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Snap Inc. Announces Fourth Quarter and Full Year 2021 Financial Results

Daily Active Users increased 20% year-over-year to 319 million

Fourth quarter revenue increased 42% and full year revenue increased 64% year-over-year

First quarter of positive net income as a public company

First full year of positive operating cash flow and Free Cash Flow

Snap Inc. (NYSE: SNAP) today announced financial results for the quarter and full year ended December 31, 2021.

“2021 was an exciting year for Snap and we made significant progress growing our business and serving our global community,” said Evan Spiegel, CEO. “The strength of our core business has enabled us to accelerate our investments in augmented reality, transforming the way that the Snapchat community experiences the world through our camera.”

Annual Financial Highlights

  • Revenue increased 64% to $4.1 billion in 2021, compared to the prior year.
  • Net loss improved 48% to $488 million in 2021, compared to the prior year.
  • Second consecutive year of positive Adjusted EBITDA with $617 million in 2021.
  • First full year of positive operating cash flow and Free Cash Flow of $293 million and $223 million.

Quarterly Financial Highlights

  • Revenue increased 42% to $1.3 billion in Q4 2021, compared to the prior year.
  • First quarter of positive net income as a public company of $23 million in Q4 2021.
  • Adjusted EBITDA improved 97% to $327 million in Q4 2021, compared to the prior year.
  • Operating cash flow was $186 million in Q4 2021, compared to $(53) million in the prior year.
  • Free Cash Flow was $161 million in Q4 2021, compared to $(69) million in the prior year.

 

Three Months Ended December 31,

 

 

Percent

 

 

Twelve Months Ended December 31,

 

 

Percent

 

 

2021

 

 

2020

 

 

Change

 

 

2021

 

 

2020

 

 

Change

 

(Unaudited)

(in thousands, except per share amounts)

 

Revenue

$

1,297,885

 

 

$

911,322

 

 

 

42

%

 

$

4,117,048

 

 

$

2,506,626

 

 

 

64

%

Operating loss

$

(25,127

)

 

$

(97,236

)

 

 

74

%

 

$

(702,069

)

 

$

(862,072

)

 

 

19

%

Net income (loss)

$

22,550

 

 

$

(113,099

)

 

 

120

%

 

$

(487,955

)

 

$

(944,839

)

 

 

48

%

Adjusted EBITDA(1)

$

326,793

 

 

$

165,609

 

 

 

97

%

 

$

616,686

 

 

$

45,163

 

 

 

1,265

%

Net cash provided by (used in) operating activities

$

185,528

 

 

$

(52,545

)

 

 

453

%

 

$

292,880

 

 

$

(167,644

)

 

 

275

%

Free Cash Flow(2)

$

160,963

 

 

$

(68,992

)

 

 

333

%

 

$

223,005

 

 

$

(225,476

)

 

 

199

%

Diluted net income (loss) per share attributable to common stockholders

$

0.01

 

 

$

(0.08

)

 

 

118

%

 

$

(0.31

)

 

$

(0.65

)

 

 

52

%

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

$

0.22

 

 

$

0.09

 

 

 

135

%

 

$

0.50

 

 

$

(0.06

)

 

 

895

%

(1)

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

(2)

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

(3)

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

Q4 2021 Summary & Key Highlights

The Snapchat community is active, engaged, and growing:

  • DAUs were 319 million in Q4 2021, an increase of 54 million, or 20%, year-over-year.
  • Year-over-year growth in DAUs has been 20% or more for five consecutive quarters.
  • DAUs increased sequentially and year-over-year in each of North America, Europe, and Rest of World.

We invested and innovated in our augmented reality platform:

  • Our 18 New Year's Eve Lenses generated more than 7 billion impressions.
  • We released several enhancements and new features to Lens Studio, including a new Sounds Library, real-world physics, world mesh, and an API library for real-time data.
  • Lens Creators can now include a Call-to-Action link within a Lens, making it easier for Lens Creators to grow their businesses.
  • We partnered with the Great Barrier Reef Foundation to launch a new Water Segmentation Lens, which shows a virtual reconstruction of the Great Barrier Reef and its ongoing degradation to inspire people to protect the world’s delicate reef system.
  • We rolled out Food Scan, the newest improvement to our Camera that uses the powerful visual recognition capabilities of Scan to understand different food and ingredients and provide recipe recommendations.

