Slide 1: Q2 2023 Earnings Slides
Q2 2023 Earnings Slides July 25, 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: Second Quarter Financial Summary
Second Quarter Financial Summary • Revenue was $1,068 million in Q2 2023, compared to $1,111 million in Q2 2022, a decrease of 4% year-over-year. On a constant currency basis1 to account for changes in foreign exchange rates, the decrease was approximately 4% year-over-year. Revenue • Average revenu
Slide 4: Business Highlights
Business Highlights We grew and deepened our engagement with our community: • DAUs were 397 million in Q2 2023, an increase of 50 million, or 14% year-over-year. • DAUs increased sequentially and year-over-year in each of North America, Europe, and Rest of World. • Total time spent watching Spotligh
Slide 5: Business Highlights (Continued)
Business Highlights (Continued) We are focused on accelerating and diversifying our revenue growth: • We are seeing significant adoption of our new 7/0 Pixel Purchase optimization model, which contributed to a more than 40% quarter-over-quarter increase in 7/0 Pixel Purchase conversions. • The combi
Slide 6: Business Highlights (Continued)
Business Highlights (Continued) We invested in our augmented reality platform: • We launched Lens Performance Toolkit in Lens Studio, which offers developers a dashboard view of performance-related metrics for Lenses that are in development. • We introduced ML Retouch, our newest retouch feature pow
Slide 7: Average Daily Active Users (DAU)
Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL NORTH AMERICA1 + 14% + 2% 383 397 98 99 100 100 100 101 363 375 332 347 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 EUROPE2 REST OF WORLD + 9% + 25% 92 93 94 86 88 84 202 183 190 175 162 150 Q1'22 Q2'22 Q3'2
Slide 8: Revenue by Geography
Revenue by Geography (in millions, unaudited) GLOBAL NORTH AMERICA1 - 4% - 13% $1,300 $880 $786 $812 $1,111 $1,128 $758 $1,063 $1,068 $687 $989 $640 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 EUROPE2 REST OF WORLD + 7% + 28% $219 $201 $191 $199 $182 $162 $170 $161 $158 $
Slide 9: Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) (unaudited) GLOBAL NORTH AMERICA1 - 16% - 14% $3.47 $8.77 $3.20 $3.20 $3.11 $7.77 $7.93 $8.13 $2.58 $2.69 $6.83 $6.37 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 EUROPE2 REST OF WORLD - 2% + 3% $2.38 $1.10 $1.93 $1.98 $1.93 $0.96 $1.00 $0.9
Slide 10: 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 + 12% $491 $468 64% $438 $446 $435 61% 61% 61% $413 $142
Slide 11: 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 + 2 PPT - 8% $665 54% $615 $610 $599 $586 46% $199 $553 4
Slide 12: 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% (34)% (32)% (33)% $73 (35)% $64 (38)% 6% $7 6% $1 $(288) 1% 0.1% $(329) $(360) $(360) $(377) (4)% $(422) $(38) Q1'22 Q2'22 Q3'22 Q
Slide 13: 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 14: 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 $106 $103 $127 $125 $78 $56 $18 $(82) $(119) $(124) $(147) Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Capex $(21) $(23) $(38) $(47) $(48) $(37) YoY Change (16)% (27
Slide 15: Q3 Outlook
Q3 Outlook As we enter Q3, we anticipate continued robust growth in our global community and, as a result, our financial guidance for Q3 is built on the assumption that DAU will reach 405 million to 406 million in Q3. From a revenue perspective, our business remains in a period of rapid transition a
Slide 16: Appendix
Appendix
Slide 17: Non-GAAP Financial Measures Reconciliation – Quarterly
Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 Adjusted EBITDA Reconciliation Net income (loss) $ (359,624) $ (422,067) $ (359,502) $ (288,460) $ (328,6
Slide 18: Non-GAAP Financial Measures Reconciliation – Quarterly
Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 Non-GAAP net income (loss) reconciliation Net income (loss) $ (359,624) $ (422,067) $ (359,502) $ (288,46
Slide 19: 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 20: 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