SNAP
$45.26
Snap
$.97
2.19%
Earnings Details
3rd Quarter September 2020
Tuesday, October 20, 2020 4:10:00 PM
Tweet Share Watch
Summary

Snap Beats

Snap (SNAP) reported a 3rd Quarter September 2020 loss of $0.01 per share on revenue of $678.7 million. The consensus estimate was a loss of $0.05 per share on revenue of $547.2 million. The Earnings Whisper number was for a loss of $0.04 per share. Revenue grew 52.1% on a year-over-year basis.

The company said in its prepared remarks it believes fourth quarter revenue of $824.5 million to $841.3 million is "attainable". The current consensus revenue estimate is $713.4 million for the quarter ending December 31, 2020.

Results
Reported Earnings
($0.01)
Earnings Whisper
($0.04)
Consensus Estimate
($0.05)
Reported Revenue
$678.7 Mil
Revenue Estimate
$547.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Snap Inc. Announces Third Quarter 2020 Financial Results

Daily Active Users increased 18% year-over-year to 249 million

Revenue increased 52% year-over-year to $679 million

Operating cash flow improved 28% year-over-year to $(55) million

SANTA MONICA, Calif.--(BUSINESS WIRE)--Snap Inc. (NYSE: SNAP) today announced financial results for the quarter ended September 30, 2020.

Financial Highlights

  • Operating cash flow improved by $21 million to $(55) million in Q3 2020, compared to the prior year.
  • Free Cash Flow improved by $15 million to $(70) million in Q3 2020, compared to the prior year.
  • Common shares outstanding plus shares underlying stock-based awards totaled 1,624 million at September 30, 2020, compared to 1,565 million one year ago.
  • Revenue increased 52% to $679 million in Q3 2020, compared to the prior year.
  • Net loss was $(200) million in Q3 2020, compared to $(227) million in the prior year.
  • Adjusted EBITDA was $56 million in Q3 2020, compared to $(42) million in the prior year.

“Our focus on delivering value for our community and advertising partners is yielding positive results during this challenging time. We’re excited about the growth of our business in Q3 as we continue to make long-term investments in our future,” said Evan Spiegel, CEO. “The adoption of augmented reality is happening faster than we had previously anticipated, and we are working together as a team to execute on the many opportunities in front of us.”

 

Three Months Ended

September 30,

 

Percent

 

Nine Months Ended

September 30,

 

Percent

 

2020

 

2019

 

Change

 

2020

 

2019

 

Change

(Unaudited)

(in thousands, except per share amounts)

Cash used in operating activities

$

(54,828

)

 

$

(76,149

)

 

(28

)%

 

$

(115,099

)

 

$

(238,116

)

 

(52

)%

Free Cash Flow

$

(69,555

)

 

$

(84,087

)

 

17

%

 

$

(156,484

)

 

$

(265,501

)

 

41

%

Common shares outstanding plus shares underlying stock-based awards

 

1,623,630

 

 

 

1,565,208

 

 

4

%

 

 

1,623,630

 

 

 

1,565,208

 

 

4

%

Operating loss

$

(167,864

)

 

$

(228,853

)

 

(27

)%

 

$

(764,836

)

 

$

(849,732

)

 

(10

)%

Revenue

$

678,668

 

 

$

446,199

 

 

52

%

 

$

1,595,304

 

 

$

1,154,646

 

 

38

%

Net loss

$

(199,853

)

 

$

(227,375

)

 

(12

)%

 

$

(831,740

)

 

$

(792,956

)

 

5

%

Adjusted EBITDA

$

56,361

 

 

$

(42,375

)

 

233

%

 

$

(120,446

)

 

$

(244,537

)

 

51

%

Diluted net loss per share attributable to common stockholders

$

(0.14

)

 

$

(0.16

)

 

(16

)%

 

$

(0.58

)

 

$

(0.58

)

 

(1

)%

Non-GAAP diluted net income (loss) per share

$

0.01

 

 

$

(0.04

)

 

120

%

 

$

(0.16

)

 

$

(0.20

)

 

(20

)%

Q3 2020 Summary & Key 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 average number of Snaps created every day grew 25% year-over-year.

We continue to invest in our Discover platform as a destination for content that entertains and informs:

  • Total daily time spent by Snapchatters watching Shows increased by over 50% year-over-year in Q3 2020.
  • The daily average number of Snapchatters in India watching Discover content increased by nearly 50% sequentially in Q3 2020.
  • More than 40% of the US Gen Z population watched sports Discover content on Snapchat last month.
  • SportsCenter viewership on Snapchat increased by 80% from July to September.
  • We launched a new unscripted series called “The Solution Committee” in which Jaden Smith seeks out the help of young activists and celebrity friends to explore racial and social justice issues.
  • Our “VS The World” docuseries franchise launched its second season, featuring Conor McGregor, and reached over 14 million viewers.
  • We launched a new unscripted series called “Coach Kev” in which Kevin Hart inspires Snapchatters to live their best lives through bursts of inspiration, positivity, and wisdom.

