Slide 1: Q1 2020 Earnings Slides
Q1 2020 Earnings Slides April 21, 2020
Slide 2: Forward-Looking Statements & Non-GAAP Financial Measures
Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements reg
Slide 3: First Quarter Financial Highlights
First Quarter Financial Highlights • Revenue increased 44% YoY to $462 million. Revenue • Average revenue per user increased 20% YoY to $2.02. • Gross margin1 increased to 47%, compared to 39% in Q1 2019. • Operating margin improved to (62)%, compared to (99)% in Q1 2019. Operating • Net loss improv
Slide 4: Business Highlights
Business Highlights Daily Active User growth accelerated to 20% year-over-year and we saw increased engagement across key metrics: • DAUs were 229 million in Q1 2020, an increase of 39 million or 20% year-over-year. • DAUs increased sequentially and year-over-year in each of North America, Europe, a
Slide 5: Business Highlights
Business Highlights We strengthened our ad platform to drive improved outcomes for advertisers: • We have doubled the amount of money committed via upfronts from advertisers in 2020 vs. 2019. • Direct response advertising has nearly doubled as a share of our revenue over the past two years, and repr
Slide 6: Revenue by Geography
Revenue by Geography (in millions, unaudited) GLOBAL NORTH AMERICA1 +44% +40% 561 446 462 390 388 320 382 316 316 269 260 226 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 EUROPE2 REST OF WORLD +61% +49% 92 69 76 87 62 61 58 67 62 70 47 47 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'2
Slide 7: Average Daily Active Users (DAU)
Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL NORTH AMERICA1 +20% +10% 218 229 203 210 84 86 88 186 190 79 80 83 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 EUROPE2 REST OF WORLD +14% +45% 71 65 67 70 61 64 60 61 64 56 47 49 Q4'18 Q1'19 Q2'19 Q3'19 Q4'1
Slide 8: Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) (unaudited) GLOBAL NORTH AMERICA1 +20% +27% $4.42 $2.58 $3.75 $3.38 $3.57 $2.09 $2.12 $3.14 $1.91 $2.02 $2.81 $1.68 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 EUROPE2 REST OF WORLD +41% +3% $1.37 $1.35 $1.04 $1.05 $1.09 $1.24 $1.20 $0.95 $
Slide 9: Cost of Revenue
Cost of Revenue1 COST OF REVENUE AS A % OF REVENUE COST OF REVENUE COMPOSITION (in millions, unaudited) Infrastructure Cost Revenue Share Cost -8 PPTS Other +26% $247 $246 61% $217 $33 $32 54 % 53% $208 52% $202 49% $196 $26 $24 44% $28 $25 $58 $50 $37 $45 $39 $35 $157 $163 $134 $136 $146 $146 Q4'18
Slide 10: Operating Expenses
Operating Expenses1 OPERATING EXPENSES AS A % OF REVENUE OPERATING EXPENSES COMPOSITION (in millions, unaudited) Research and Development Sales and Marketing General and Administrative -13 PPTS +20% $298 77% $271 $271 $259 67% $238 $248 64% $102 61% 61% $83 $81 $87 $82 48% $80 $96 $93 $96 $75 $81 $7
Slide 11: Net Loss & Adjusted EBITDA
Net Loss & Adjusted EBITDA1 (dollars in millions, unaudited) NET LOSS ADJUSTED EBITDA Operating Margin Adjusted EBITDA Margin2 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 $42 8% (50)% (9)% (51)% (45)% (13)% (18)% (20)% (62)% (39)% $(42) (79)% $(50) $(79) $(81) (99)% $(192
Slide 12: Diluted Net Loss Per Share & Common Shares Outstanding Plus Shares Underlying Stock-Based Awards
Diluted Net Loss Per Share & Common Shares Outstanding Plus Shares Underlying Stock-Based Awards (in millions, except per share data, unaudited) DILUTED NET LOSS PER SHARE1 COMMON SHARES OUTSTANDING PLUS SHARES UNDERLYING STOCK-BASED AWARDS Common Shares Outstanding Shares Underlying Stock-Based Awa
Slide 13: Operating Cash Flow and Free Cash Flow
Operating Cash Flow and Free Cash Flow1 (in millions, unaudited) Cash Provided by (Used in) Operating Activities Capital Expenditures Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 $6 $(11) $(5) $(66) $(67) $(76) $(96) $(126) $(12) $(9) $(8) $(76) $(78) $(84) $(8) $(103) $(23) $(149) FCF YoY Change 25% 71% 56%
Slide 14: Financial Guidance
Financial Guidance Given uncertainties related to the ongoing COVID-19 pandemic and the rapidly shifting macro conditions, we are not providing our expectations for revenue or Adjusted EBITDA for the second quarter of 2020. 14
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation (in thousands, unaudited) Three Months Ended December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 Free Cash Flow Reconciliation Net cash provided by (used in) operating activities $ (126,054) $ (66,178) $ (95,78
Slide 17: Non-GAAP Financial Measures Reconciliation (Continued)
Non-GAAP Financial Measures Reconciliation (Continued) (in thousands, except per share amounts, unaudited) Three Months Ended December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 Non-GAAP net income (loss) reconciliation Net loss $ (191,668) $ (310,407)
Slide 18: Note Regarding User Metrics and Other Data
Note Regarding User Metrics and Other Data We define a Daily Active User, or DAU, as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. We calculate average Daily Active Users for a particular quarter by adding the number of DAUs on each day
Slide 19: Note Regarding User Metrics and Other Data (Continued)
Note Regarding User Metrics and Other Data (Continued) In the past we have relied on third-party analytics providers to calculate our metrics, but today we rely primarily on our analytics platform that we developed and operate. We count a DAU only when a user opens the application and only once per