We invested in our content offerings:

  • The number of Spotlight viewers subscribing to a Creator more than doubled relative to the prior quarter.
  • Over 20 Spotlight creators are also syndicating Shows on Discover, including beauty entrepreneur Patrick Starrr and crafting expert Lauren Riihimäki, who each reached 5 million Snapchatters with their Shows.
  • We renewed our partnerships with three of the top premium broadcasters in the world: NBCUniversal, ViacomCBS, and Disney, who are responsible for popular shows on Discover including The Rundown, MTV Presents, and ESPN GameDay, respectively.
  • In Q4 2021, 25 different Discover partners each reached over 50 million unique Snapchatters globally, including Universal Music’s Rebel Labs, social publisher Jungle Creations’ lifestyle content, and Team Whistle’s sports content.
  • In Q4 2021, we added more than 160 new international Discover channels and onboarded new partners including Seven.One Entertainment Group in Germany and Canal+ in France.
  • We partnered with Kim Kardashian West and Kris Jenner to launch the Kindness Spotlight Challenge, which generated the most submissions for a challenge to date; we partnered with Mariah Carey to launch her hit song “All I Want for Christmas is You” via Sounds on Snapchat and as a Spotlight Challenge, which inspired the creation of over 3.5 million videos featuring the song and over 300 million views.
  • Our new Snap Original “The Me and You Show”, which stars Snapchatters and their friends using our Cameos feature, reached over 50 million viewers.

We expanded our product and partner ecosystem:

  • We launched our first two Snap Map Layers, Memories and Explore, which allow users to view their saved Snaps by location and explore new ones around the world and have been used over 100 million times since launch.
  • We partnered with e-commerce company Flipkart and cosmetics companies Sugar Cosmetics and MyGlamm to bring more AR shopping and virtual try-on experiences to Snapchatters in India.
  • We launched new Lenses with our Camera Kit partner Disney’s PhotoPass service featuring iconic Disney characters like Elsa from Frozen and Timon from The Lion King.
  • We released “Quick Tap to Snap” for Google’s Pixel 6 and Pixel 6 Pro phones, enabling users to access the Snapchat Camera directly from the lockscreen with two taps.
  • We partnered with Sony Music Entertainment, expanding the library of songs for Snapchatters to use in Sounds, Lenses, and more to all major publishers.
  • We partnered with NBCUniversal so Snapchatters can add audio clips from popular TV shows and movies such as The Office, Saturday Night Live, and Bridesmaids to their Snaps.

We expanded our offering for advertisers:

  • Our first party measurement solutions are now enabled for advertisers that represent more than 75% of our Direct Response revenue.
  • We rolled out multi-format delivery of ad creatives, allowing advertisers to utilize a single ad set across multiple ad formats, and for Snap to optimize delivery.
  • We released seven new courses in Snap Focus, our learning portal for marketers, covering topics from general campaign optimization and brand safety to privacy-centric measurement solutions such as Advanced Conversions.
  • We launched Catalog-powered Shopping Lenses, which provide real-time results for brands on SKU-level augmented reality product engagement, and introduced a new AR try-on shopping interface for Snapchatters.
  • Cosmetics company MAC utilized our self-service Lens Web Builder tool, which is now broadly available to all beauty brands, to build several AR try-on makeup Lenses. The campaign ultimately drove 1.3 million try-ons, a 2.4x higher lift in Brand Awareness, a 9x higher lift in Intent, and among female Snapchatters, a 17x higher lift in Purchases.

Financial Guidance

The following forward-looking statements reflect our expectations for the first quarter of 2022 as of February 3, 2022, and are subject to substantial uncertainty. This guidance assumes constant foreign currency rates, and among other things, that no business acquisitions, divestitures, investments, exits, 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.”

Q1 2022 Outlook

  • Revenue is estimated to be between $1,030 million and $1,080 million.
  • Adjusted EBITDA is estimated to be approximately breakeven.

