million , compared to$368 million in the prior year. -
Adjusted EBITDA was
$132 million , compared to$40 million in the prior year. -
Operating cash flow was
$116 million , compared to$13 million in the prior year. -
Free Cash Flow was
$72 million , compared to$(61) million in the prior year.
|
Three Months Ended
|
|
Percent Change |
|
Nine Months Ended
|
|
Percent Change |
||||||||||||||
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
(in thousands, except per share amounts) |
||||||||||||||||||||
(Unaudited) |
(NM = Not Meaningful) |
||||||||||||||||||||
Revenue |
$ |
1,372,574 |
|
|
$ |
1,188,551 |
|
|
15 |
% |
|
$ |
3,804,115 |
|
|
$ |
3,244,828 |
|
|
17 |
% |
Operating loss |
$ |
(173,210 |
) |
|
$ |
(380,063 |
) |
|
54 |
% |
|
$ |
(760,417 |
) |
|
$ |
(1,149,666 |
) |
|
34 |
% |
Net loss |
$ |
(153,247 |
) |
|
$ |
(368,256 |
) |
|
58 |
% |
|
$ |
(706,957 |
) |
|
$ |
(1,074,238 |
) |
|
34 |
% |
Adjusted EBITDA (1) |
$ |
131,962 |
|
|
$ |
40,094 |
|
|
229 |
% |
|
$ |
232,598 |
|
|
$ |
2,428 |
|
|
NM |
|
Net cash provided by (used in) operating activities |
$ |
115,872 |
|
|
$ |
12,781 |
|
|
NM |
|
|
$ |
182,847 |
|
|
$ |
81,947 |
|
|
123 |
% |
Free Cash Flow (2) |
$ |
71,831 |
|
|
$ |
(60,654 |
) |
|
218 |
% |
|
$ |
36,296 |
|
|
$ |
(76,061 |
) |
|
148 |
% |
Diluted net loss per share attributable to common stockholders |
$ |
(0.09 |
) |
|
$ |
(0.23 |
) |
|
61 |
% |
|
$ |
(0.43 |
) |
|
$ |
(0.67 |
) |
|
36 |
% |
Non-GAAP diluted net income (loss) per share (3) |
$ |
0.08 |
|
|
$ |
0.02 |
|
|
300 |
% |
|
$ |
0.13 |
|
|
$ |
0.01 |
|
|
NM |
|
(1) |
See page 10 for a reconciliation of net loss to Adjusted EBITDA. Total restructuring charges for the nine months ended |
|
(2) |
See page 10 for a reconciliation of net cash provided by (used in) operating activities to Free Cash Flow. |
|
(3) |
See page 11 for a reconciliation of diluted net loss per share to non-GAAP diluted net income (loss) per share. |
Q3 2024 Summary & Key Highlights
We deepened engagement with our community:
- DAUs were 443 million in Q3 2024, an increase of 37 million, or 9% year-over-year.
- Total time spent watching content increased 25% year-over-year.
- Spotlight reached more than 500 million monthly active users on average in Q3, an increase of 21% year-over-year.
-
Over a billion Snaps were shared publicly on
Snapchat every month in Q3 from our community, creators, and media partners. -
We announced an expanded strategic partnership with
Google Cloud to power additional generative AI experiences within My AI, our AI-powered chatbot. - We introduced new AI-enabled features to spark conversations, make great Snaps, and discover new things, like bringing AI to Memories and improving My AI’s ability to problem solve.
-
We launched new safety tools and resources designed to help educators and school administrators understand how their students use
Snapchat , the key protections available to them, and resources to assist in their efforts to create safe and supportive environments for students.
We are focused on accelerating and diversifying our revenue growth:
- Snapchat+ reached 12 million subscribers in Q3, more than doubling year-over-year.
- Ongoing momentum with our direct response products and growth in small- and medium-size businesses contributed to total active advertisers more than doubling year-over-year in Q3.
- We are in the early stages of experimenting with two new ad formats, Sponsored Snaps and Promoted Places, to help businesses reach Snapchatters in engaging ways across our differentiated service.
-
We launched
First Lens Unlimited , which offers advertisers the first impression of the day in the first slot of the Lens Carousel, allowing them to reach our community at greater scale. - We launched State-specific First Story, which allows US advertisers to target First Story takeover campaigns to individual states or to reach the entire country with different creative for each state, as selected by the advertiser.
We invested in our augmented reality platform:
- We introduced the fifth generation of Spectacles, our new see-through, standalone AR glasses that enable developers to use Lenses and experience the world together with friends, powered by Snap OS.
- Snap OS is our brand new and groundbreaking operating system with a natural interface that uses hands and voice, with no controller required. The Snap Spatial Engine understands the world around you so that Lenses appear realistically in three dimensions.
- More than 375,000 AR creators, developers, and teams from nearly every country in the world have built over 4 million Lenses.
- Over 150 million Spotlight videos have been created this year featuring Lenses made by our talented community of Lens Creators.
