Slide 1: Q3 2023 Earnings Slides
Q3 2023 Earnings Slides October 24, 2023
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: Third Quarter Financial Summary
Third Quarter Financial Summary • Revenue was $1,189 million in Q3 2023, compared to $1,128 million in Q3 2022, an increase of 5%1 year-over-year and 11% quarter-over- quarter. Revenue • Average revenue per user was $2.93 in Q3 2023, compared to $3.11 in Q3 2022. • Operating margin was (32)% in Q3 2
Slide 4: Business Highlights
Business Highlights We grew and deepened our engagement with our community: • DAUs were 406 million in Q3 2023, an increase of 43 million, or 12%, year-over-year. • Total time spent watching Spotlight increased over 200% year-over-year. • Since launching My AI, our AI-powered chatbot, over 200 milli
Slide 5: Business Highlights (Continued)
Business Highlights (Continued) We invested in our augmented reality platform: • We launched the Real-Time Neural Rendering ML Model in Lens Studio, which enables developers to build AR assets from 2D images captured on a phone. • We launched Diffuse Indirect Lighting, a new Ray Tracing feature that
Slide 6: Average Daily Active Users (DAU)
Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL NORTH AMERICA1 + 12% + 1% 397 406 99 100 100 100 101 101 363 375 383 347 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 EUROPE2 REST OF WORLD + 7% + 21% 92 93 94 95 86 88 211 202 183 190 175 162 Q2'22 Q3'22 Q4'
Slide 7: Revenue by Geography
Revenue by Geography (in millions, unaudited) GLOBAL NORTH AMERICA1 + 5% - 3% $1,300 $880 $1,189 $786 $812 $786 $1,111 $1,128 $1,068 $989 $687 $640 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 EUROPE2 REST OF WORLD + 24% + 30% $219 $200 $201 $199 $202 $182 $191 $170 $161 $
Slide 8: Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) (unaudited) GLOBAL NORTH AMERICA1 - 6% - 4% $3.47 $8.77 $3.20 $3.11 $7.93 $8.13 $7.82 $2.93 $2.58 $2.69 $6.83 $6.37 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 EUROPE2 REST OF WORLD + 15% + 8% $2.38 $2.11 $1.10 $1.98 $1.93 $0.96 $1.00 $0.98
Slide 9: Adjusted Gross Margin and Adjusted Cost of Revenue
1 Adjusted Gross Margin and Adjusted Cost of Revenue (dollars in millions, unaudited) ADJUSTED GROSS MARGIN1 ADJUSTED COST OF REVENUE1 COMPOSITION Infrastructure Costs Advertising Partner & Other Costs Content & Developer Partner Costs - 7 PPT + 23% $550 64% $491 61% 61% $468 $438 $446 $156 56% 54%
Slide 10: Adjusted Operating Expense Margin and Adjusted Operating Expenses
1 Adjusted Operating Expense Margin and Adjusted Operating Expenses (dollars in millions, unaudited) ADJUSTED OPERATING EXPENSE MARGIN1 ADJUSTED OPERATING EXPENSES1 COMPOSITION Research & Development Sales & Marketing General & Administrative + 4 PPT - 2% $665 54% $615 $610 $599 $599 50% 46% $199 $5
Slide 11: Net Income (Loss) & Adjusted EBITDA
1 Net Income (Loss) & Adjusted EBITDA (dollars in millions, unaudited) NET INCOME (LOSS) ADJUSTED EBITDA1 Net Income (Loss) Margin Adjusted EBITDA Margin2 $233 (22)% 18% (32)% (31)% $73 (33)% (35)% (38)% $7 6% $40 $(288) $1 1% 0.1% $(329) 3% $(360) $(368) $(377) (4)% $(422) $(38) Q2'22 Q3'22 Q4'22 Q
Slide 12: Diluted Net Income (Loss) Per Share & Common Shares Outstanding
Diluted Net Income (Loss) Per Share & Common Shares Outstanding Plus Shares Underlying Stock-Based Awards (in millions, except per share data, unaudited) DILUTED NET INCOME (LOSS) PER SHARE1 COMMON SHARES OUTSTANDING PLUS SHARES UNDERLYING STOCK-BASED AWARDS Common Shares Outstanding Shares Underlyi
Slide 13: Operating Cash Flow and Free Cash Flow
1 Operating Cash Flow and Free Cash Flow (in millions, unaudited) OPERATING CASH FLOW FREE CASH FLOW1 $151 $103 $125 $78 $56 $18 $13 $(61) $(82) $(119) $(124) $(147) Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Capex $(23) $(38) $(47) $(48) $(37) $(73) YoY Change (27)% (65
Slide 14: Q4 2023 Outlook
Q4 2023 Outlook As we enter Q4, we anticipate continued growth in our global community and, as a result, our financial forecast for Q4 is built on the assumption that DAU will reach 410 million to 412 million. We believe we are on the right path with our direct-response advertising platform and are
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Financial Measures Reconciliation – Quarterly
Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) Three Months Ended June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Adjusted EBITDA Reconciliation Net income (loss) $ (422,067) $ (359,502) $ (288,460) $ (328,674) $ (3
Slide 17: Non-GAAP Financial Measures Reconciliation – Quarterly
Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) Three Months Ended June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Non-GAAP net income (loss) reconciliation Net income (loss) $ (422,067) $ (359,502) $ (288,460) $ (32
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 DAUs for a particular quarter by adding the number of DAUs on each day of that quarte
Slide 19: Note Regarding User Metrics and Other Data (Continued)
Note Regarding User Metrics and Other Data (Continued) We count a DAU only when a user opens the application and only once per user per day. We believe this methodology more accurately measures our user engagement. We have multiple pipelines of user data that we use to determine whether a user has o