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 its websites (including snap.com and investor.snap.com) 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, objectives of management for future operations, and advertiser and partner offerings, 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 historical profitability; 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; future acquisitions, divestitures or investments; and the potential adverse impact of climate change, natural disasters, and health epidemics, 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 income (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 income (loss) and weighted average diluted shares are then used to calculate non-GAAP diluted net income (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

December 31,

 

 

Twelve Months Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

22,550

 

 

$

(113,099

)

 

$

(487,955

)

 

$

(944,839

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

34,863

 

 

 

22,811

 

 

 

119,141

 

 

 

86,744

 

Stock-based compensation

 

297,564

 

 

 

219,882

 

 

 

1,092,135

 

 

 

770,182

 

Amortization of debt discount and issuance costs

 

1,010

 

 

 

24,923

 

 

 

4,311

 

 

 

81,401

 

(Gains) losses on debt and equity securities, net

 

(65,525

)

 

 

 

 

 

(289,052

)

 

 

(10,250

)

Induced conversion expense related to convertible notes

 

 

 

 

 

 

 

41,538

 

 

 

 

Other

 

4,624

 

 

 

(18,958

)

 

 

8,643

 

 

 

2,963

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable, net of allowance

 

(154,923

)

 

 

(212,508

)

 

 

(332,967

)

 

 

(255,818

)

Prepaid expenses and other current assets

 

(11,045

)

 

 

4,765

 

 

 

(26,607

)

 

 

(14,587

)

Operating lease right-of-use assets

 

12,041

 

 

 

10,633

 

 

 

47,258

 

 

 

38,940

 

Other assets

 

(5,476

)

 

 

(13,785

)

 

 

(10,916

)

 

 

(11,442

)

Accounts payable

 

36,149

 

 

 

8,926

 

 

 

53,579

 

 

 

20,374

 

Accrued expenses and other current liabilities

 

27,366

 

 

 

14,233

 

 

 

117,092

 

 

 

108,601

 

Operating lease liabilities

 

(14,029

)

 

 

(8,991

)

 

 

(49,294

)

 

 

(49,730

)

Other liabilities

 

359

 

 

 

8,623

 

 

 

5,974

 

 

 

9,817

 

Net cash provided by (used in) operating activities

 

185,528

 

 

 

(52,545

)

 

 

292,880

 

 

 

(167,644

)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(24,565

)

 

 

(16,447

)

 

 

(69,875

)

 

 

(57,832

)

Purchases of strategic investments

 

(7,650

)

 

 

(16,245

)

 

 

(41,160

)

 

 

(111,586

)

Cash paid for acquisitions, net of cash acquired

 

(134,324

)

 

 

(115,138

)

 

 

(310,915

)

 

 

(168,850

)

Purchases of marketable securities

 

(542,217

)

 

 

(947,707

)

 

 

(2,438,983

)

 

 

(3,524,599

)

Sales of marketable securities

 

12,000

 

 

 

16,117

 

 

 

379,555

 

 

 

389,974

 

Maturities of marketable securities

 

529,981

 

 

 

839,347

 

 

 

2,536,725

 

 

 

2,737,523

 

Other

 

(220

)

 

 

6,006

 

 

 

34,880

 

 

 

5,506

 

Net cash provided by (used in) investing activities

 

(166,995

)

 

 

(234,067

)

 

 

90,227

 

 

 

(729,864

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible notes, net of issuance costs

 

 

 

 

8,168

 

 

 

1,137,227

 

 

 

988,582

 

Purchase of capped calls

 

 

 

 

 

 

 

(86,825

)

 

 

(100,000

)

Proceeds from the exercise of stock options

 

2,916

 

 

 

 

 

 

14,671

 

 

 

34,209

 

Net cash provided by financing activities

 

2,916

 

 

 

8,168

 

 

 

1,065,073

 

 

 

922,791

 

Change in cash, cash equivalents, and restricted cash

 

21,449

 

 

 

(278,444

)

 

 

1,448,180

 

 

 

25,283

 

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

 

1,973,274

 

 

 

824,987

 

 

 

546,543

 

 

 

521,260

 

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

$

1,994,723

 

 

$

546,543

 

 

$

1,994,723

 

 

$

546,543

 

Supplemental disclosures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for income taxes, net

$

9,105

 

 

$

1,013

 

 

$

25,333

 

 

$

3,692

 

Cash paid for interest

$

638

 

 

$

1,641

 

 