-
Over 225 million Snapchatters engaged with more than 25 custom Olympic-related AR experiences globally during the
Paris 2024 Games. -
We’re rolling out a slate of new
GenAI Suite features inLens Studio that make it faster and easier to bring your creativity to life, including Animation Blending, Body Morph, and Icon Generation. -
We’re making AR creation simpler with
Easy Lens , a new tool that makes it possible to build Lenses in a matter of minutes, just by typing into a text prompt.
Q4 2024 Outlook
Conference Call Information
Definitions
Free Cash Flow is defined as net cash provided by (used in) operating activities, reduced by purchases of property and equipment.
Common shares outstanding plus shares underlying stock-based awards includes common shares outstanding, restricted stock units, restricted stock awards, and outstanding stock options.
Adjusted EBITDA is defined as net income (loss), excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense; payroll and other tax expense related to stock-based compensation; and certain other items impacting net income (loss) from time to time.
A Daily Active User (DAU) is defined as a registered and logged-in
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 and logged-in
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
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release, including statements regarding guidance, our future results of operations or financial condition, future stock repurchase programs or stock dividends, business strategy and plans, user growth and engagement, product initiatives, objectives of management for future operations, and advertiser and partner offerings, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. We caution you that the foregoing may not include all of the forward-looking statements made in this press release.
You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends, including our financial outlook, macroeconomic uncertainty, and geo-political events and conflicts, that we believe may continue to affect our business, financial condition, results of operations, and prospects. These forward-looking statements are subject to risks and uncertainties related to: our financial performance; our ability to attain and sustain profitability; our ability to generate and sustain positive cash flow; our ability to attract and retain users, partners, and advertisers; competition and new market entrants; managing our growth and future expenses; compliance with new laws, regulations, and executive actions; our ability to maintain, protect, and enhance our intellectual property; our ability to succeed in existing and new market segments; our ability to attract and retain qualified team members and key personnel; our ability to repay or refinance outstanding debt, or to access additional financing; future acquisitions, divestitures, or investments; and the potential adverse impact of climate change, natural disasters, health epidemics, macroeconomic conditions, and war or other armed conflict, as well as risks, uncertainties, and other factors described in “Risk Factors” and elsewhere in our most recent periodic report filed with the
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
We use the non-GAAP financial measure of Free Cash Flow, which is defined as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. We believe Free Cash Flow is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business and is a key financial indicator used by management. Additionally, we believe that Free Cash Flow is an important measure since we use third-party infrastructure partners to host our services and therefore we do not incur significant capital expenditures to support revenue generating activities. Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.
