Snap Inc. Announces Second Quarter 2021 Financial Results

SANTA MONICA, Calif.–(BUSINESS WIRE)–Snap Inc. (NYSE: SNAP) today announced financial results for the quarter ended…

SANTA MONICA, Calif.–(BUSINESS WIRE)–Snap Inc. (NYSE: SNAP) today announced financial results for the quarter ended June 30, 2021.

Financial Highlights

  • Revenue increased 116% to $982 million in Q2 2021, compared to the prior year.
  • Net loss improved 53% to $(152) million in Q2 2021, compared to the prior year.
  • Adjusted EBITDA improved 223% to $117 million in Q2 2021, compared to the prior year.
  • Operating cash flow was $(101) million in Q2 2021, compared to $(67) million in the prior year.
  • Free Cash Flow was $(116) million in Q2 2021, compared to $(82) million in the prior year.
  • Common shares outstanding plus shares underlying stock-based awards totaled 1,681 million at June 30, 2021, compared to 1,616 million one year ago.

“Our second quarter results reflect the broad-based strength of our business, as we grew both revenue and daily active users at the highest rates we have achieved in the past four years,” said Evan Spiegel, CEO. “We are pleased by the progress our team is making with the development of our augmented reality platform, and we are energized by the many opportunities to grow our community and business around the world.”

 

Three Months Ended June 30,

 

 

Percent

 

 

Six Months Ended June 30,

 

 

Percent

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

(Unaudited)

(in thousands, except per share amounts)

 

 

 

 

 

Revenue

$

982,108

 

 

$

454,158

 

 

 

116

%

 

$

1,751,692

 

 

$

916,636

 

 

 

91

%

Operating loss

$

(192,512

)

 

$

(310,608

)

 

 

38

%

 

$

(496,118

)

 

$

(596,972

)

 

 

17

%

Net loss

$

(151,664

)

 

$

(325,951

)

 

 

53

%

 

$

(438,546

)

 

$

(631,887

)

 

 

31

%

Adjusted EBITDA(1)

$

117,403

 

 

$

(95,570

)

 

 

223

%

 

$

115,694

 

 

$

(176,807

)

 

 

165

%

Cash provided by (used in) operating activities

$

(101,086

)

 

$

(66,554

)

 

 

(52

)%

 

$

35,800

 

 

$

(60,271

)

 

 

159

%

Free Cash Flow(2)

$

(115,709

)

 

$

(82,321

)

 

 

(41

)%

 

$

10,326

 

 

$

(86,929

)

 

 

112

%

Diluted net loss per share attributable to common stockholders

$

(0.10

)

 

$

(0.23

)

 

 

56

%

 

$

(0.29

)

 

$

(0.44

)

 

 

35

%

Non-GAAP diluted net income (loss) per share(3)

$

0.10

 

 

$

(0.09

)

 

 

220

%

 

$

0.10

 

 

$

(0.17

)

 

 

158

%

Common shares outstanding plus shares underlying stock-based awards

 

1,681,260

 

 

 

1,616,146

 

 

 

4

%

 

 

1,681,260

 

 

 

1,616,146

 

 

 

4

%

(1)

See page 10 for reconciliation of net loss to Adjusted EBITDA.

(2)

See page 10 for reconciliation of cash provided by (used in) operating activities to Free Cash Flow.

(3)

See page 11 for reconciliation of GAAP diluted net loss per share to non-GAAP diluted net income (loss) per share.

Q2 2021 Summary & Key Highlights

We have an active, engaged community:

  • DAUs were 293 million in Q2 2021, an increase of 55 million, or 23%, year-over-year.
  • DAUs increased sequentially and year-over-year in each of North America, Europe, and Rest of World.
  • DAUs increased sequentially and year-over-year on both iOS and Android platforms.