$

10,887

 

 

$

12,019

 

Supplemental disclosures of non-cash activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in accounts payable and accrued expenses and other current liabilities related to property and equipment additions

$

2,370

 

 

$

1,584

 

 

$

6,498

 

 

$

2,732

 

SNAP INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

$

1,297,885

 

 

$

911,322

 

 

$

4,117,048

 

 

$

2,506,626

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

449,151

 

 

 

385,546

 

 

 

1,750,246

 

 

 

1,182,505

 

Research and development

 

434,195

 

 

 

318,446

 

 

 

1,565,467

 

 

 

1,101,561

 

Sales and marketing

 

245,228

 

 

 

157,634

 

 

 

792,764

 

 

 

555,468

 

General and administrative

 

194,438

 

 

 

146,932

 

 

 

710,640

 

 

 

529,164

 

Total costs and expenses

 

1,323,012

 

 

 

1,008,558

 

 

 

4,819,117

 

 

 

3,368,698

 

Operating loss

 

(25,127

)

 

 

(97,236

)

 

 

(702,069

)

 

 

(862,072

)

Interest income

 

1,554

 

 

 

1,969

 

 

 

5,199

 

 

 

18,127

 

Interest expense

 

(4,050

)

 

 

(29,176

)

 

 

(17,676

)

 

 

(97,228

)

Other income (expense), net

 

63,204

 

 

 

29,471

 

 

 

240,175

 

 

 

14,988

 

Gain (loss) before income taxes

 

35,581

 

 

 

(94,972

)

 

 

(474,371

)

 

 

(926,185

)

Income tax benefit (expense)

 

(13,031

)

 

 

(18,127

)

 

 

(13,584

)

 

 

(18,654

)

Net income (loss)

$

22,550

 

 

$

(113,099

)

 

$

(487,955

)

 

$

(944,839

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.01

 

 

$

(0.08

)

 

$

(0.31

)

 

$

(0.65

)

Diluted

$

0.01

 

 

$

(0.08

)

 

$

(0.31

)

 

$

(0.65

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

1,604,778

 

 

 

1,484,277

 

 

 

1,558,997

 

 

 

1,455,693

 

Diluted

 

1,668,879

 

 

 

1,484,277

 

 

 

1,558,997

 

 

 

1,455,693

 

SNAP INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

 

 

December 31,

2021

 

 

September 30,

2021

 

December 31,

2020

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

1,993,809

 

 

$

1,972,358

 

 

$

545,618

 

Marketable securities

 

1,699,076

 

 

 

1,509,463

 

 

 

1,991,922

 

Accounts receivable, net of allowance

 

1,068,873

 

 

 

913,539

 

 

 

744,288

 

Prepaid expenses and other current assets

 

92,244

 

 

 

76,669

 

 

 

56,147

 

Total current assets

 

4,854,002

 

 

 

4,472,029

 

 

 

3,337,975

 

Property and equipment, net

 

202,644

 

 

 

189,946

 

 

 

178,709

 

Operating lease right-of-use assets

 

322,252

 

 

 

291,181

 

 

 

269,728

 

Intangible assets, net

 

277,654

 

 

 

261,131

 

 

 

105,929

 

Goodwill

 

1,588,452

 

 

 

1,484,108

 

 

 

939,259

 

Other assets

 

291,302

 

 

 

412,770

 

 

 

192,638

 

Total assets

$

7,536,306

 

 

$

7,111,165

 

 

$

5,024,238

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

125,282

 

 

$

91,769

 

 

$

71,908

 

Operating lease liabilities

 

52,396

 

 

 

56,191

 

 

 

41,077

 

Accrued expenses and other current liabilities

 

674,108

 

 

 

660,536

 

 

 

554,342

 

Total current liabilities

 

851,786

 

 

 

808,496

 

 

 

667,327

 

Convertible senior notes, net

 

2,253,087

 

 

 

2,252,079

 

 

 

1,675,169

 

Operating lease liabilities, noncurrent

 

325,509

 

 

 

292,506

 

 

 

287,292

 

Other liabilities

 

315,756

 

 

 

317,968

 

 

 

64,474

 

Total liabilities

 

3,746,138

 

 

 

3,671,049

 

 

 

2,694,262

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

 

 

 

 

 

Class A non-voting common stock, $0.00001 par value. 3,000,000 shares authorized, 1,364,887, 1,349,890, and 1,248,010 shares issued and outstanding at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

 

14

 

 

 

13

 

 

 

12

 

Class B voting common stock, $0.00001 par value. 700,000 shares authorized, 22,769, 23,636, and 23,696 shares issued and outstanding at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.

