Snap Inc. · NYSE:SNAP
Snap — Q4 2019 Earnings Presentation
19 slides from Snap's earnings presentation, Feb 4, 2020
Slide 1: Q4 and Full Year 2019 Earnings Slides
Q4 and Full Year 2019 Earnings Slides February 4, 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: Fourth Quarter Financial Highlights
Fourth Quarter Financial Highlights • Revenue increased 44% YoY to $561 million. Revenue • Average revenue per user increased 23% YoY to $2.58. • Gross margin1 increased to 56%, compared to 48% in Q4 2018. • Operating margin improved to (45)%, compared to (50)% in Q4 2018. Operating • Net loss incre
Slide 4: Business Highlights
Business Highlights In 2019, we added 31 million Daily Active Users and saw increased engagement across key metrics: • DAUs were 218 million in Q4 2019, an increase of 31 million or 17% year-over-year. • DAUs increased sequentially and year-over-year in each of North America, Europe, and Rest of Wor
Slide 5: Business Highlights
Business Highlights We strengthened our ad platform products and capabilities to drive improved outcomes for advertisers: • Revenue from Commercials more than tripled year-over-year in Q4 2019. • Revenue from Story Ads doubled year-over-year in Q4 2019. • We announced that McDonald’s and Coca-Cola a
Slide 6: Revenue by Geography
Revenue by Geography (in millions, unaudited) GLOBAL NORTH AMERICA1 +44% +42% 561 446 390 388 382 298 320 316 269 260 207 226 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 EUROPE2 REST OF WORLD +47% +49% 92 69 87 50 62 61 58 67 62 47 40 47 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'1
Slide 7: Average Daily Active Users (DAU)
Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL NORTH AMERICA1 +17% +9% 210 218 190 203 83 84 86 186 186 79 79 80 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 EUROPE2 REST OF WORLD +12% +36% 64 65 67 61 64 59 60 61 56 47 47 49 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19
Slide 8: Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) (unaudited) GLOBAL NORTH AMERICA1 +23% +31% $4.42 $2.58 $3.75 $3.38 $2.09 $2.12 $3.14 $1.91 $2.62 $2.81 $1.60 $1.68 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 EUROPE2 REST OF WORLD +31% +9% $1.37 $1.35 $1.04 $1.05 $1.24 $1.20 $0.95 $1.01 $
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 +22% 64% 61% $247 $217 $33 54 % $208 52% $202 49% $191 $196 $26 $24 44% $28 $25 $58 $25 $37 $45 $26 $39 $35 $146 $146 $157 $140 $134 $136 Q3'18
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 +14% 82% 77% $271 $271 $259 67% $246 $238 $248 61% 61% $83 $81 $87 $82 $82 48% $80 $96 $96 $68 $75 $81 $75
Slide 11: Net Loss & Adjusted EBITDA
Net Loss1 & Adjusted EBITDA2 (dollars in millions, unaudited) NET LOSS ADJUSTED EBITDA Operating Margin Adjusted EBITDA Margin3 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 $42 8% (45)% (13)% (9)% (50)% (51)% (20)% $(42) $(50) (79)% (46)% (39)% $(79) (99)% (109)% $(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: Free Cash Flow
Free Cash Flow1 (in millions, unaudited) Cash Used in Operating Activities Capital Expenditures Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 $(66) $(67) $(76) $(96) $(126) $(133) $(12) $(9) $(8) $(78) $(76) $(84) $(8) $(103) $(23) $(26) $(149) $(159) YoY Change 28% 25% 71% 56% 47% 49% Numbers throughout pres
Slide 14: Financial Guidance
Financial Guidance The following forward-looking statements reflect our expectations for the first quarter of 2020 as of February 4, 2020, and are subject to substantial uncertainty. This guidance assumes constant foreign currency rates, and among other things, that no business acquisitions, investm
Slide 15: Appendix
Appendix
Slide 16: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation (in thousands, unaudited) 1 We define Free Cash Flow as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. 2 We define Adjusted EBITDA as net income (loss), excluding interest income; interest expense; other
Slide 17: Non-GAAP Financial Measures Reconciliation (Continued)
Non-GAAP Financial Measures Reconciliation (Continued) (in thousands, except per share amounts, unaudited) 1 We define Non-GAAP Net income (loss) as net income (loss); excluding amortization of intangible assets; stock-based compensation expense and related payroll tax expense; certain other non-cas
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