We invested and innovated in our camera and augmented reality platforms:

  • We improved several try-on capabilities with Lens Studio 4.0, including multi-person 3D body mesh, advanced cloth simulation, and a new visual effects editor for more realistic Lenses.
  • We released TrueSize technology to improve eyewear sizing and wrist tracking technology for accurate watch try-ons.
  • We introduced several new categories for Scan, including fashion and food, which is already used by more than 170 million Snapchatters every month to identify dog breeds and plants, discover recipes, and shop for clothing.
  • We introduced Camera Shortcuts, an easy way for Snapchatters to find the most relevant camera mode, Lens, or even curated soundtrack, right from the Camera screen.
  • We introduced Connected Lenses, enabling Snapchatters in different locations to interact with each other through AR.

We invested in our content offerings:

  • We aired eight new and renewed Snap Originals, including Swae Meets World, a documentary featuring American musician Swae Lee as he prepares to launch a solo album.
  • We launched a record 177 new international Discover Channels, including 36 in the UK and 24 in India, one of which is a partnership with Sony Pictures Network to launch five Shows.
  • Spotlight daily active users grew 49%, average daily content submissions more than tripled, and daily time spent per user in the US grew by over 60% quarter-over-quarter.
  • We released Spotlight on the Web, a destination to view Spotlight Snaps from a browser without a Snapchat account, and also allow Creators to upload content submissions directly from their desktop.
  • We announced new monetization opportunities for Spotlight Creators through Gifting with Snap Tokens, enabling Creators to build personal connections with their fans.

We expanded our partner and developer ecosystem:

  • We announced Camera Kit partnerships with Disney, Viber, and Bumble, bringing our Camera and AR capabilities into their applications.
  • We announced Snap Kit integrations with YouTube and YouTube Music, allowing users to share YouTube videos to the Snapchat Camera.
  • We announced a Bitmoji for Games partnership with Unity, allowing Unity developers to bring 3D Bitmoji avatars into their player experience.
  • We released Sticker Kit, which includes over 34 million Bitmojis, Stickers, and GIFs that can be integrated into partner applications.
  • We announced Layers, a new feature for the Snap Map enabling Snapchatters to find personalized experiences from select partners right from the Map, such as surfacing saved Memories across the Map and showing nearby restaurants and events.

We strengthened our capabilities to drive improved outcomes for advertisers:

  • We rolled out Public Profiles for businesses, allowing any business to create a profile on Snapchat showcasing their Lenses, Highlights, Stories, and shoppable products.
  • We announced an integration with Salesforce, allowing brands to leverage their first-party data to reach Snapchatters with relevant ads.
  • We launched the Creator Marketplace within our self-serve Ads Manager, connecting advertisers with certified Lens Creators and facilitating the AR development process.
  • We introduced API Lenses, which enables businesses to automatically import up-to-date product inventory into AR Lenses without additional work.

Financial Guidance

The following forward-looking statements reflect our expectations for the third quarter of 2021 as of July 22, 2021, and are subject to substantial uncertainty. This guidance assumes constant foreign currency rates, and among other things, that no business acquisitions, investments, restructurings, or legal settlements are concluded in the quarter. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.”

Q3 2021 Outlook

  • Revenue is estimated to increase approximately 58% to 60% year-over-year, resulting in estimated revenue between $1,070 million and $1,085 million, compared to $679 million in Q3 2020.
  • Adjusted EBITDA is estimated to be between $100 million and $120 million, compared to $56 million in Q3 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 other payroll related 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.

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 our financial outlook and 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 periodic report 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 periodic report that will be filed with the SEC for the period covered by this press release 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 other payroll related 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 other payroll related 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 June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(151,664

)

 

$

(325,951

)

 

$

(438,546

)

 

$

(631,887

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

28,270

 

 

 

20,925

 

 

 

51,768

 

 

 

42,129

 

Stock-based compensation

 

256,600

 

 

 

186,171

 

 

 

493,673

 

 

 

358,220

 

Amortization of debt discount and issuance costs

 

1,148

 

 

 

20,412

 

 

 

2,192

 

 

 

31,975

 

Non-marketable investments

 

(79,940

)

 