 

 

 

 

 

 

 

 

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

 

2

 

 

 

2

 

 

 

2

 

Additional paid-in capital

 

12,069,097

 

 

 

11,737,338

 

 

 

10,200,141

 

Accumulated other comprehensive income (loss)

 

5,521

 

 

 

9,779

 

 

 

21,363

 

Accumulated deficit

 

(8,284,466

)

 

 

(8,307,016

)

 

 

(7,891,542

)

Total stockholders’ equity

 

3,790,168

 

 

 

3,440,116

 

 

 

2,329,976

 

Total liabilities and stockholders’ equity

$

7,536,306

 

 

$

7,111,165

 

 

$

5,024,238

 

SNAP INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, unaudited)

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Free Cash Flow reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

185,528

 

 

$

(52,545

)

 

$

292,880

 

 

$

(167,644

)

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(24,565

)

 

 

(16,447

)

 

 

(69,875

)

 

 

(57,832

)

Free Cash Flow

$

160,963

 

 

$

(68,992

)

 

$

223,005

 

 

$

(225,476

)

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Adjusted EBITDA reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

22,550

 

 

$

(113,099

)

 

$

(487,955

)

 

$

(944,839

)

Add (deduct):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

(1,554

)

 

 

(1,969

)

 

 

(5,199

)

 

 

(18,127

)

Interest expense

 

4,050

 

 

 

29,176

 

 

 

17,676

 

 

 

97,228

 

Other (income) expense, net

 

(63,204

)

 

 

(29,471

)

 

 

(240,175

)

 

 

(14,988

)

Income tax (benefit) expense

 

13,031

 

 

 

18,127

 

 

 

13,584

 

 

 

18,654

 

Depreciation and amortization

 

34,863

 

 

 

22,811

 

 

 

119,141

 

 

 

86,744

 

Stock-based compensation expense

 

297,564

 

 

 

219,882

 

 

 

1,092,135

 

 

 

770,182

 

Payroll tax expense related to stock-based compensation

 

19,493

 

 

 

20,152

 

 

 

107,479

 

 

 

50,309

 

Adjusted EBITDA

$

326,793

 

 

$

165,609

 

 

$

616,686

 

 

$

45,163

 

Total depreciation and amortization expense by function:

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Depreciation and amortization expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

4,832

 

 

$

5,533

 

 

$

19,711

 

 

$

22,205

 

Research and development

 

19,444

 

 

 

10,723

 

 

 

62,159

 

 

 

37,627

 

Sales and marketing

 

7,118

 

 

 

3,136

 

 

 

21,772

 

 

 

12,916

 

General and administrative

 

3,469

 

 

 

3,419

 

 

 

15,499

 

 

 

13,996

 

Total

$

34,863

 

 

$

22,811

 

 

$

119,141

 

 

$

86,744

 

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

December 31,

 

 

Twelve Months Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Stock-based compensation expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

2,586

 

 

$

2,896

 

 

$

17,221

 

 

$

9,367

 

Research and development

 

202,953

 

 

 

155,436

 

 

 

740,130

 

 

 

533,272

 

Sales and marketing

 

45,991

 

 

 

28,964

 

 

 

164,241

 

 

 

108,270

 

General and administrative

 

46,034

 

 

 

32,586

 

 

 

170,543

 

 

 

119,273

 

Total

$

297,564

 

 

$

219,882

 

 

$

1,092,135

 

 

$

770,182

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Non-GAAP net income (loss) reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

22,550

 

 

$

(113,099

)

 

$

(487,955

)

 

$

(944,839

)

Amortization of intangible assets

 

20,228

 

 

 

9,727

 

 

 

63,184

 

 

 

33,507

 

Stock-based compensation expense

 

297,564

 

 

 

219,882

 

 

 

1,092,135

 

 

 

770,182

 

