Slide 1: Q3 2020 Earnings Slides
Q3 2020 Earnings Slides October 20, 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: Third Quarter Financial Highlights
Third Quarter Financial Highlights • Revenue increased 52% YoY to $679 million. Revenue • Average revenue per user increased 28% YoY to $2.73. • Adjusted gross margin1 improved to 58%, compared to 51% in Q3 2019. • Operating margin improved to (25)%, compared to (51)% in Q3 2019. Operating • Net los
Slide 4: Business Highlights
Business Highlights Daily Active Users grew by 18% year-over-year and we saw increased engagement across key metrics: • DAUs were 249 million in Q3 2020, an increase of 39 million or 18% year-over-year. • DAUs increased sequentially and year-over-year on each of iOS and Android platforms. • The aver
Slide 5: Business Highlights (Continued)
Business Highlights (Continued) We continue to invest in our camera and augmented reality platforms: • As of the end of Q3 2020, over 1.5 million Lenses have been created by our community through Lens Studio. • The ‘Raise Your Voice’ Lens generated over 70 million impressions and over 48,000 hours o
Slide 6: Business Highlights (Continued)
Business Highlights (Continued) We continue to innovate to better serve our large and engaged community: • We introduced Creator Profiles to our community, providing Creators with a permanent profile to host their photo, video, and Lenses content, Story replies, and data analytics insights. • We lau
Slide 7: Revenue by Geography
Revenue by Geography (in millions, unaudited) GLOBAL NORTH AMERICA1 +52% +56% $679 $561 $493 $446 $462 $454 $382 $388 $316 $316 $307 $260 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 EUROPE2 REST OF WORLD +49% +35% $92 $102 $69 $76 $79 $87 $83 $61 $67 $62 $70 $69 Q2'19 Q3'
Slide 8: Average Daily Active Users (DAU)
Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL NORTH AMERICA1 +18% +7% 238 249 218 229 203 210 86 88 90 90 83 84 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 EUROPE2 REST OF WORLD +10% +43% 87 77 71 72 71 65 67 70 61 64 64 56 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20
Slide 9: Average Revenue Per User (ARPU)
Average Revenue Per User (ARPU) (unaudited) GLOBAL NORTH AMERICA1 +28% +46% $5.49 $2.73 $2.58 $4.42 $2.12 $2.02 $3.75 $3.57 $1.91 $1.91 $3.14 $3.40 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 EUROPE2 REST OF WORLD +36% -6% $1.37 $1.43 $1.35 $1.05 $1.09 $1.10 $1.20 $0.95 $
Slide 10: Adjusted Cost of Revenue
Adjusted Cost of Revenue1 ADJUSTED COST OF REVENUE AS A % OF REVENUE COST OF REVENUE COMPOSITION (in millions, unaudited) Infrastructure Cost Revenue Share Cost +31% -7 PPT Other $285 $36 $247 $246 $243 54% 53% 53% $217 $33 $32 $27 49% $208 44% $75 42% $26 $24 $58 $50 $52 $37 $45 $163 $163 $174 $146
Slide 11: Adjusted Operating Expenses
Adjusted Operating Expenses1 ADJUSTED OPERATING EXPENSES AS A % OF REVENUE OPERATING EXPENSES COMPOSITION (in millions, unaudited) Research and Development Sales and Marketing General and Administrative +24% -11 PPT $338 $307 67% 68% $298 64% 61% $271 $271 $91 $259 $87 $102 48% 50% $83 $81 $87 $111
Slide 12: Net Loss & Adjusted EBITDA
Net Loss & Adjusted EBITDA1 (dollars in millions, unaudited) NET LOSS ADJUSTED EBITDA Net Loss Margin Adjusted EBITDA Margin2 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 $56 $42 (29)% 8% 8% (43)% (9)% (51)% (20)% (18)% (66)% (66)% (21)% (72)% $(42) $(79) $(81) $(200) $(96
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 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 $6 $(11) $(5) $(55) $(67) $(67) $(76) $(96) $(15) $(9) $(16) $(70) $(8) $(76) $(84) $(82) $(8) $(103) FCF YoY Change 56% 47% 49% 9
Slide 15: Financial Guidance
Financial Guidance Given the uncertainties related to the ongoing COVID-19 pandemic and the rapidly shifting macro conditions, we are not providing revenue or Adjusted EBITDA guidance for the fourth quarter of 2020. 15
Slide 16: Appendix
Appendix
Slide 17: Non-GAAP Financial Measures Reconciliation
Non-GAAP Financial Measures Reconciliation (in thousands, unaudited) Three Months Ended June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 Free Cash Flow Reconciliation Net cash used in operating activities $ (95,789) $ (76,149) $ (66,842) $ 6,283 $ (6
Slide 18: Non-GAAP Financial Measures Reconciliation (Continued)
Non-GAAP Financial Measures Reconciliation (Continued) (in thousands, except per share amounts, unaudited) Three Months Ended June 30, 2019 September 30, 2019 December 31, 2019 March 31, 2020 June 30, 2020 September 30, 2020 Non-GAAP net income (loss) reconciliation Net loss $ (255,174) $ (227,375)
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