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 of playtime, demonstrating the power of AR as a format in honoring the legacy of important movements, such as the March on Washington in 1963.
  • Our ‘Anime Style’ Lens powered by real time machine learning was engaged with 3 billion times in its first week.
  • We added 2D body tracking technology in Lens Studio, allowing Lens creators to make AR experiences for the full human body.
  • We released Lens Favorites, a new feature that allows Snapchatters to pin their favorite Lenses for future use, to our Android users.
  • We launched our first Local Lens experience called City Painter, allowing Snapchatters to virtually paint the shared digital space on Carnaby Street in London.

We strengthened our ad platform and products while engaging with advertisers:

  • We partnered with Champs Sports, Clearly, Essie, Hoka One One, Kohl’s, Levi’s, Jordan Brand, and Sally Hansen to launch augmented reality-powered virtual try-on experiences.
  • We launched ‘Meet the Snapchat Generation,’ our first-ever global business-to-business marketing campaign highlighting Snapchat’s unique audience.
  • We launched Platform Burst, which allows advertisers to purchase ad inventory across different formats to reach a significant portion of their target audience over a few days.
  • We launched a Snap Select gaming bundle, which is the first commercial bundle tailored to a specific category and has led to impactful partnerships with advertisers.

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 launched Sounds on Snapchat, empowering Snapchatters to express themselves by adding licensed music from emerging and established artists to their Snaps, including music companies like Warner Music Group, Universal Music Publishing, The NMPA, and Merlin.
  • We helped over 1 million Snapchatters with voter registration for the upcoming 2020 U.S. General Election through our ‘Register to Vote’ Mini, developed in partnership with Democracy Works.
  • Our Bitmoji team launched its first-ever branded customizable Mix and Match collection, in partnership with Ralph Lauren, and millions of users globally have dressed their Bitmoji in Ralph Lauren since launch.
  • Snapchatters can now dress their Bitmoji avatars in a new collection of 19 different digital apparel and sneakers from Nike’s Jordan brand, including the new Air Jordan XXXV.
  • Our Headspace Mini, developed in partnership with Headspace, was used by 5 million users in its first month after launch and we released two new meditations in honor of World Mental Health Day.

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.

Conference Call Information

Snap Inc. will host a conference call to discuss the results at 2:00 p.m. Pacific / 5:00 p.m. Eastern today. The live audio webcast along with supplemental information will be accessible at investor.snap.com. A recording of the webcast will also be available following the conference call.

Snap Inc. uses the investor.snap.com and snap.com/news websites as means of disclosing material non-public information and for complying with its disclosure obligation under Regulation FD.

Definitions

Free Cash Flow is defined as net cash provided by (used in) operating activities, reduced by purchases of property and equipment.

Common shares outstanding plus shares underlying stock-based awards includes common shares outstanding, restricted stock units, restricted stock awards, and outstanding stock options.

Adjusted EBITDA is defined as net income (loss), excluding interest income; interest expense; other income (expense) net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense and related payroll tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time.

A Daily Active User (DAU) is defined 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 quarter and dividing that sum by the number of days in that quarter.

Average revenue per user (ARPU) is defined as quarterly revenue divided by the average DAUs.

A Monthly Active User (MAU) is defined as a registered Snapchat user who opens the Snapchat application at least once during the 30-day period ending on the calendar month-end. We calculate average Monthly Active Users for a particular quarter by calculating the average of the MAUs as of each calendar month-end in that quarter.

Addressable reach is defined as the approximate number of Snapchat users that an ad could reach over a 28-day period in a given locality. When we calculate the percentage of a demographic group that can be reached, we do so by dividing addressable reach by relevant census figures. Addressable reach and age data are subject to limitations. For more information, see Snap’s SEC filings and businesshelp.snapchat.com.

Note: For adjustments and additional information regarding the non-GAAP financial measures and other items discussed, please see “Non-GAAP Financial Measures,” “Reconciliation of GAAP to Non-GAAP Financial Measures,” and “Supplemental Financial Information and Business Metrics.”

About Snap Inc.