 

(3,019

)

 

 

(102,451

)

 

 

8,580

 

Other

 

34,856

 

 

 

(1,406

)

 

 

41,685

 

 

 

(2,975

)

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

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net of allowance

 

(174,452

)

 

 

15,654

 

 

 

(45,136

)

 

 

108,546

 

Prepaid expenses and other current assets

 

1,065

 

 

 

4,123

 

 

 

(11,371

)

 

 

(8,744

)

Operating lease right-of-use assets

 

12,549

 

 

 

9,537

 

 

 

23,747

 

 

 

18,253

 

Other assets

 

(338

)

 

 

108

 

 

 

(1,236

)

 

 

(1,047

)

Accounts payable

 

(50,159

)

 

 

2,279

 

 

 

6,346

 

 

 

8,013

 

Accrued expenses and other current liabilities

 

27,690

 

 

 

14,863

 

 

 

33,039

 

 

 

32,773

 

Operating lease liabilities

 

(8,059

)

 

 

(10,985

)

 

 

(21,354

)

 

 

(24,979

)

Other liabilities

 

1,348

 

 

 

735

 

 

 

3,444

 

 

 

872

 

Net cash provided by (used in) operating activities

 

(101,086

)

 

 

(66,554

)

 

 

35,800

 

 

 

(60,271

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(14,623

)

 

 

(15,767

)

 

 

(25,474

)

 

 

(26,658

)

Non-marketable investments

 

(31,425

)

 

 

(56,341

)

 

 

(32,775

)

 

 

(91,841

)

Cash paid for acquisitions, net of cash acquired

 

(30,304

)

 

 

(20,204

)

 

 

(139,216

)

 

 

(20,204

)

Purchases of marketable securities

 

(764,371

)

 

 

(875,873

)

 

 

(1,287,590

)

 

 

(1,428,548

)

Sales of marketable securities

 

239,500

 

 

 

 

 

 

347,556

 

 

 

217,958

 

Maturities of marketable securities

 

696,892

 

 

 

476,561

 

 

 

1,513,823

 

 

 

1,229,246

 

Other

 

36,200

 

 

 

(500

)

 

 

36,100

 

 

 

(500

)

Net cash provided by (used in) investing activities

 

131,869

 

 

 

(492,124

)

 

 

412,424

 

 

 

(120,547

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible notes, net of issuance costs

 

1,137,227

 

 

 

988,582

 

 

 

1,137,227

 

 

 

988,582

 

Purchase of capped calls

 

(86,825

)

 

 

(100,000

)

 

 

(86,825

)

 

 

(100,000

)

Proceeds from the exercise of stock options

 

3,257

 

 

 

20,477

 

 

 

7,710

 

 

 

23,607

 

Net cash provided by financing activities

 

1,053,659

 

 

 

909,059

 

 

 

1,058,112

 

 

 

912,189

 

Change in cash, cash equivalents, and restricted cash

 

1,084,442

 

 

 

350,381

 

 

 

1,506,336

 

 

 

731,371

 

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

 

968,437

 

 

 

902,250

 

 

 

546,543

 

 

 

521,260

 

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

$

2,052,879

 

 

$

1,252,631

 

 

$

2,052,879

 

 

$

1,252,631

 

Supplemental disclosures

 

 

 

 

 

 

 

 

 

 

 

Cash paid for income taxes, net

$

3,280

 

 

$

562

 

 

$

14,288

 

 

$

1,370

 

Cash paid for interest

$

1,614

 

 

$

366

 

 

 

6,741

 

 

 

5,265

 

SNAP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

 

 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

 

2021

 

2020

 

2021

 

2020

Revenue

$

982,108

 

 

$

454,158

 

 

$

1,751,692

 

 

$

916,636

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

445,021

 

 

 

250,454

 

 

 

857,622

 

 

 

503,864

 

Research and development

 

370,671

 

 

 

260,863

 

 

 

719,251

 

 

 

499,476

 

Sales and marketing

 