We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net income (loss), excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense; payroll and other tax expense related to stock-based compensation; and certain other items impacting net income (loss) from time to time. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in Adjusted EBITDA.
We use the non-GAAP financial measure of non-GAAP net income (loss), which is defined as net income (loss), excluding amortization of intangible assets; stock-based compensation expense; payroll and other tax expense related to stock-based compensation; certain other items impacting net income (loss) from time to time; and related income tax adjustments. Non-GAAP net income (loss) and weighted average diluted shares are then used to calculate non-GAAP diluted net income (loss) per share. Similar to Adjusted EBITDA, we believe these measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses we exclude in the measure.
We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance through the eyes of management, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.
For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see “Reconciliation of GAAP to Non-GAAP Financial Measures.”
CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
||||||||
Net loss |
$ |
(153,247 |
) |
|
$ |
(368,256 |
) |
|
$ |
(706,957 |
) |
|
$ |
(1,074,238 |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation and amortization |
|
38,850 |
|
|
|
41,209 |
|
|
|
118,493 |
|
|
|
116,117 |
|
Stock-based compensation |
|
260,229 |
|
|
|
357,933 |
|
|
|
783,292 |
|
|
|
990,807 |
|
Amortization of debt issuance costs |
|
2,717 |
|
|
|
1,842 |
|
|
|
6,667 |
|
|
|
5,517 |
|
Losses (gains) on debt and equity securities, net |
|
536 |
|
|
|
21,155 |
|
|
|
12,166 |
|
|
|
5,888 |
|
Other |
|
2,200 |
|
|
|
(4,395 |
) |
|
|
(3,829 |
) |
|
|
(31,098 |
) |
Change in operating assets and liabilities, net of effect of acquisitions: |
|
|
|
|
|
|
|
||||||||
Accounts receivable, net of allowance |
|
(51,941 |
) |
|
|
(128,972 |
) |
|
|
73,350 |
|
|
|
55,772 |
|
Prepaid expenses and other current assets |
|
11,914 |
|
|
|
(837 |
) |
|
|
(36,241 |
) |
|
|
(15,139 |
) |
Operating lease right-of-use assets |
|
12,731 |
|
|
|
17,904 |
|
|
|
41,235 |
|
|
|
53,379 |
|
Other assets |
|
3,090 |
|
|
|
(2,767 |
) |
|
|
(3,007 |
) |
|
|
(3,192 |
) |
Accounts payable |
|
(16,642 |
) |
|
|
(16,951 |
) |
|
|
(112,287 |
) |
|
|
(45,497 |
) |
Accrued expenses and other current liabilities |
|
19,331 |
|
|
|
105,907 |
|
|
|
46,771 |
|
|
|
68,697 |
|
Operating lease liabilities |
|
(16,384 |
) |
|
|
(16,181 |
) |
|
|
(44,254 |
) |
|
|
(52,523 |
) |
Other liabilities |
|
2,488 |
|
|
|
5,190 |
|
|
|
7,448 |
|
|
|
7,457 |
|
Net cash provided by (used in) operating activities |
|
115,872 |
|
|
|
12,781 |
|
|
|
182,847 |
|
|
|
81,947 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment |
|
(44,041 |
) |
|
|
(73,435 |
) |
|
|
(146,551 |
) |
|
|
(158,008 |
) |
Purchases of strategic investments |
|
— |
|
|
|
— |
|
|
|
(2,000 |
) |
|
|
(7,770 |
) |
Sales of strategic investments |
|
557 |
|
|
|
5,151 |
|
|
|
1,572 |
|
|
|
5,151 |
|
Cash paid for acquisitions, net of cash acquired |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(50,254 |
) |
Purchases of marketable securities |
|
(705,066 |
) |
|
|
(537,046 |
) |
|
|
(1,945,590 |
) |
|
|
(2,042,317 |
) |
Sales of marketable securities |
|
187,754 |
|
|
|
16,451 |
|
|
|
354,311 |
|
|
|
107,724 |
|
Maturities of marketable securities |
|
337,985 |
|
|
|
557,579 |
|
|
|
1,170,066 |
|
|
|
2,093,737 |
|
Other |
|
— |
|
|
|
(308 |
) |
|
|
(100 |
) |
|
|
(432 |
) |
Net cash provided by (used in) investing activities |
|
(222,811 |
) |
|
|
(31,608 |
) |
|
|
(568,292 |
) |
|
|
(52,169 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
||||||||
Proceeds from issuance of convertible notes, net of issuance costs |
|
— |
|
|
|
— |
|
|
|
740,350 |
|
|
|
— |
|
Purchase of capped calls |