Snap Inc. is a camera company. We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate. We contribute to human progress by empowering people to express themselves, live in the moment, learn about the world, and have fun together. For more information, visit snap.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this press release, including statements regarding guidance, our future results of operations or financial condition, business strategy and plans, user growth and engagement, product initiatives, and objectives of management for future operations, and the impact of COVID-19 on our business and the economy as a whole, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. We caution you that the foregoing may not include all of the forward-looking statements made in this press release.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this press release primarily on our current expectations and projections about future events and trends, including the ongoing COVID-19 pandemic that we believe may continue to affect our business, financial condition, results of operations, and prospects. These forward-looking statements are subject to risks and uncertainties related to: our financial performance; our lack of profitability to date; our ability to generate and sustain positive cash flow; our ability to attract and retain users, publishers, and advertisers; competition and new market entrants; managing our international expansion and our growth and future expenses; compliance with new laws, regulations, and executive actions; our ability to maintain, protect, and enhance our intellectual property; our ability to succeed in existing and new market segments; our ability to attract and retain qualified and key personnel; our ability to repay outstanding debt; and future acquisitions or investments, as well as risks, uncertainties, and other factors described in “Risk Factors” and elsewhere in our most recent quarterly report on Form 10-Q for the quarter ended June 30, 2020 filed with the SEC, which is available on the SEC’s website at www.sec.gov. Additional information will be made available in Snap Inc.’s quarterly report on Form 10-Q for the quarter ended September 30, 2020 and other filings that we make from time to time with the SEC. In addition, any forward-looking statements contained in this press release are based on assumptions that we believe to be reasonable as of this date. We undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of this press release or to reflect new information or the occurrence of unanticipated events, including future developments related to the COVID-19 pandemic, except as required by law.

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use the non-GAAP financial measure of Free Cash Flow, which is defined as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. We believe Free Cash Flow is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business and is a key financial indicator used by management. Additionally, we believe that Free Cash Flow is an important measure since we use third-party infrastructure partners to host our services and therefore we do not incur significant capital expenditures to support revenue generating activities. Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth.

We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net income (loss); excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense and related payroll tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in Adjusted EBITDA.

We use the non-GAAP financial measure of non-GAAP net loss, which is defined as net income (loss); excluding amortization of intangible assets; stock-based compensation expense and related payroll tax expense; certain other non-cash or non-recurring items impacting net income (loss) from time to time; and related income tax adjustments. Non-GAAP net loss and weighted average diluted shares are then used to calculate non-GAAP diluted net loss per share. Similar to Adjusted EBITDA, we believe these measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses we exclude in the measure.

We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance through the eyes of management, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry.

For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see “Reconciliation of GAAP to Non-GAAP Financial Measures.”

Snap Inc., “Snapchat,” and our other registered and common law trade names, trademarks, and service marks are the property of Snap Inc. or our subsidiaries.

SNAP INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Cash flows from operating activities

 

 

 

 

 

 

 

Net loss

$

(199,853

)

 

$

(227,375

)

 

$

(831,740

)

 

$

(792,956

)

Adjustments to reconcile net loss to net cash used in operating

activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

21,804

 

 

 

20,646

 

 

 

63,933

 

 

 

66,625

 

Stock-based compensation

 

192,080

 

 

 

161,228

 

 

 

550,300

 

 

 

519,358

 

Deferred income taxes

 

(1,186

)

 

 

170

 

 

 

(3,698

)

 

 

195

 

Gain on divestiture

 

 

 

 

 

 

 

 

 

 

(39,883

)

Amortization of debt discount and issuance costs

 

24,503

 

 

 

6,412

 

 

 

56,478

 

 

 

6,412

 

Other

 

7,252

 

 

 

(1,245

)

 

 

15,369

 

 

 

(4,561

)

Change in operating assets and liabilities, net of effect of acquisitions:

 

 

 

 

 

 

 

Accounts receivable, net of allowance

 

(151,856

)

 

 

(62,855

)

 

 

(43,310

)

 

 

(30,736

)

Prepaid expenses and other current assets

 

(10,608

)

 

 

(490

)

 

 

(19,352

)

 

 

(4,980

)

Operating lease right-of-use assets

 

10,054

 

 

 

35,633

 

 

 

28,307

 

 

 

57,254

 

Other assets

 

3,390

 

 

 

2,139

 

 

 

2,343

 

 

 

4,540

 

Accounts payable

 

3,435

 

 

 

4,220

 

 

 

11,448

 

 

 

28,319

 

Accrued expenses and other current liabilities

 

61,595

 

 

 

23,243

 

 

 

94,368

 

 

 

16,655

 

Operating lease liabilities

 

(15,760

)

 

 

(36,008

)

 

 

(40,739

)

 

 

(63,259

)

Other liabilities

 

322

 

 

 

(1,867

)

 

 

1,194

 

 

 

(1,099

)

Net cash used in operating activities

 

(54,828

)

 

 

(76,149

)

 

 

(115,099

)

 

 

(238,116

)

Cash flows from investing activities

 

 

 

 

 

 

 

Purchases of property and equipment

 

(14,727

)

 

 

(7,938

)

 

 

(41,385

)

 

 

(27,385

)

Proceeds from divestiture, net

 

 

 

 

 

 

 

 

 

 

73,796

 

Non-marketable investments

 

(3,500

)

 

 

(1,050

)

 

 

(95,341

)

 

 

(3,750

)