179,724

 

 

 

132,118

 

 

 

330,010

 

 

 

254,323

 

General and administrative

 

179,204

 

 

 

121,331

 

 

 

340,927

 

 

 

255,945

 

Total costs and expenses

 

1,174,620

 

 

 

764,766

 

 

 

2,247,810

 

 

 

1,513,608

 

Operating loss

 

(192,512

)

 

 

(310,608

)

 

 

(496,118

)

 

 

(596,972

)

Interest income

 

1,251

 

 

 

4,768

 

 

 

2,388

 

 

 

13,357

 

Interest expense

 

(4,564

)

 

 

(24,727

)

 

 

(9,595

)

 

 

(39,840

)

Other income (expense), net

 

42,282

 

 

 

3,575

 

 

 

64,340

 

 

 

(8,814

)

Loss before income taxes

 

(153,543

)

 

 

(326,992

)

 

 

(438,985

)

 

 

(632,269

)

Income tax benefit (expense)

 

1,879

 

 

 

1,041

 

 

 

439

 

 

 

382

 

Net loss

$

(151,664

)

 

$

(325,951

)

 

$

(438,546

)

 

$

(631,887

)

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

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.10

)

 

$

(0.23

)

 

$

(0.29

)

 

$

(0.44

)

Diluted

$

(0.10

)

 

$

(0.23

)

 

$

(0.29

)

 

$

(0.44

)

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

 

 

 

 

 

 

 

 

 

 

 

Basic

 

1,547,234

 

 

 

1,447,022

 

 

 

1,524,560

 

 

 

1,436,085

 

Diluted

 

1,547,234

 

 

 

1,447,022

 

 

 

1,524,560

 

 

 

1,436,085

 

SNAP INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

 

 

 

June 30,

2021

 

December 31,

2020

 

 

(unaudited)

 

 

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,051,961

 

 

$

545,618

 

Marketable securities

 

 

1,415,384

 

 

 

1,991,922

 

Accounts receivable, net of allowance

 

 

797,146

 

 

 

744,288

 

Prepaid expenses and other current assets

 

 

72,468

 

 

 

56,147

 

Total current assets

 

 

4,336,959

 

 

 

3,337,975

 

Property and equipment, net

 

 

183,229

 

 

 

178,709

 

Operating lease right-of-use assets

 

 

295,266

 

 

 

269,728

 

Intangible assets, net

 

 

264,161

 

 

 

105,929

 

Goodwill

 

 

1,453,766

 

 

 

939,259

 

Other assets

 

 

287,434

 

 

 

192,638

 

Total assets

 

$

6,820,815

 

 

$

5,024,238

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

79,089

 

 

$

71,908

 

Operating lease liabilities

 

 

54,121

 

 

 

41,077

 

Accrued expenses and other current liabilities

 

 

614,937

 

 

 

554,342

 

Total current liabilities

 

 

748,147

 

 

 

667,327

 

Convertible senior notes, net

 

 

2,550,829

 

 

 

1,675,169

 

Operating lease liabilities, noncurrent

 

 

301,580

 

 

 

287,292

 

Other liabilities

 

 

312,258

 

 

 

64,474

 

Total liabilities

 

 

3,912,814

 

 

 

2,694,262

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Class A non-voting common stock, $0.00001 par value. 3,000,000 shares authorized, 1,321,477 shares issued and outstanding at June 30, 2021, and 3,000,000 shares authorized, 1,248,010 shares issued and outstanding at December 31, 2020.

 

 

13

 

 

 

12

 

Class B voting common stock, $0.00001 par value. 700,000 shares authorized, 23,640 shares issued and outstanding at June 30, 2021, and 700,000 shares authorized, 23,696 shares issued and outstanding at December 31, 2020.

 

 

 

 

 

 

Class C voting common stock, $0.00001 par value. 260,888 shares authorized, 231,627 shares issued and outstanding at June 30, 2021, and 260,888 shares authorized, 231,627 shares issued and outstanding at December 31, 2020.