|
— |
|
|
|
— |
|
|
|
(68,850 |
) |
|
|
— |
|
Proceeds from termination of capped calls |
|
— |
|
|
|
— |
|
|
|
62,683 |
|
|
|
— |
|
Proceeds from the exercise of stock options |
|
10,304 |
|
|
|
5 |
|
|
|
12,798 |
|
|
|
416 |
|
Repurchases of Class A non-voting common stock |
|
— |
|
|
|
— |
|
|
|
(311,069 |
) |
|
|
— |
|
Deferred payments for acquisitions |
|
— |
|
|
|
(10,441 |
) |
|
|
(3,695 |
) |
|
|
(254,557 |
) |
Repurchases of convertible notes |
|
— |
|
|
|
— |
|
|
|
(859,042 |
) |
|
|
— |
|
Other |
|
— |
|
|
|
— |
|
|
|
(1,799 |
) |
|
|
— |
|
Net cash provided by (used in) financing activities |
|
10,304 |
|
|
|
(10,436 |
) |
|
|
(428,624 |
) |
|
|
(254,141 |
) |
Change in cash, cash equivalents, and restricted cash |
|
(96,635 |
) |
|
|
(29,263 |
) |
|
|
(814,069 |
) |
|
|
(224,363 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
1,065,028 |
|
|
|
1,228,676 |
|
|
|
1,782,462 |
|
|
|
1,423,776 |
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
968,393 |
|
|
$ |
1,199,413 |
|
|
$ |
968,393 |
|
|
$ |
1,199,413 |
|
CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts, unaudited) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Revenue |
$ |
1,372,574 |
|
|
$ |
1,188,551 |
|
|
$ |
3,804,115 |
|
|
$ |
3,244,828 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of revenue |
|
638,907 |
|
|
|
555,753 |
|
|
|
1,802,577 |
|
|
|
1,492,613 |
|
Research and development |
|
412,791 |
|
|
|
494,559 |
|
|
|
1,268,746 |
|
|
|
1,427,334 |
|
Sales and marketing |
|
273,107 |
|
|
|
297,251 |
|
|
|
815,461 |
|
|
|
846,281 |
|
General and administrative |
|
220,979 |
|
|
|
221,051 |
|
|
|
677,748 |
|
|
|
628,266 |
|
Total costs and expenses |
|
1,545,784 |
|
|
|
1,568,614 |
|
|
|
4,564,532 |
|
|
|
4,394,494 |
|
Operating loss |
|
(173,210 |
) |
|
|
(380,063 |
) |
|
|
(760,417 |
) |
|
|
(1,149,666 |
) |
Interest income |
|
38,533 |
|
|
|
43,839 |
|
|
|
114,893 |
|
|
|
124,931 |
|
Interest expense |
|
(5,883 |
) |
|
|
(5,521 |
) |
|
|
(15,739 |
) |
|
|
(16,749 |
) |
Other income (expense), net |
|
(4,355 |
) |
|
|
(20,662 |
) |
|
|
(25,228 |
) |
|
|
(7,967 |
) |
Loss before income taxes |
|
(144,915 |
) |
|
|
(362,407 |
) |
|
|
(686,491 |
) |
|
|
(1,049,451 |
) |
Income tax benefit (expense) |
|
(8,332 |
) |
|
|
(5,849 |
) |
|
|
(20,466 |
) |
|
|
(24,787 |
) |
Net loss |
$ |
(153,247 |
) |
|
$ |
(368,256 |
) |
|
$ |
(706,957 |
) |
|
$ |
(1,074,238 |
) |
Net loss per share attributable to Class A, Class B, and Class C common stockholders: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.09 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.67 |
) |
Diluted |
$ |
(0.09 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.67 |
) |
Weighted average shares used in computation of net loss per share: |
|
|
|
|
|
|
|
||||||||
Basic |
|
1,663,011 |
|
|
|
1,625,917 |
|
|
|
1,651,756 |
|
|
|
1,603,672 |
|
Diluted |
|
1,663,011 |
|
|
|
1,625,917 |
|
|
|
1,651,756 |
|
|
|
1,603,672 |
|
CONSOLIDATED BALANCE SHEETS (in thousands, except par value) |
|||||||
|
|
|
|
||||
|
(unaudited) |
|
|
||||
Assets |
|
|
|
||||
Current assets |
|
|
|
||||
Cash and cash equivalents |
$ |
964,967 |
|
|
$ |
1,780,400 |
|
Marketable securities |
|
2,227,162 |
|
|
|
1,763,680 |
|
Accounts receivable, net of allowance |
|
1,195,701 |
|
|
|
1,278,176 |
|
Prepaid expenses and other current assets |
|
200,902 |
|
|
|
153,587 |
|
Total current assets |
|
4,588,732 |
|
|
|
4,975,843 |
|
Property and equipment, net |
|
466,397 |
|
|
|
410,326 |
|
Operating lease right-of-use assets |
|
516,959 |
|
|
|
516,862 |
|
Intangible assets, net |
|
98,920 |
|
|
|
146,303 |
|
|
|
1,693,946 |
|
|
|
1,691,827 |
|
Other assets |
|
226,463 |
|
|
|
226,597 |
|
Total assets |
$ |
7,591,417 |
|
|
$ |
7,967,758 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Current liabilities |
|
|
|
||||
Accounts payable |
$ |
157,471 |
|
|
$ |
278,961 |
|