Cash paid for acquisitions, net of cash acquired

 

(33,508

)

 

 

 

 

 

(53,712

)

 

 

 

Purchases of marketable securities

 

(1,148,344

)

 

 

(1,115,358

)

 

 

(2,576,892

)

 

 

(1,924,398

)

Sales of marketable securities

 

155,899

 

 

 

24,948

 

 

 

373,857

 

 

 

102,437

 

Maturities of marketable securities

 

668,930

 

 

 

411,079

 

 

 

1,898,176

 

 

 

1,193,739

 

Other

 

 

 

 

 

 

 

(500

)

 

 

1,029

 

Net cash used in investing activities

 

(375,250

)

 

 

(688,319

)

 

 

(495,797

)

 

 

(584,532

)

Cash flows from financing activities

 

 

 

 

 

 

 

Proceeds from issuance of convertible notes, net of issuance costs

 

 

 

 

1,251,848

 

 

 

988,582

 

 

 

1,251,848

 

Purchase of capped calls

 

 

 

 

(102,086

)

 

 

(100,000

)

 

 

(102,086

)

Proceeds from the exercise of stock options

 

2,434

 

 

 

7,788

 

 

 

26,041

 

 

 

14,726

 

Net cash provided by financing activities

 

2,434

 

 

 

1,157,550

 

 

 

914,623

 

 

 

1,164,488

 

Change in cash, cash equivalents, and restricted cash

 

(427,644

)

 

 

393,082

 

 

 

303,727

 

 

 

341,840

 

Cash, cash equivalents, and restricted cash, beginning of period

 

1,252,631

 

 

 

337,732

 

 

 

521,260

 

 

 

388,974

 

Cash, cash equivalents, and restricted cash, end of period

$

824,987

 

 

$

730,814

 

 

$

824,987

 

 

$

730,814

 

Supplemental disclosures

 

 

 

 

 

 

 

Cash paid for income taxes, net

$

1,309

 

 

$

643

 

 

$

2,679

 

 

$

564

 

Cash paid for interest

$

5,113

 

 

$

380

 

 

 

10,378

 

 

 

1,176

 

SNAP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Revenue

$

678,668

 

 

$

446,199

 

 

$

1,595,304

 

 

$

1,154,646

 

Costs and expenses:

 

 

 

 

 

 

 

Cost of revenue

 

293,095

 

 

 

223,140

 

 

 

796,959

 

 

 

642,399

 

Research and development

 

283,639

 

 

 

211,599

 

 

 

783,115

 

 

 

663,983

 

Sales and marketing

 

143,511

 

 

 

123,240

 

 

 

397,834

 

 

 

332,626

 

General and administrative

 

126,287

 

 

 

117,073

 

 

 

382,232

 

 

 

365,370

 

Total costs and expenses

 

846,532

 

 

 

675,052

 

 

 

2,360,140

 

 

 

2,004,378

 

Operating loss

 

(167,864

)

 

 

(228,853

)

 

 

(764,836

)

 

 

(849,732

)

Interest income

 

2,801

 

 

 

10,317

 

 

 

16,158

 

 

 

25,579

 

Interest expense

 

(28,212

)

 

 

(8,654

)

 

 

(68,052

)

 

 

(10,219

)

Other income (expense), net

 

(5,669

)

 

 

(1,481

)

 

 

(14,483

)

 

 

41,477

 

Loss before income taxes

 

(198,944

)

 

 

(228,671

)

 

 

(831,213

)

 

 

(792,895

)

Income tax benefit (expense)

 

(909

)

 

 

1,296

 

 

 

(527

)

 

 

(61

)

Net loss

$

(199,853

)

 

$

(227,375

)

 

$

(831,740

)

 

$

(792,956

)

Net loss per share attributable to Class A, Class B, and Class C common stockholders:

 

 

 

 

 

 

 

Basic

$

(0.14

)

 

$

(0.16

)

 

$

(0.58

)

 

$

(0.58

)

Diluted

$

(0.14

)

 

$

(0.16

)

 

$

(0.58

)

 

$

(0.58

)

Weighted average shares used in computation of net loss per share:

 

 

 

 

 

 

 

Basic

 

1,466,420

 

 

 

1,393,358

 

 

 

1,446,040

 

 

 

1,364,327

 

Diluted

 

1,466,420

 

 

 

1,393,358

 

 

 

1,446,040

 

 

 

1,364,327

 

SNAP INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

 

 

September 30,

2020

 

December 31,

2019

 

(unaudited)

 

 

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

824,070

 

 

$

520,317

 

Marketable securities

 

1,900,935

 

 

 

1,592,488

 

Accounts receivable, net of allowance

 

529,872

 

 

 

492,194

 

Prepaid expenses and other current assets

 

60,837

 

 

 

38,987

 

Total current assets

 

3,315,714

 

 

 