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

11,129,196

 

 

 

10,200,141

 

Accumulated other comprehensive income (loss)

 

 

13,847

 

 

 

21,363

 

Accumulated deficit

 

 

(8,235,057

)

 

 

(7,891,542

)

Total stockholders’ equity

 

 

2,908,001

 

 

 

2,329,976

 

Total liabilities and stockholders’ equity

 

$

6,820,815

 

 

$

5,024,238

 

SNAP INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, unaudited)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Free Cash Flow reconciliation:

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

(101,086

)

 

$

(66,554

)

 

$

35,800

 

 

$

(60,271

)

Less:

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(14,623

)

 

 

(15,767

)

 

 

(25,474

)

 

 

(26,658

)

Free Cash Flow

$

(115,709

)

 

$

(82,321

)

 

$

10,326

 

 

$

(86,929

)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(151,664

)

 

$

(325,951

)

 

$

(438,546

)

 

$

(631,887

)

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

(1,251

)

 

 

(4,768

)

 

 

(2,388

)

 

 

(13,357

)

Interest expense

 

4,564

 

 

 

24,727

 

 

 

9,595

 

 

 

39,840

 

Other (income) expense, net

 

(42,282

)

 

 

(3,575

)

 

 

(64,340

)

 

 

8,814

 

Income tax (benefit) expense

 

(1,879

)

 

 

(1,041

)

 

 

(439

)

 

 

(382

)

Depreciation and amortization

 

28,270

 

 

 

20,925

 

 

 

51,768

 

 

 

42,129

 

Stock-based compensation expense

 

256,600

 

 

 

186,171

 

 

 

493,673

 

 

 

358,220

 

Payroll and other tax expense related to stock-based compensation

 

25,045

 

 

 

7,942

 

 

 

66,371

 

 

 

19,816

 

Adjusted EBITDA

$

117,403

 

 

$

(95,570

)

 

$

115,694

 

 

$

(176,807

)

Total depreciation and amortization expense by function:

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Depreciation and amortization expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

4,727

 

 

$

5,532

 

 

$

10,003

 

 

$

11,057

 

Research and development

 

14,358

 

 

 

8,463

 

 

 

25,394

 

 

 

17,378

 

Sales and marketing

 

5,162

 

 

 

3,381

 

 

 

8,348

 

 

 

6,547

 

General and administrative

 

4,023

 

 

 

3,549

 

 

 

8,023

 

 

 

7,147

 

Total

$

28,270

 

 

$

20,925

 

 

$

51,768

 

 

$

42,129

 

SNAP INC.

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

(in thousands, except per share amounts, unaudited)

 

Total stock-based compensation expense by function:

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Stock-based compensation expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

2,847

 

 

$

2,066

 

 

$

5,503

 

 

$

3,848

 

Research and development

 

174,491

 

 

 

127,516

 

 

 

338,284

 

 

 

245,833

 

Sales and marketing

 

37,491

 

 

 

27,107

 

 

 

66,575

 

 

 

51,913

 

General and administrative

 

41,771

 

 

 

29,482

 

 

 

83,311

 

 

 

56,626

 

Total

$

256,600

 

 

$

186,171

 

 

$

493,673

 

 

$

358,220

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

2021

 

2020

 

2021

 

2020

Non-GAAP net income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(151,664

)

 

$

(325,951

)

 

$

(438,546

)

 

$

(631,887

)

Amortization of intangible assets

 

14,363

 

 

 

7,378

 

 

 

24,808

 

 

 

15,358

 

Stock-based compensation expense

 

256,600

 

 

 

186,171

 

 

 

493,673

 

 

 

358,220

 

Payroll and other tax expense related to stock-based compensation

 

25,045

 

 

 

7,942

 

 

 

66,371

 

 

 

19,816

 

Income tax adjustments

 

(199

)

 

 

86

 

 

 

390

 

 

 

27

 

Non-GAAP net income (loss)

$

144,145

 

 