Operating lease liabilities |
|
21,311 |
|
|
|
49,321 |
|
Accrued expenses and other current liabilities |
|
921,393 |
|
|
|
805,836 |
|
Convertible senior notes, net |
|
36,191 |
|
|
|
— |
|
Total current liabilities |
|
1,136,366 |
|
|
|
1,134,118 |
|
Long-term convertible senior notes, net |
|
3,605,137 |
|
|
|
3,749,400 |
|
Operating lease liabilities, noncurrent |
|
577,912 |
|
|
|
546,279 |
|
Other liabilities |
|
61,927 |
|
|
|
123,849 |
|
Total liabilities |
|
5,381,342 |
|
|
|
5,553,646 |
|
Commitments and contingencies |
|
|
|
||||
Stockholders’ equity |
|
|
|
||||
Class A non-voting common stock, |
|
14 |
|
|
|
14 |
|
Class B voting common stock, |
|
— |
|
|
|
— |
|
Class C voting common stock, |
|
2 |
|
|
|
2 |
|
|
|
(465,502 |
) |
|
|
(479,903 |
) |
Additional paid-in capital |
|
15,391,284 |
|
|
|
14,613,404 |
|
Accumulated deficit |
|
(12,744,562 |
) |
|
|
(11,726,536 |
) |
Accumulated other comprehensive income (loss) |
|
28,839 |
|
|
|
7,131 |
|
Total stockholders’ equity |
|
2,210,075 |
|
|
|
2,414,112 |
|
Total liabilities and stockholders’ equity |
$ |
7,591,417 |
|
|
$ |
7,967,758 |
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in thousands, unaudited) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Free Cash Flow reconciliation: |
|
|
|
|
|
|
|
||||||||
Net cash provided by (used in) operating activities |
$ |
115,872 |
|
|
$ |
12,781 |
|
|
$ |
182,847 |
|
|
$ |
81,947 |
|
Less: |
|
|
|
|
|
|
|
||||||||
Purchases of property and equipment |
|
(44,041 |
) |
|
|
(73,435 |
) |
|
|
(146,551 |
) |
|
|
(158,008 |
) |
Free Cash Flow |
$ |
71,831 |
|
|
$ |
(60,654 |
) |
|
$ |
36,296 |
|
|
$ |
(76,061 |
) |
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Adjusted EBITDA reconciliation: |
|
|
|
|
|
|
|
||||||||
Net loss |
$ |
(153,247 |
) |
|
$ |
(368,256 |
) |
|
$ |
(706,957 |
) |
|
$ |
(1,074,238 |
) |
Add (deduct): |
|
|
|
|
|
|
|
||||||||
Interest income |
|
(38,533 |
) |
|
|
(43,839 |
) |
|
|
(114,893 |
) |
|
|
(124,931 |
) |
Interest expense |
|
5,883 |
|
|
|
5,521 |
|
|
|
15,739 |
|
|
|
16,749 |
|
Other (income) expense, net |
|
4,355 |
|
|
|
20,662 |
|
|
|
25,228 |
|
|
|
7,967 |
|
Income tax (benefit) expense |
|
8,332 |
|
|
|
5,849 |
|
|
|
20,466 |
|
|
|
24,787 |
|
Depreciation and amortization |
|
38,850 |
|
|
|
41,209 |
|
|
|
114,878 |
|
|
|
116,117 |
|
Stock-based compensation expense |
|
260,229 |
|
|
|
353,846 |
|
|
|
773,890 |
|
|
|
986,720 |
|
Payroll and other tax expense related to stock-based compensation |
|
6,093 |
|
|
|
6,463 |
|
|
|
32,196 |
|
|
|
30,618 |
|
Restructuring charges (1) |
|
— |
|
|
|
18,639 |
|
|
|
72,051 |
|
|
|
18,639 |
|
Adjusted EBITDA |
$ |
131,962 |
|
|
$ |
40,094 |
|
|
$ |
232,598 |
|
|
$ |
2,428 |
|
(1) |
Restructuring charges during 2024 are primarily related to cash severance, stock-based compensation expense, and other charges associated with the 2024 restructuring. Restructuring charges during 2023 are primarily related to cash severance and stock-based compensation expense associated with the wind down of our AR Enterprise business. These charges are not reflective of underlying trends in our business. |
Total depreciation and amortization expense by function: |
|||||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Depreciation and amortization expense (1): |
|
|
|
|
|
|
|
||||
Cost of revenue |
$ |
965 |
|
$ |
3,184 |
|
$ |
4,987 |
|
$ |
9,580 |
Research and development |
|
24,798 |
|
|
26,252 |
|
|
75,305 |
|
|
75,238 |
Sales and marketing |
|
4,953 |
|
|
5,466 |
|
|
14,614 |
|
|
16,144 |
General and administrative |
|
8,134 |
|
|
6,307 |
|
|
23,587 |
|
|
15,155 |
Total |
$ |
38,850 |
|
$ |
41,209 |
|
$ |
118,493 |
|
$ |
116,117 |
(1) |
Depreciation and amortization expense for the nine months ended |
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
|
|
Nine Months Ended
|
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Stock-based compensation expense (1): |