Payroll tax expense related to stock-based compensation

 

19,493

 

 

 

20,152

 

 

 

107,479

 

 

 

50,309

 

Income tax adjustments

 

(374

)

 

 

(511

)

 

 

(192

)

 

 

(96

)

Non-GAAP net income (loss)

$

359,461

 

 

$

136,151

 

 

$

774,651

 

 

$

(90,937

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares - Diluted(1)

 

1,668,879

 

 

 

1,484,277

 

 

 

1,558,997

 

 

 

1,455,693

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income (loss) per share

$

0.01

 

 

$

(0.08

)

 

$

(0.31

)

 

$

(0.65

)

Non-GAAP adjustment to net income (loss)

 

0.21

 

 

 

0.17

 

 

 

0.81

 

 

 

0.59

 

Non-GAAP diluted net income (loss) per share

$

0.22

 

 

$

0.09

 

 

$

0.50

 

 

$

(0.06

)

(1)

For the three months ended December 31, 2021, the weighted average common shares used in computation of diluted net income per share excludes shares underlying outstanding convertible notes and capped calls as such shares were anti-dilutive. For the twelve months ended December 31, 2021, and the three and twelve months ended December 31, 2020, the weighted average common shares used in computation of diluted net loss per share excludes shares underlying outstanding stock-based awards, convertible notes, and capped calls as such shares were anti-dilutive.

SNAP INC.

SUPPLEMENTAL FINANCIAL INFORMATION AND BUSINESS METRICS

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

 

 

Q3 2020

 

 

Q4 2020

 

 

Q1 2021

 

 

Q2 2021

 

 

Q3 2021

 

 

Q4 2021

 

Cash Flows and Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

(54,828

)

 

$

(52,545

)

 

$

136,886

 

 

$

(101,086

)

 

$

71,552

 

 

$

185,528

 

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

 

28

%

 

 

21

%

 

 

(2,079

)%

 

 

(52

)%

 

 

231

%

 

 

453

%

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

$

(181,941

)

 

$

(167,644

)

 

$

(37,041

)

 

$

(71,573

)

 

$

54,807

 

 

$

292,880

 

Purchases of property and equipment

$

(14,727

)

 

$

(16,447

)

 

$

(10,851

)

 

$

(14,623

)

 

$

(19,836

)

 

$

(24,565

)

Purchases of property and equipment - YoY

 

86

%

 

 

81

%

 

 

 

 

 

(7

)%

 

 

35

%

 

 

49

%

Purchases of property and equipment - TTM

$

(50,478

)

 

$

(57,832

)

 

$

(57,792

)

 

$

(56,648

)

 

$

(61,757

)

 

$

(69,875

)

Free Cash Flow

$

(69,555

)

 

$

(68,992

)

 

$

126,035

 

 

$

(115,709

)

 

$

51,716

 

 

$

160,963

 

Free Cash Flow - YoY

 

17

%

 

 

9

%

 

 

2,835

%

 

 

(41

)%

 

 

174

%

 

 

333

%

Free Cash Flow - TTM

$

(232,419

)

 

$

(225,476

)

 

$

(94,833

)

 

$

(128,221

)

 

$

(6,950

)

 

$

223,005

 

Common shares outstanding

 

1,484,716

 

 

 

1,503,333

 

 

 

1,519,001

 

 

 

1,576,744

 

 

 

1,605,153

 

 

 

1,619,283

 

Common shares outstanding - YoY

 

7

%

 

 

6

%

 

 

6

%

 

 

8

%

 

 

8

%

 

 

8

%

Shares underlying stock-based awards

 

138,914

 

 

 

126,287

 

 

 

110,190

 

 

 

104,516

 

 

 

92,726

 

 

 

82,814

 

Shares underlying stock-based awards - YoY

 

(21

)%

 

 

(21

)%

 

 

(26

)%

 

 

(31

)%

 

 

(33

)%

 

 

(34

)%

Total common shares outstanding plus shares underlying stock-based awards

 

1,623,630

 

 

 

1,629,620

 

 

 

1,629,191

 

 

 

1,681,260

 

 

 

1,697,879

 

 

 

1,702,097

 

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

 

4

%

 

 

3

%

 

 

3

%

 

 

4

%

 

 

