Slide 1: Q2 2020 Earnings Slides
Q2 2020 Earnings Slides July 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: Second Quarter Financial Highlights
Second Quarter Financial Highlights • Revenue increased 17% YoY to $454 million. Revenue • Average revenue per user remained flat YoY at $1.91. • Gross margin1 improved to 47%, compared to 46% in Q2 2019. • Operating margin improved to (68)%, compared to (79)% in Q2 2019. Operating • Net loss was $(
Slide 4: Business Highlights
Business Highlights Daily Active Users grew by 17% year-over-year and we saw increased engagement across key metrics: • DAUs were 238 million in Q2 2020, an increase of 35 million or 17% year-over-year. • DAUs increased sequentially and year-over-year in each of North America, Europe, and Rest of Wo
Slide 5: Business Highlights (Continued)
Business Highlights (Continued) We continue to invest in our camera and augmented reality platforms: • On average, over 180 million Snapchatters engaged with augmented reality daily in Q2 2020. • We’ve added new camera partners, such as PlantSnap, Dog Scanner, and Nutrition Scanner to provide more e
Slide 6: Business Highlights (Continued)
Business Highlights (Continued) We continue to innovate to better serve our large and engaged community: • We introduced Snap Minis, bite-sized utilities made to be shared between friends and integrated into conversations. Our most recent Mini partners include Headspace, Atom Tickets, and Tembo. • W
Slide 7: Revenue by Geography
Revenue by Geography (in millions, unaudited) GLOBAL NORTH AMERICA1 +17% +18% 561 446 462 454 388 320 382 316 316 307 260 226 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 EUROPE2 REST OF WORLD +30% +2% 92 69 76 79 87 61 67 62 70 69 47 47 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
Slide 8: Average Daily Active Users (DAU)
Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL NORTH AMERICA1 +17% +9% 229 238 210 218 88 90 203 83 84 86 190 80 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 EUROPE2 REST OF WORLD +12% +37% 77 71 71 65 67 70 61 64 61 64 56 49 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20
Slide 9: Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) (unaudited) GLOBAL NORTH AMERICA1 +0% +9% $4.42 $2.58 $3.75 $3.57 $3.40 $2.12 $3.14 $1.91 $2.02 $1.91 $2.81 $1.68 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 EUROPE2 REST OF WORLD +16% -25% $1.37 $1.35 $1.05 $1.09 $1.10 $1.20 $0.95 $1.01 $1
Slide 10: 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 -1 PPT Other +17% $247 $246 $243 61% 53% $217 $33 $32 $27 54 % 53% $208 49% $196 $26 $24 $52 44% $25 $58 $50 $37 $45 $35 $157 $163 $163 $136 $146 $146 Q1'19
Slide 11: 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 +19% +1 PPT $307 $298 77% $271 $271 $259 $87 67% 68% $248 64% $102 61% $83 $81 $87 $82 48% $100 $96 $93 $96 $75 $81
Slide 12: Net Loss & Adjusted EBITDA
Net Loss & Adjusted EBITDA1 (dollars in millions, unaudited) NET LOSS ADJUSTED EBITDA Operating Margin Adjusted EBITDA Margin2 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 $42 8% (45)% (51)% (9)% (20)% (18)% (21)% (62)% (68)% (39)% $(42) (79)% (99)% $(79) $(81) $(96) $(123
Slide 13: 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 14: 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 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 $6 $(11) $(5) $(66) $(67) $(67) $(76) $(96) $(12) $(9) $(16) $(8) $(76) $(78) $(84) $(82) $(8) $(103) FCF YoY Change 71% 56% 47% 4
Slide 15: 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 third quarter of 2020. 15
Slide 16: Appendix
Appendix
Slide 17: 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 18: 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 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 Daily Active Users for a particular quarter by adding the number of DAUs on each day
Slide 20: 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