|
|
|
|
|
|
|
||||
Cost of revenue |
$ |
1,333 |
|
$ |
2,640 |
|
$ |
4,408 |
|
$ |
6,890 |
Research and development |
|
172,516 |
|
|
234,615 |
|
|
518,500 |
|
|
672,030 |
Sales and marketing |
|
53,345 |
|
|
72,783 |
|
|
160,209 |
|
|
185,319 |
General and administrative |
|
33,035 |
|
|
47,895 |
|
|
100,175 |
|
|
126,568 |
Total |
$ |
260,229 |
|
$ |
357,933 |
|
$ |
783,292 |
|
$ |
990,807 |
(1) |
Stock-based compensation expense for the nine months ended |
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
Non-GAAP net income (loss) reconciliation: |
|
|
|
|
|
|
|
||||||||
Net loss |
$ |
(153,247 |
) |
|
$ |
(368,256 |
) |
|
$ |
(706,957 |
) |
|
$ |
(1,074,238 |
) |
Amortization of intangible assets |
|
13,889 |
|
|
|
19,134 |
|
|
|
44,282 |
|
|
|
55,294 |
|
Stock-based compensation expense |
|
260,229 |
|
|
|
353,846 |
|
|
|
773,890 |
|
|
|
986,720 |
|
Payroll and other tax expense related to stock-based compensation |
|
6,093 |
|
|
|
6,463 |
|
|
|
32,196 |
|
|
|
30,618 |
|
Restructuring charges (1) |
|
— |
|
|
|
18,639 |
|
|
|
72,051 |
|
|
|
18,639 |
|
Income tax adjustments |
|
(1,858 |
) |
|
|
(573 |
) |
|
|
(7,877 |
) |
|
|
(810 |
) |
Non-GAAP net income (loss) |
$ |
125,106 |
|
|
$ |
29,253 |
|
|
$ |
207,585 |
|
|
$ |
16,223 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average common shares - Diluted |
|
1,663,011 |
|
|
|
1,625,917 |
|
|
|
1,651,756 |
|
|
|
1,603,672 |
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP diluted net income (loss) per share reconciliation: |
|
|
|
|
|
|
|
||||||||
Diluted net loss per share |
$ |
(0.09 |
) |
|
$ |
(0.23 |
) |
|
$ |
(0.43 |
) |
|
$ |
(0.67 |
) |
Non-GAAP adjustment to net loss |
|
0.17 |
|
|
|
0.25 |
|
|
|
0.56 |
|
|
|
0.68 |
|
Non-GAAP diluted net income (loss) per share |
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
0.13 |
|
|
$ |
0.01 |
|
(1) |
Restructuring charges during 2024 are primarily related to cash severance, stock-based compensation expense, and other charges associated with the 2024 restructuring. Restructuring charges during 2023 are primarily related to cash severance and stock-based compensation expense associated with the wind down of our AR Enterprise business. These charges are not reflective of underlying trends in our business. |
SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS (dollars and shares in thousands, except per user amounts, unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Q2 2023 |
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
(NM = Not Meaningful) |
||||||||||||||||||||||
Cash Flows and Shares |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided by (used in) operating activities |
$ |
(81,936 |
) |
|
$ |
12,781 |
|
|
$ |
164,574 |
|
|
$ |
88,352 |
|
|
$ |
(21,377 |
) |
|
$ |
115,872 |
|
Net cash provided by (used in) operating activities - YoY (year-over-year) |
|
34 |
% |
|
|
(77 |
)% |
|
|
31 |
% |
|
|
(42 |
)% |
|
|
74 |
% |
|
|
NM |
|
Net cash provided by (used in) operating activities - TTM (trailing twelve months) |
$ |
250,402 |
|
|
$ |
207,238 |
|
|
$ |
246,521 |
|
|
$ |
183,771 |
|
|
$ |
244,330 |
|
|
$ |
347,421 |
|
Purchases of property and equipment |
$ |
(36,943 |
) |
|
$ |
(73,435 |
) |
|
$ |
(53,719 |
) |
|
$ |
(50,448 |
) |
|
$ |
(52,062 |
) |
|
$ |
(44,041 |
) |
Purchases of property and equipment - YoY |
|
58 |
% |
|
|
94 |
% |
|
|
14 |
% |
|
|
6 |
% |
|
|
41 |
% |
|
|
(40 |
)% |
Purchases of property and equipment - TTM |
$ |
(169,334 |
) |
|
$ |
(204,933 |
) |
|
$ |
(211,727 |
) |
|
$ |
(214,545 |
) |
|
$ |
(229,664 |
) |
|
$ |
(200,270 |
) |
Free Cash Flow |
$ |
(118,879 |
) |
|
$ |
(60,654 |
) |
|
$ |
110,855 |
|
|
$ |
37,904 |
|
|
$ |
(73,439 |
) |
|
$ |
71,831 |
|
Free Cash Flow - YoY |
|
19 |
% |
|
|
(435 |
)% |
|
|
41 |
% |
|
|
(63 |
)% |
|
|
38 |
% |
|
|
218 |
% |
Free Cash Flow - TTM |
$ |
81,068 |
|
|
$ |
2,305 |