$

(124,374

)

 

$

146,696

 

 

$

(238,466

)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares – Diluted

 

1,547,234

 

 

 

1,447,022

 

 

 

1,524,560

 

 

 

1,436,085

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Diluted net loss per share

$

(0.10

)

 

$

(0.23

)

 

$

(0.29

)

 

$

(0.44

)

Non-GAAP adjustment to net loss

 

0.20

 

 

 

0.14

 

 

 

0.39

 

 

 

0.27

 

Non-GAAP diluted net income (loss) per share

$

0.10

 

 

$

(0.09

)

 

$

0.10

 

 

$

(0.17

)

 

SNAP INC.

SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS

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

 

 

 

Q1 2020

 

 

Q2 2020

 

 

Q3 2020

 

 

Q4 2020

 

 

Q1 2021

 

 

Q2 2021

 

Cash Flows and Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

6,283

 

 

$

(66,554

)

 

$

(54,828

)

 

$

(52,545

)

 

$

136,886

 

 

$

(101,086

)

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

 

109

%

 

 

31

%

 

 

28

%

 

 

21

%

 

 

(2,079

)%

 

 

(52

)%

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

$

(232,497

)

 

$

(203,262

)

 

$

(181,941

)

 

$

(167,644

)

 

$

(37,041

)

 

$

(71,573

)

Purchases of property and equipment

$

(10,891

)

 

$

(15,767

)

 

$

(14,727

)

 

$

(16,447

)

 

$

(10,851

)

 

$

(14,623

)

Purchases of property and equipment – YoY

 

(8

)%

 

 

107

%

 

 

86

%

 

 

81

%

 

 

 

 

 

(7

)%

Purchases of property and equipment – TTM

$

(35,555

)

 

$

(43,689

)

 

$

(50,478

)

 

$

(57,832

)

 

$

(57,792

)

 

$

(56,648

)

Free Cash Flow

$

(4,608

)

 

$

(82,321

)

 

$

(69,555

)

 

$

(68,992

)

 

$

126,035

 

 

$

(115,709

)

Free Cash Flow – YoY

 

94

%

 

 

20

%

 

 

17

%

 

 

9

%

 

 

2,835

%

 

 

(41

)%

Free Cash Flow – TTM

$

(268,052

)

 

$

(246,951

)

 

$

(232,419

)

 

$

(225,476

)

 

$

(94,833

)

 

$

(128,221

)

Common shares outstanding

 

1,439,589

 

 

 

1,463,620

 

 

 

1,484,716

 

 

 

1,503,333

 

 

 

1,519,001

 

 

 

1,576,744

 

Common shares outstanding – YoY

 

8

%

 

 

7

%

 

 

7

%

 

 

6

%

 

 

6

%

 

 

8

%

Shares underlying stock-based awards

 

149,004

 

 

 

152,526

 

 

 

138,914

 

 

 

126,287

 

 

 

110,190

 

 

 

104,516

 

Shares underlying stock-based awards – YoY

 

(29

)%

 

 

(16

)%

 

 

(21

)%

 

 

(21

)%

 

 

(26

)%

 

 

(31

)%

Total common shares outstanding plus shares underlying stock-based awards

 

1,588,593

 

 

 

1,616,146

 

 

 

1,623,630

 

 

 

1,629,620

 

 

 

1,629,191

 

 

 

1,681,260

 

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

 

3

%

 

 

4

%

 

 

4

%

 

 

3

%

 

 

3

%

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

462,478

 

 

$

454,158

 

 

$

678,668

 

 

$

911,322

 

 

$

769,584

 

 

$

982,108

 

Revenue – YoY

 

44

%

 

 

17

%

 

 

52

%

 

 

62

%

 

 

66

%

 

 

116

%

Revenue – TTM

$

1,857,586

 

 

$

1,923,723

 

 

$

2,156,193

 

 

$

2,506,626

 

 

$

2,813,732

 

 

$

3,341,682

 

Revenue by region(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

315,650

 