2,643,986

 

Property and equipment, net

 

175,199

 

 

 

173,667

 

Operating lease right-of-use assets

 

269,141

 

 

 

275,447

 

Intangible assets, net

 

91,796

 

 

 

92,121

 

Goodwill

 

816,113

 

 

 

761,153

 

Other assets

 

149,811

 

 

 

65,550

 

Total assets

$

4,817,774

 

 

$

4,011,924

 

Liabilities and Stockholders’ Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

61,978

 

 

$

46,886

 

Operating lease liabilities

 

40,994

 

 

 

42,179

 

Accrued expenses and other current liabilities

 

507,134

 

 

 

410,610

 

Total current liabilities

 

610,106

 

 

 

499,675

 

Convertible senior notes, net

 

1,650,246

 

 

 

891,776

 

Operating lease liabilities, noncurrent

 

287,105

 

 

 

303,178

 

Other liabilities

 

71,546

 

 

 

57,382

 

Total liabilities

 

2,619,003

 

 

 

1,752,011

 

Commitments and contingencies

 

 

 

Stockholders’ equity

 

 

 

Class A non-voting common stock, $0.00001 par value. 3,000,000 shares authorized, 1,160,127 shares issued and outstanding at December 31, 2019, and 3,000,000 shares authorized, 1,229,446 shares issued and outstanding at September 30, 2020.

 

12

 

 

 

12

 

Class B voting common stock, $0.00001 par value. 700,000 shares authorized, 24,522 shares issued and outstanding at December 31, 2019, and 700,000 shares authorized, 23,643 shares issued and outstanding at September 30, 2020.

 

 

 

 

 

Class C voting common stock, $0.00001 par value. 260,888 shares authorized, 231,147 shares issued and outstanding at December 31, 2019, and 260,888 shares authorized, 231,627 shares issued and outstanding at September 30, 2020.

 

2

 

 

 

2

 

Additional paid-in capital

 

9,968,707

 

 

 

9,205,256

 

Accumulated other comprehensive income (loss)

 

8,499

 

 

 

573

 

Accumulated deficit

 

(7,778,449

)

 

 

(6,945,930

)

Total stockholders’ equity

 

2,198,771

 

 

 

2,259,913

 

Total liabilities and stockholders’ equity

$

4,817,774

 

 

$

4,011,924

 

SNAP INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Free Cash Flow reconciliation:

 

 

 

 

 

 

 

Net cash used in operating activities

$

(54,828

)

 

$

(76,149

)

 

$

(115,099

)

 

$

(238,116

)

Less:

 

 

 

 

 

 

 

Purchases of property and equipment

 

(14,727

)

 

 

(7,938

)

 

 

(41,385

)

 

 

(27,385

)

Free Cash Flow

$

(69,555

)

 

$

(84,087

)

 

$

(156,484

)

 

$

(265,501

)

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

Net loss

$

(199,853

)

 

$

(227,375

)

 

$

(831,740

)

 

$

(792,956

)

Add (deduct):

 

 

 

 

 

 

 

Interest income

 

(2,801

)

 

 

(10,317

)

 

 

(16,158

)

 

 

(25,579

)

Interest expense

 

28,212

 

 

 

8,654

 

 

 

68,052

 

 

 

10,219

 

Other (income) expense, net

 

5,669

 

 

 

1,481

 

 

 

14,483

 

 

 

(41,477

)

Income tax (benefit) expense

 

909

 

 

 

(1,296

)

 

 

527

 

 

 

61

 

Depreciation and amortization

 

21,804

 

 

 

20,646

 

 

 

63,933

 

 

 

66,625

 

Stock-based compensation expense

 

192,080

 

 

 

161,228

 

 

 

550,300

 

 

 

519,358

 

Payroll tax expense related to stock-based compensation

 

10,341

 

 

 

4,604

 

 

 

30,157

 

 

 

19,212

 

Adjusted EBITDA

$

56,361

 

 

$

(42,375

)

 

$

(120,446

)

 

$

(244,537

)

Total depreciation and amortization expense by function:

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Depreciation and amortization expense:

 

 

 

 

 

 

 

Cost of revenue

$

5,615

 

$

4,580

 

$

16,672

 

$

16,368

Research and development

 

9,526

 

 

 

8,632

 

 

 

26,904

 

 

 

24,470

 

Sales and marketing

 

3,233

 

 

 

3,109

 

 

 

9,780

 

 

 

10,169

 

General and administrative

 

3,430

 

 

 

4,325

 

 

 

10,577

 

 

 

15,618

 

Total

$

21,804

 

 

$

20,646

 

 

$

63,933

 

 

$

66,625

 

Total stock-based compensation expense by function:

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Stock-based compensation expense:

 

 

 

 

 

 

 

Cost of revenue

$

2,623

 

$

1,332

 

$

6,471

 

$

4,967

Research and development

 