|
|
$ |
34,794 |
|
|
$ |
(30,774 |
) |
|
$ |
14,666 |
|
|
$ |
147,151 |
|
Common shares outstanding |
|
1,616,119 |
|
|
|
1,638,905 |
|
|
|
1,645,496 |
|
|
|
1,643,120 |
|
|
|
1,653,820 |
|
|
|
1,672,212 |
|
Common shares outstanding - YoY |
|
(2 |
)% |
|
|
2 |
% |
|
|
5 |
% |
|
|
3 |
% |
|
|
2 |
% |
|
|
2 |
% |
Shares underlying stock-based awards |
|
149,065 |
|
|
|
154,525 |
|
|
|
157,981 |
|
|
|
146,240 |
|
|
|
144,315 |
|
|
|
132,783 |
|
Shares underlying stock-based awards - YoY |
|
62 |
% |
|
|
63 |
% |
|
|
20 |
% |
|
|
14 |
% |
|
|
(3 |
)% |
|
|
(14 |
)% |
Total common shares outstanding plus shares underlying stock-based awards |
|
1,765,184 |
|
|
|
1,793,430 |
|
|
|
1,803,477 |
|
|
|
1,789,360 |
|
|
|
1,798,135 |
|
|
|
1,804,995 |
|
Total common shares outstanding plus shares underlying stock-based awards - YoY |
|
2 |
% |
|
|
5 |
% |
|
|
6 |
% |
|
|
4 |
% |
|
|
2 |
% |
|
|
1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Results of Operations |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue |
$ |
1,067,669 |
|
|
$ |
1,188,551 |
|
|
$ |
1,361,287 |
|
|
$ |
1,194,773 |
|
|
$ |
1,236,768 |
|
|
$ |
1,372,574 |
|
Revenue - YoY |
|
(4 |
)% |
|
|
5 |
% |
|
|
5 |
% |
|
|
21 |
% |
|
|
16 |
% |
|
|
15 |
% |
Revenue - TTM |
$ |
4,484,488 |
|
|
$ |
4,544,563 |
|
|
$ |
4,606,115 |
|
|
$ |
4,812,280 |
|
|
$ |
4,981,379 |
|
|
$ |
5,165,402 |
|
Revenue by region (1) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
$ |
686,829 |
|
|
$ |
786,154 |
|
|
$ |
899,542 |
|
|
$ |
743,131 |
|
|
$ |
767,560 |
|
|
$ |
857,621 |
|
|
|
(13 |
)% |
|
|
(3 |
)% |
|
|
2 |
% |
|
|
16 |
% |
|
|
12 |
% |
|
|
9 |
% |
|
$ |
3,018,637 |
|
|
$ |
2,993,189 |
|
|
$ |
3,012,421 |
|
|
$ |
3,115,656 |
|
|
$ |
3,196,387 |
|
|
$ |
3,267,854 |
|
|
$ |
182,109 |
|
|
$ |
200,272 |
|
|
$ |
238,253 |
|
|
$ |
195,844 |
|
|
$ |
229,835 |
|
|
$ |
248,902 |
|
|
|
7 |
% |
|
|
24 |
% |
|
|
9 |
% |
|
|
24 |
% |
|
|
26 |
% |
|
|
24 |
% |
|
$ |
719,817 |
|
|
$ |
758,693 |
|
|
$ |
778,394 |
|
|
$ |
816,478 |
|
|
$ |
864,204 |
|
|
$ |
912,834 |
|
Rest of World |
$ |
198,731 |
|
|
$ |
202,125 |
|
|
$ |
223,492 |
|
|
$ |
255,798 |
|
|
$ |
239,373 |
|
|
$ |
266,051 |
|
Rest of World - YoY |
|
28 |
% |
|
|
30 |
% |
|
|
11 |
% |
|
|
34 |
% |
|
|
20 |
% |
|
|
32 |
% |
Rest of World - TTM |
$ |
746,034 |
|
|
$ |
792,681 |
|
|
$ |
815,300 |
|
|
$ |
880,146 |
|
|
$ |
920,788 |
|
|
$ |
984,714 |
|
Operating loss |
$ |
(404,339 |
) |
|
$ |
(380,063 |
) |
|
$ |
(248,713 |
) |
|
$ |
(333,232 |
) |
|
$ |
(253,975 |
) |
|
$ |
(173,210 |
) |
Operating loss - YoY |
|
(1 |
)% |
|
|
13 |
% |
|
|
14 |
% |
|
|
9 |
% |
|
|
37 |
% |
|
|
54 |
% |
Operating loss - Margin |
|
(38 |
)% |
|
|
(32 |
)% |
|
|
(18 |
)% |
|
|
(28 |
)% |
|
|
(21 |
)% |
|
|
(13 |
)% |
Operating loss - TTM |
$ |
(1,492,442 |
) |
|
$ |
(1,437,263 |
) |
|
$ |
(1,398,379 |
) |
|
$ |
(1,366,347 |
) |
|
$ |
(1,215,983 |
) |
|
$ |
(1,009,130 |
) |
Net income (loss) |
$ |
(377,308 |
) |
|
$ |
(368,256 |
) |
|
$ |
(248,247 |
) |
|
$ |
(305,090 |
) |
|
$ |
(248,620 |
) |
|
$ |
(153,247 |
) |
Net income (loss) - YoY |
|
11 |
% |
|
|
(2 |
)% |
|
|
14 |
% |
|
|
7 |
% |
|
|
34 |
% |
|
|
58 |
% |
Net income (loss) - Margin |
|
(35 |
)% |
|
|
(31 |
)% |
|
|
(18 |
)% |
|
|
(26 |
)% |
|
|
(20 |
)% |
|
|
(11 |
)% |
Net income (loss) - TTM |
$ |
(1,353,944 |
) |
|
$ |
(1,362,698 |
) |
|
$ |
(1,322,485 |
) |
|
$ |
(1,298,901 |
) |
|
$ |
(1,170,213 |
) |
|
$ |
(955,204 |
) |
Adjusted EBITDA |
$ |
(38,479 |
) |
|
$ |
40,094 |
|
|
$ |
159,149 |
|
|
$ |
45,659 |
|
|
$ |
54,977 |
|
|
$ |
131,962 |
|
Adjusted EBITDA - YoY |
|
(635 |
)% |
|
|
(45 |
)% |
|
|
(32 |
)% |
|
|
NM |
|
|
|
243 |
% |
|
|
229 |
% |
Adjusted EBITDA - Margin (2) |
|
(4 |
)% |
|
|
3 |
% |
|
|
12 |
% |
|
|
4 |
% |
|
|
4 |
% |
|
|
10 |
% |
Adjusted EBITDA - TTM |
$ |
268,249 |
|
|
$ |
235,703 |
|
|
$ |
161,577 |
|
|
$ |
206,423 |
|
|
$ |
299,879 |
|
|
$ |