 

$

306,740

 

 

$

492,928

 

 

$

659,163

 

 

$

552,972

 

 

$

701,735

 

North America – YoY

 

40

%

 

 

18

%

 

 

56

%

 

 

73

%

 

 

75

%

 

 

129

%

North America – TTM

$

1,273,724

 

 

$

1,320,447

 

 

$

1,497,347

 

 

$

1,774,481

 

 

$

2,011,803

 

 

$

2,406,798

 

Europe

$

76,498

 

 

$

78,635

 

 

$

102,480

 

 

$

141,608

 

 

$

113,619

 

 

$

152,268

 

Europe – YoY

 

61

%

 

 

30

%

 

 

49

%

 

 

54

%

 

 

49

%

 

 

94

%

Europe – TTM

$

297,557

 

 

$

315,559

 

 

$

349,486

 

 

$

399,221

 

 

$

436,342

 

 

$

509,975

 

Rest of World

$

70,330

 

 

$

68,783

 

 

$

83,260

 

 

$

110,551

 

 

$

102,993

 

 

$

128,105

 

Rest of World – YoY

 

49

%

 

 

2

%

 

 

35

%

 

 

27

%

 

 

46

%

 

 

86

%

Rest of World – TTM

$

286,308

 

 

$

287,717

 

 

$

309,360

 

 

$

332,924

 

 

$

365,587

 

 

$

424,909

 

Operating loss

$

(286,364

)

 

$

(310,608

)

 

$

(167,864

)

 

$

(97,236

)

 

$

(303,606

)

 

$

(192,512

)

Operating loss – YoY

 

9

%

 

 

(2

)%

 

 

27

%

 

 

62

%

 

 

(6

)%

 

 

38

%

Operating loss – Margin

 

(62

)%

 

 

(68

)%

 

 

(25

)%

 

 

(11

)%

 

 

(39

)%

 

 

(20

)%

Operating loss – TTM

$

(1,073,631

)

 

$

(1,079,421

)

 

$

(1,018,432

)

 

$

(862,072

)

 

$

(879,314

)

 

$

(761,218

)

Net loss

$

(305,936

)

 

$

(325,951

)

 

$

(199,853

)

 

$

(113,099

)

 

$

(286,882

)

 

$

(151,664

)

Net loss – YoY

 

1

%

 

 

(28

)%

 

 

12

%

 

 

53

%

 

 

6

%

 

 

53

%

Net loss – TTM

$

(1,029,189

)

 

$

(1,099,966

)

 

$

(1,072,444

)

 

$

(944,839

)

 

$

(925,785

)

 

$

(751,498

)

Adjusted EBITDA

$

(81,237

)

 

$

(95,570

)

 

$

56,361

 

 

$

165,609

 

 

$

(1,709

)

 

$

117,403

 

Adjusted EBITDA – YoY

 

34

%

 

 

(21

)%

 

 

233

%

 

 

291

%

 

 

98

%

 

 

223

%

Adjusted EBITDA – Margin(2)

 

(18

)%

 

 

(21

)%

 

 

8

%

 

 

18

%

 

 

 

 

 

12

%

Adjusted EBITDA – TTM

$

(160,018

)

 

$

(176,875

)

 

$

(78,139

)

 

$

45,163

 

 

$

124,691

 

 

$

337,664

 

(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, unaudited)

 

 

Q1 2020

 

 

Q2 2020

 

 

Q3 2020

 

 

Q4 2020

 

 

Q1 2021

 

 

Q2 2021

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DAU (in millions)

 

229

 

 

 

238

 

 

 

249

 

 

 

265

 

 

 

280

 

 

 

293

 

DAU – YoY

 

20

%

 

 

17

%

 

 

18

%

 

 

22

%

 

 

22

%

 

 

23

%

DAU by region (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

88

 

 

 

90

 

 

 

90

 

 

 

92

 

 

 

93

 

 

 

95

 

North America – YoY

 

10

%

 

 

9

%

 

 