5

%

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Results of Operations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

$

678,668

 

 

$

911,322

 

 

$

769,584

 

 

$

982,108

 

 

$

1,067,471

 

 

$

1,297,885

 

Revenue - YoY

 

52

%

 

 

62

%

 

 

66

%

 

 

116

%

 

 

57

%

 

 

42

%

Revenue - TTM

$

2,156,193

 

 

$

2,506,626

 

 

$

2,813,732

 

 

$

3,341,682

 

 

$

3,730,485

 

 

$

4,117,048

 

Revenue by region(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

492,928

 

 

$

659,163

 

 

$

552,972

 

 

$

701,735

 

 

$

786,917

 

 

$

932,077

 

North America - YoY

 

56

%

 

 

73

%

 

 

75

%

 

 

129

%

 

 

60

%

 

 

41

%

North America - TTM

$

1,497,347

 

 

$

1,774,481

 

 

$

2,011,803

 

 

$

2,406,798

 

 

$

2,700,787

 

 

$

2,973,701

 

Europe

$

102,480

 

 

$

141,608

 

 

$

113,619

 

 

$

152,268

 

 

$

153,121

 

 

$

208,912

 

Europe - YoY

 

49

%

 

 

54

%

 

 

49

%

 

 

94

%

 

 

49

%

 

 

48

%

Europe - TTM

$

349,486

 

 

$

399,221

 

 

$

436,342

 

 

$

509,975

 

 

$

560,616

 

 

$

627,920

 

Rest of World

$

83,260

 

 

$

110,551

 

 

$

102,993

 

 

$

128,105

 

 

$

127,433

 

 

$

156,896

 

Rest of World - YoY

 

35

%

 

 

27

%

 

 

46

%

 

 

86

%

 

 

53

%

 

 

42

%

Rest of World - TTM

$

309,360

 

 

$

332,924

 

 

$

365,587

 

 

$

424,909

 

 

$

469,082

 

 

$

515,427

 

Operating loss

$

(167,864

)

 

$

(97,236

)

 

$

(303,606

)

 

$

(192,512

)

 

$

(180,824

)

 

$

(25,127

)

Operating loss - YoY

 

27

%

 

 

62

%

 

 

(6

)%

 

 

38

%

 

 

(8

)%

 

 

74

%

Operating loss - Margin

 

(25

)%

 

 

(11

)%

 

 

(39

)%

 

 

(20

)%

 

 

(17

)%

 

 

(2

)%

Operating loss - TTM

$

(1,018,432

)

 

$

(862,072

)

 

$

(879,314

)

 

$

(761,218

)

 

$

(774,178

)

 

$

(702,069

)

Net income (loss)

$

(199,853

)

 

$

(113,099

)

 

$

(286,882

)

 

$

(151,664

)

 

$

(71,959

)

 

$

22,550

 

Net income (loss) - YoY

 

12

%

 

 

53

%

 

 

6

%

 

 

53

%

 

 

64

%

 

 

120

%

Net income (loss) - TTM

$

(1,072,444

)

 

$

(944,839

)

 

$

(925,785

)

 

$

(751,498

)

 

$

(623,604

)

 

$

(487,955

)

Adjusted EBITDA

$

56,361

 

 

$

165,609

 

 

$

(1,709

)

 

$

117,403

 

 

$

174,199

 

 

$

326,793

 

Adjusted EBITDA - YoY

 

233

%

 

 

291

%

 

 

98

%

 

 

223

%

 

 

209

%

 

 

97

%

Adjusted EBITDA - Margin(2)

 

8

%

 

 

18

%

 

 

 

 

 

12

%

 

 

16

%

 

 

25

%

Adjusted EBITDA - TTM

$

(78,139

)

 

$

45,163

 

 

$

124,691

 

 

$

337,664

 

 

$

455,502

 

 

$

616,686

 

(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)

 

 

Q3 2020

 

 

Q4 2020

 

 

Q1 2021

 

 

Q2 2021

 

 

Q3 2021

 

 

Q4 2021

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DAU (in millions)

 

249

 

 

 

265

 

 

 

280

 

 

 

293

 

 

 

306

 

 

 

319

 

DAU - YoY

 

18

%

 

 

22

%

 

 

22

%

 

 