132,003

 

 

 

108,176

 

 

 

377,836

 

 

 

353,028

 

Sales and marketing

 

27,393

 

 

 

23,333

 

 

 

79,306

 

 

 

67,567

 

General and administrative

 

30,061

 

 

 

28,387

 

 

 

86,687

 

 

 

93,796

 

Total

$

192,080

 

 

$

161,228

 

 

$

550,300

 

 

$

519,358

 

SNAP INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (continued)

(in thousands, except per share amounts, unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2020

 

2019

 

2020

 

2019

Non-GAAP net income (loss) reconciliation:

 

 

 

 

 

 

 

Net loss

$

(199,853

)

 

$

(227,375

)

 

$

(831,740

)

 

$

(792,956

)

Amortization of intangible assets

 

8,422

 

 

 

6,915

 

 

 

23,780

 

 

 

26,331

 

Stock-based compensation expense

 

192,080

 

 

 

161,228

 

 

 

550,300

 

 

 

519,358

 

Payroll tax expense related to stock-based compensation

 

10,341

 

 

 

4,604

 

 

 

30,157

 

 

 

19,212

 

Gain on divestiture

 

 

 

 

 

 

 

 

 

 

(39,883

)

Income tax adjustments

 

388

 

 

 

200

 

 

 

415

 

 

 

462

 

Non-GAAP net loss

$

11,378

 

 

$

(54,428

)

 

$

(227,088

)

 

$

(267,476

)

 

 

 

 

 

 

 

 

Weighted-average common shares - Diluted

 

1,466,420

 

 

 

1,393,358

 

 

 

1,446,040

 

 

 

1,364,327

 

 

 

 

 

 

 

 

 

Non-GAAP diluted net income (loss) per share reconciliation:

 

 

 

 

 

 

 

Diluted net loss per share

$

(0.14

)

 

$

(0.16

)

 

$

(0.58

)

 

$

(0.58

)

Non-GAAP adjustment to net loss

 

0.15

 

 

 

0.12

 

 

 

0.42

 

 

 

0.38

 

Non-GAAP diluted net income (loss) per share

$

0.01

 

 

$

(0.04

)

 

$

(0.16

)

 

$

(0.20

)

SNAP INC.

SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS

(dollars and shares in thousands, except per user amounts below, unaudited)

 

 

Q2 2019

 

Q3 2019

 

Q4 2019

 

Q1 2020

 

Q2 2020

 

Q3 2020

Cash Flows and Shares

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

(95,789

)

 

$

(76,149

)

 

$

(66,842

)

 

$

6,283

 

 

$

(66,554

)

 

$

(54,828

)

Net cash provided by (used in) operating activities - YoY (year-over-year)

 

52

%

 

 

43

%

 

 

(47

)%

 

 

109

%

 

 

31

%

 

 

28

%

Net cash provided by (used in) operating activities - TTM (trailing twelve months)

$

(420,564

)

 

$

(364,170

)

 

$

(304,958

)

 

$

(232,497

)

 

$

(203,262

)

 

$

(181,941

)

Purchases of property and equipment

$

(7,633

)

 

$

(7,938

)

 

$

(9,093

)

 

$

(10,891

)

 

$

(15,767

)

 

$

(14,727

)

Purchases of property and equipment - YoY

 

(78

)%

 

 

(70

)%

 

 

(60

)%

 

 

(8

)%

 

 

107

%

 

 

86

%

Purchases of property and equipment - TTM

$

(68,473

)

 

$

(50,126

)

 

$

(36,478

)

 

$

(35,555

)

 

$

(43,689

)

 

$

(50,478

)

Free Cash Flow

$

(103,422

)

 

$

(84,087

)

 

$

(75,935

)

 

$

(4,608

)

 

$

(82,321

)

 

$

(69,555

)

Free Cash Flow - YoY

 

56

%

 

 

47

%

 

 

49

%

 

 

94

%

 

 

20

%

 

 

17

%

Free Cash Flow - TTM

$

(489,037

)

 

$

(414,296

)

 

$

(341,436

)

 

$

(268,052

)

 

$

(246,951

)

 

$

(232,419

)

Common shares outstanding

 

1,372,149

 

 

 

1,389,395

 

 

 

1,415,796

 

 

 

1,439,589

 

 

 

1,463,620

 

 

 

1,484,716

 

Common shares outstanding - YoY

 

8

%

 

 

8

%

 

 

7

%

 

 

8

%

 

 

7

%

 

 

7

%

Shares underlying stock-based awards

 

180,585

 

 

 

175,813

 

 

 

160,239

 

 

 

149,004

 

 

 

152,526

 

 

 

138,914

 

Shares underlying stock-based awards - YoY

 

(12

)%

 

 

(5

)%

 

 

(15

)%

 

 

(29

)%

 

 

(16

)%

 

 