7

%

 

 

6

%

 

 

5

%

 

 

6

%

Europe

 

70

 

 

 

71

 

 

 

72

 

 

 

74

 

 

 

77

 

 

 

78

 

Europe – YoY

 

14

%

 

 

12

%

 

 

10

%

 

 

10

%

 

 

9

%

 

 

10

%

Rest of World

 

71

 

 

 

77

 

 

 

87

 

 

 

99

 

 

 

111

 

 

 

120

 

Rest of World – YoY

 

45

%

 

 

37

%

 

 

43

%

 

 

55

%

 

 

57

%

 

 

55

%

ARPU

$

2.02

 

 

$

1.91

 

 

$

2.73

 

 

$

3.44

 

 

$

2.74

 

 

$

3.35

 

ARPU – YoY

 

20

%

 

 

 

 

 

28

%

 

 

33

%

 

 

36

%

 

 

76

%

ARPU by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

3.57

 

 

$

3.40

 

 

$

5.49

 

 

$

7.19

 

 

$

5.94

 

 

$

7.37

 

North America – YoY

 

27

%

 

 

8

%

 

 

46

%

 

 

63

%

 

 

66

%

 

 

116

%

Europe

$

1.09

 

 

$

1.10

 

 

$

1.43

 

 

$

1.91

 

 

$

1.48

 

 

$

1.95

 

Europe – YoY

 

41

%

 

 

16

%

 

 

36

%

 

 

39

%

 

 

36

%

 

 

76

%

Rest of World

$

1.00

 

 

$

0.89

 

 

$

0.95

 

 

$

1.11

 

 

$

0.93

 

 

$

1.07

 

Rest of World – YoY

 

3

%

 

 

(26

)%

 

 

(6

)%

 

 

(18

)%

 

 

(7

)%

 

 

20

%

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

 

3,427

 

 

 

3,550

 

 

 

3,713

 

 

 

3,863

 

 

 

4,043

 

 

 

4,667

 

Employees – YoY

 

22

%

 

 

30

%

 

 

28

%

 

 

21

%

 

 

18

%

 

 

31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

5,525

 

 

$

5,532

 

 

$

5,615

 

 

$

5,533

 

 

$

5,276

 

 

$

4,727

 

Research and development

 

8,915

 

 

 

8,463

 

 

 

9,526

 

 

 

10,723

 

 

 

11,036

 

 

 

14,358

 

Sales and marketing

 

3,166

 

 

 

3,381

 

 

 

3,233

 

 

 

3,136

 

 

 

3,186

 

 

 

5,162

 

General and administrative

 

3,598

 

 

 

3,549

 

 

 

3,430

 

 

 

3,419

 

 

 

4,000

 

 

 

4,023

 

Total

$

21,204

 

 

$

20,925

 

 

$

21,804

 

 

$

22,811

 

 

$

23,498

 

 

$

28,270

 

Depreciation and amortization expense – YoY

 

(9

)%

 

 

(8

)%

 

 

6

%

 

 

11

%

 

 

11

%

 

 

35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

1,782

 

 

$

2,066

 

 

$

2,623

 

 

$

2,896

 

 

$

2,656

 

 

$

2,847

 

Research and development

 

118,317

 

 

 

127,516

 

 

 

132,003

 

 

 

155,436

 

 

 

163,793

 

 

 

174,491

 

Sales and marketing

 

24,806

 

 

 

27,107

 

 

 

27,393

 

 

 

28,964

 

 

 

29,084

 

 

 

37,491

 

General and administrative

 

27,144

 

 

 

29,482

 

 

 

30,061

 

 

 

32,586

 

 

 

41,450

 

 

 

41,771

 

Total

$

172,049

 

 

$

186,171

 

 

$

192,080

 

 

$

219,882

 

 

$

237,073

 

 

$

256,600

 

Stock-based compensation expense – YoY

 

6

%

 

 

(5

)%

 

 

19

%

 

 

32

%

 

 

38

%

 

 

38

%