23

%

 

 

23

%

 

 

20

%

DAU by region (in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

90

 

 

 

92

 

 

 

93

 

 

 

95

 

 

 

96

 

 

 

97

 

North America - YoY

 

7

%

 

 

6

%

 

 

5

%

 

 

6

%

 

 

7

%

 

 

6

%

Europe

 

72

 

 

 

74

 

 

 

77

 

 

 

78

 

 

 

80

 

 

 

82

 

Europe - YoY

 

10

%

 

 

10

%

 

 

9

%

 

 

10

%

 

 

11

%

 

 

11

%

Rest of World

 

87

 

 

 

99

 

 

 

111

 

 

 

120

 

 

 

130

 

 

 

140

 

Rest of World - YoY

 

43

%

 

 

55

%

 

 

57

%

 

 

55

%

 

 

49

%

 

 

41

%

ARPU

$

2.73

 

 

$

3.44

 

 

$

2.74

 

 

$

3.35

 

 

$

3.49

 

 

$

4.06

 

ARPU - YoY

 

28

%

 

 

33

%

 

 

36

%

 

 

76

%

 

 

28

%

 

 

18

%

ARPU by region

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

$

5.49

 

 

$

7.19

 

 

$

5.94

 

 

$

7.37

 

 

$

8.20

 

 

$

9.58

 

North America - YoY

 

46

%

 

 

63

%

 

 

66

%

 

 

116

%

 

 

49

%

 

 

33

%

Europe

$

1.43

 

 

$

1.91

 

 

$

1.48

 

 

$

1.95

 

 

$

1.92

 

 

$

2.54

 

Europe - YoY

 

36

%

 

 

39

%

 

 

36

%

 

 

76

%

 

 

34

%

 

 

33

%

Rest of World

$

0.95

 

 

$

1.11

 

 

$

0.93

 

 

$

1.07

 

 

$

0.98

 

 

$

1.12

 

Rest of World - YoY

 

(6

)%

 

 

(18

)%

 

 

(7

)%

 

 

20

%

 

 

3

%

 

 

1

%

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

 

3,713

 

 

 

3,863

 

 

 

4,043

 

 

 

4,667

 

 

 

5,190

 

 

 

5,661

 

Employees - YoY

 

28

%

 

 

21

%

 

 

18

%

 

 

31

%

 

 

40

%

 

 

47

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

5,615

 

 

$

5,533

 

 

$

5,276

 

 

$

4,727

 

 

$

4,876

 

 

$

4,832

 

Research and development

 

9,526

 

 

 

10,723

 

 

 

11,036

 

 

 

14,358

 

 

 

17,321

 

 

 

19,444

 

Sales and marketing

 

3,233

 

 

 

3,136

 

 

 

3,186

 

 

 

5,162

 

 

 

6,306

 

 

 

7,118

 

General and administrative

 

3,430

 

 

 

3,419

 

 

 

4,000

 

 

 

4,023

 

 

 

4,007

 

 

 

3,469

 

Total

$

21,804

 

 

$

22,811

 

 

$

23,498

 

 

$

28,270

 

 

$

32,510

 

 

$

34,863

 

Depreciation and amortization expense - YoY

 

6

%

 

 

11

%

 

 

11

%

 

 

35

%

 

 

49

%

 

 

53

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

2,623

 

 

$

2,896

 

 

$

2,656

 

 

$

2,847

 

 

$

9,132

 

 

$

2,586

 

Research and development

 

132,003

 

 

 

155,436

 

 

 

163,793

 

 

 

174,491

 

 

 

198,893

 

 

 

202,953

 

Sales and marketing

 

27,393

 

 

 

28,964

 

 

 

29,084

 

 

 

37,491

 

 

 

51,675

 

 

 

45,991

 

General and administrative

 

30,061

 

 

 

32,586

 

 

 

41,450

 

 

 

41,771

 

 

 

41,198

 

 

 

46,034

 

Total

$

192,080

 

 

$

219,882

 

 

$

237,073

 

 

$

256,600

 

 

$

300,898

 

 

$

297,564

 

Stock-based compensation expense - YoY

 

19

%

 

 

32

%

 

 

38

%

 

 

38

%

 

 

57

%

 

 

35

%

 

Contacts

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