(21

)%

Total common shares outstanding plus shares underlying stock-based awards

 

1,552,734

 

 

 

1,565,208

 

 

 

1,576,035

 

 

 

1,588,593

 

 

 

1,616,146

 

 

 

1,623,630

 

Total common shares outstanding plus shares underlying stock-based awards - YoY

 

5

%

 

 

6

%

 

 

5

%

 

 

3

%

 

 

4

%

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

Results of Operations

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

388,021

 

 

$

446,199

 

 

$

560,889

 

 

$

462,477

 

 

$

454,158

 

 

$

678,668

 

Revenue - YoY

 

48

%

 

 

50

%

 

 

44

%

 

 

44

%

 

 

17

%

 

 

52

%

Revenue - TTM

$

1,395,964

 

 

$

1,544,468

 

 

$

1,715,535

 

 

$

1,857,586

 

 

$

1,923,723

 

 

$

2,156,192

 

Revenue by region(1)

 

 

 

 

 

 

 

 

 

 

 

North America

$

260,017

 

 

$

316,028

 

 

$

382,029

 

 

$

315,650

 

 

$

306,740

 

 

$

492,928

 

North America - YoY

 

47

%

 

 

52

%

 

 

42

%

 

 

40

%

 

 

18

%

 

 

56

%

North America - TTM

$

962,057

 

 

$

1,070,608

 

 

$

1,183,779

 

 

$

1,273,724

 

 

$

1,320,447

 

 

$

1,497,347

 

Europe

$

60,633

 

 

$

68,553

 

 

$

91,873

 

 

$

76,498

 

 

$

78,635

 

 

$

102,480

 

Europe - YoY

 

51

%

 

 

36

%

 

 

47

%

 

 

61

%

 

 

30

%

 

 

49

%

Europe - TTM

$

221,029

 

 

$

239,104

 

 

$

268,507

 

 

$

297,557

 

 

$

315,559

 

 

$

349,486

 

Rest of World

$

67,374

 

 

$

61,618

 

 

$

86,987

 

 

$

70,329

 

 

$

68,783

 

 

$

83,260

 

Rest of World - YoY

 

51

%

 

 

55

%

 

 

49

%

 

 

49

%

 

 

2

%

 

 

35

%

Rest of World - TTM

$

212,882

 

 

$

234,760

 

 

$

263,252

 

 

$

286,308

 

 

$

287,717

 

 

$

309,359

 

Operating loss

$

(304,818

)

 

$

(228,853

)

 

$

(253,596

)

 

$

(286,364

)

 

$

(310,608

)

 

$

(167,864

)

Operating loss - YoY

 

(15

)%

 

 

(29

)%

 

 

30

%

 

 

(9

)%

 

 

2

%

 

 

(27

)%

Operating loss - Margin

 

(79

)%

 

 

(51

)%

 

 

(45

)%

 

 

(62

)%

 

 

(68

)%

 

 

(25

)%

Operating loss - TTM

$

(1,138,957

)

 

$

(1,044,439

)

 

$

(1,103,328

)

 

$

(1,073,631

)

 

$

(1,079,421

)

 

$

(1,018,432

)

Net loss

$

(255,174

)

 

$

(227,375

)

 

$

(240,704

)

 

$

(305,936

)

 

$

(325,951

)

 

$

(199,853

)

Net loss - YoY

 

(28

)%

 

 

(30

)%

 

 

26

%

 

 

(1

)%

 

 

28

%

 

 

(12

)%

Net loss - TTM

$

(1,082,397

)

 

$

(984,624

)

 

$

(1,033,660

)

 

$

(1,029,189

)

 

$

(1,099,966

)

 

$

(1,072,444

)

Adjusted EBITDA

$

(78,713

)

 

$

(42,375

)

 

$

42,307

 

 

$

(81,237

)

 

$

(95,570

)

 

$

56,361

 

Adjusted EBITDA - YoY

 

53

%

 

 

69

%

 

 

184

%

 

 

34

%

 

 

(21

)%

 

 

233

%

Adjusted EBITDA - Margin(2)

 

(20

)%

 

 

(9

)%

 

 

8

%

 

 

(18

)%

 

 

(21

)%

 

 

8

%

Adjusted EBITDA - TTM

$

(390,902

)

 

$

(294,900

)

 

$

(202,230

)

 

$

(160,018

)

 

$

(176,875

)

 

$

(78,139

)

(1)

Total revenue for geographic reporting is apportioned to each region based on our determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This allocation is consistent with how we determine ARPU.

(2)

We define Adjusted EBITDA margin as Adjusted EBITDA divided by GAAP revenue.

SNAP INC.

SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS (continued)

(dollars and shares in thousands, except per user amounts below, unaudited)

 

 

Q2 2019

 

Q3 2019

 

Q4 2019

 

Q1 2020

 

Q2 2020

 

Q3 2020

Other

 

 

 

 

 

 

 

 

 

 

 

DAU (in millions)

 

203

 

 

 

210

 

 

 

218

 

 

 

229

 

 

 

238

 

 

 

249

 

DAU - YoY

 

8

%

 

 

13

%

 

 

17

%

 

 

20

%

 

 

17

%

 

 

18

%

DAU by region (in millions)

 

 

 

 

 

 

 

 

 

 

 

North America

 

83

 

 

 

84

 

 

 

86

 

 

 

88

 

 

 

90

 

 

 

90

 

North America - YoY

 

3

%

 

 

6

%

 

 

9

%

 

 

10

%

 

 

9

%

 

 

7

%

Europe

 

64

 

 

 

65

 

 

 

67

 

 

 

70

 

 

 

71

 

 

 

72

 

Europe - YoY

 

5

%

 

 

9

%

 

 

12

%

 

 

14

%

 

 

12

%

 

 

10

%

Rest of World

 

56

 

 

 

61

 

 

 

64

 

 

 

71

 

 

 

77

 

 

 

87

 

Rest of World - YoY

 

21

%

 

 

28

%

 

 

36

%

 

 

45

%

 

 

37

%

 

 

43

%

ARPU

$

1.91

 

 

$

2.12

 

 

$

2.58

 

 

$

2.02

 

 

$

1.91

 

 

$

2.73

 

ARPU - YoY

 

37

%

 

 

33

%

 

 

23

%

 

 

20

%

 

 

 

 

 

28

%

ARPU by region

 

 

 

 

 

 

 

 

 

 

 

North America

$

3.14

 

 

$

3.75

 

 

$

4.42

 

 

$

3.57

 

 

$

3.40

 

 

$

5.49

 

North America - YoY

 

42

%

 

 

43

%

 

 

31

%

 

 

27

%

 

 

8

%

 

 

46

%

Europe

$

0.95

 

 

$

1.05

 

 

$

1.37

 

 

$

1.09

 

 

$

1.10

 

 

$

1.43

 

Europe - YoY

 

43

%

 

 

24

%

 

 

31

%

 

 

41

%

 

 

16

%

 

 

36

%

Rest of World

$

1.20

 

 

$

1.01

 

 

$

1.35

 

 

$

1.00

 

 

$

0.89

 

 

$

0.95

 

Rest of World - YoY

 

25

%

 

 

21

%

 

 

9

%

 

 

3

%

 

 

(26

)%

 

 

(6

)%

Employees (full-time; excludes part-time, contractors, and temporary personnel)

 

2,734

 

 

 

2,908

 

 

 

3,195

 

 

 

3,427

 

 

 

3,550

 

 

 

3,713

 

Employees - YoY

 

(5

)%

 

 

0

%

 

 

11

%

 

 

22

%

 

 

30

%

 

 

28

%

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

5,642

 

 

$

4,580

 

 

$

4,903

 

 

$

5,525

 

 

$

5,532

 

 

$

5,615

 

Research and development

 

7,188

 

 

 

8,632

 

 

 

8,738

 

 

 

8,915

 

 

 

8,463

 

 

 

9,526

 

Sales and marketing

 

3,045

 

 

 

3,109

 

 

 

3,087

 

 

 

3,166

 

 

 

3,381

 

 

 

3,233

 

General and administrative

 

6,785

 

 

 

4,325

 

 

 

3,892

 

 

 

3,598

 

 

 

3,549

 

 

 

3,430

 

Total

$

22,660

 

 

$

20,646

 

 

$

20,620

 

 

$

21,204

 

 

$

20,925

 

 

$

21,804

 

Depreciation and amortization expense - YoY

 

1

%

 

 

(17

)%

 

 

(9

)%

 

 

(9

)%

 

 

(8

)%

 

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

1,786

 

 

$

1,332

 

 

$

1,398

 

 

$

1,782

 

 

$

2,066

 

 

$

2,623

 

Research and development

 

132,610

 

 

 

108,176

 

 

 

111,611

 

 

 

118,317

 

 

 

127,516

 

 

 

132,003

 

Sales and marketing

 

26,474

 

 

 

23,333

 

 

 

25,788

 

 

 

24,806

 

 

 

27,107

 

 

 

27,393

 

General and administrative

 

34,704

 

 

 

28,387

 

 

 

27,858

 

 

 

27,144

 

 

 

29,482

 

 

 

30,061

 

Total

$

195,574

 

 

$

161,228

 

 

$

166,655

 

 

$

172,049

 

 

$

186,171

 

 

$

192,080

 

Stock-based compensation expense - YoY

 

25

%

 

 

27

%

 

 

37

%

 

 

6

%

 

 

(5

)%

 

 

19

%

 

Investors and Analysts:
ir@snap.com

Press:
press@snap.com

Source: Snap Inc.