391,747 |
|
(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. |
SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS (continued) (dollars and shares in thousands, except per user amounts, unaudited) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Q2 2023 |
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
||||||||||||
Other |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
DAU (in millions) (1) |
|
397 |
|
|
|
406 |
|
|
|
414 |
|
|
|
422 |
|
|
|
432 |
|
|
|
443 |
|
DAU - YoY |
|
14 |
% |
|
|
12 |
% |
|
|
10 |
% |
|
|
10 |
% |
|
|
9 |
% |
|
|
9 |
% |
DAU by region (in millions) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
101 |
|
|
|
101 |
|
|
|
100 |
|
|
|
100 |
|
|
|
100 |
|
|
|
100 |
|
|
|
2 |
% |
|
|
1 |
% |
|
|
— |
% |
|
|
(1 |
)% |
|
|
— |
% |
|
|
— |
% |
|
|
94 |
|
|
|
95 |
|
|
|
96 |
|
|
|
96 |
|
|
|
97 |
|
|
|
99 |
|
|
|
9 |
% |
|
|
7 |
% |
|
|
4 |
% |
|
|
4 |
% |
|
|
3 |
% |
|
|
4 |
% |
Rest of World |
|
202 |
|
|
|
211 |
|
|
|
218 |
|
|
|
226 |
|
|
|
235 |
|
|
|
244 |
|
Rest of World - YoY |
|
25 |
% |
|
|
21 |
% |
|
|
19 |
% |
|
|
19 |
% |
|
|
16 |
% |
|
|
16 |
% |
ARPU |
$ |
2.69 |
|
|
$ |
2.93 |
|
|
$ |
3.29 |
|
|
$ |
2.83 |
|
|
$ |
2.86 |
|
|
$ |
3.10 |
|
ARPU - YoY |
|
(16 |
)% |
|
|
(6 |
)% |
|
|
(5 |
)% |
|
|
10 |
% |
|
|
6 |
% |
|
|
6 |
% |
ARPU by region |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
$ |
6.83 |
|
|
$ |
7.82 |
|
|
$ |
8.96 |
|
|
$ |
7.44 |
|
|
$ |
7.67 |
|
|
$ |
8.54 |
|
|
|
(14 |
)% |
|
|
(4 |
)% |
|
|
2 |
% |
|
|
17 |
% |
|
|
12 |
% |
|
|
9 |
% |
|
$ |
1.93 |
|
|
$ |
2.11 |
|
|
$ |
2.49 |
|
|
$ |
2.04 |
|
|
$ |
2.36 |
|
|
$ |
2.52 |
|
|
|
(2 |
)% |
|
|
15 |
% |
|
|
5 |
% |
|
|
20 |
% |
|
|
22 |
% |
|
|
19 |
% |
Rest of World |
$ |
0.98 |
|
|
$ |
0.96 |
|
|
$ |
1.03 |
|
|
$ |
1.13 |
|
|
$ |
1.02 |
|
|
$ |
1.09 |
|
Rest of World - YoY |
|
3 |
% |
|
|
8 |
% |
|
|
(7 |
)% |
|
|
13 |
% |
|
|
4 |
% |
|
|
14 |
% |
Employees (full-time; excludes part-time, contractors, and temporary personnel) |
|
5,286 |
|
|
|
5,367 |
|
|
|
5,289 |
|
|
|
4,835 |
|
|
|
4,719 |
|
|
|
4,800 |
|
Employees - YoY |
|
(18 |
)% |
|
|
(6 |
)% |
|
|
— |
% |
|
|
(7 |
)% |
|
|
(11 |
)% |
|
|
(11 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Depreciation and amortization expense |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue |
$ |
3,170 |
|
|
$ |
3,184 |
|
|
$ |
3,171 |
|
|
$ |
2,150 |
|
|
$ |
1,872 |
|
|
$ |
965 |
|
Research and development |
|
24,847 |
|
|
|
26,252 |
|
|
|
31,040 |
|
|
|
27,598 |
|
|
|
22,909 |
|
|
|
24,798 |
|
Sales and marketing |
|
5,605 |
|
|
|
5,466 |
|
|
|
10,017 |
|
|
|
4,577 |
|
|
|
5,084 |
|
|
|
4,953 |
|
General and administrative |
|
6,066 |
|
|
|
6,307 |
|
|
|
8,096 |
|
|
|
7,388 |
|
|
|
8,065 |
|
|
|
8,134 |
|
Total |
$ |
39,688 |
|
|
$ |
41,209 |
|
|
$ |
52,324 |
|
|
$ |
41,713 |
|
|
$ |
37,930 |
|
|
$ |
38,850 |
|
Depreciation and amortization expense - YoY |
|
(50 |
)% |
|
|
14 |
% |
|
|
8 |
% |
|
|
18 |
% |
|
|
(4 |
)% |
|
|
(6 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenue |
$ |
2,365 |
|
|
$ |
2,640 |
|
|
$ |
2,665 |
|
|
$ |
1,815 |
|
|
$ |
1,260 |
|
|
$ |
1,333 |
|
Research and development |
|
217,565 |
|
|
|
234,615 |
|
|
|
220,996 |
|
|
|
174,519 |
|
|
|
171,465 |
|
|
|
172,516 |
|
Sales and marketing |
|
57,597 |
|
|
|
72,783 |
|
|
|
70,369 |
|
|
|
54,656 |
|
|
|
52,208 |
|
|
|
53,345 |
|
General and administrative |
|
40,416 |
|
|
|
47,895 |
|
|
|
39,167 |
|
|
|
32,762 |
|
|
|
34,378 |
|
|
|
33,035 |
|
Total |
$ |
317,943 |
|
|
$ |
357,933 |
|
|
$ |
333,197 |
|
|
$ |
263,752 |
|
|
$ |
259,311 |
|
|
$ |
260,229 |
|
Stock-based compensation expense - YoY |
|
— |
% |
|
|
4 |
% |
|
|
(26 |
)% |
|
|
(16 |
)% |
|
|
(18 |
)% |
|
|
(27 |
)% |
(1) |
Numbers may not foot due to rounding. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241029506113/en/
Investors and Analysts:
ir@snap.com
Press:
press@snap.com
Source: