Snap Inc

Previous wording

•Daily Active Users, or DAUs, increased 10% year-over-year to 414 million in Q4 2023.

Current wording

•Daily Active Users, or DAUs, increased 9% year-over-year to 453 million in Q4 2024.

Previous wording

•Average revenue per user, or ARPU, was $3.29 in Q4 2023, compared to $3.47 in Q4 2022.

Current wording

•Average revenue per user, or ARPU, was $3.44 in Q4 2024 compared to $3.29 in Q4 2023.

Previous wording

•Revenue was $4.6 billion in 2023, compared to $4.6 billion in 2022.

Current wording

•Revenue was $5.4 billion, compared to $4.6 billion in the prior year, an increase of 16% year-over-year.

Previous wording

•Total costs and expenses were $6.0 billion in 2023, compared to $6.0 billion in 2022.

Current wording

•Total costs and expenses were $6.1 billion, compared to $6.0 billion in the prior year.

Previous wording

•Adjusted EBITDA was $161.6 million in 2023, compared to $377.6 million in 2022.

Current wording

•Adjusted EBITDA was $508.6 million, compared to $161.6 million in the prior year.

Previous wording

•Diluted net loss per share was $(0.82) in 2023, compared to $(0.89) in 2022.

Current wording

•Diluted net loss per share was $(0.42), compared to $(0.82) in the prior year.

Previous wording

•Cash provided by operating activities was $246.5 million in 2023, compared to $184.6 million in 2022.

Current wording

•Cash provided by operating activities was $413.5 million, compared to $246.5 million in the prior year.

Previous wording

•Free Cash Flow was $34.8 million in 2023, compared to $55.3 million in 2022.

Current wording

•Free Cash Flow was $218.7 million, compared to $34.8 million in the prior year.

Previous wording

•Cash, cash equivalents, and marketable securities were $3.5 billion as of December 31, 2023.

Current wording

•Cash, cash equivalents, and marketable securities were $3.4 billion as of December 31, 2024.

Previous wording

In 2022, we realigned our priorities and we expect to continue to focus on our three strategic priorities: growing our community and deepening their engagement with our products, accelerating and diversifying our revenue growth, and investing in the future of augmented reality. We believe that we can be successful in our current operating environment, with various macroeconomic factors impacting our business, by rigorously prioritizing our investments and continuing to engage our community with our products while driving success for our advertising partners. However, the impact of this strategic reprioritization is difficult to predict.

Current wording

We periodically make changes to our business and priorities. In recent years, we conducted a strategic reprioritization to realign our focus on three strategic priorities: growing our community and deepening their engagement with our products, accelerating and diversifying our revenue growth, and investing in the future of augmented reality. We believe that we can be successful in our current operating environment, with various macroeconomic factors impacting our business, by rigorously prioritizing our investments and continuing to engage our community with our products while driving success for our advertising partners. However, the impact of our strategic reprioritization and recent restructurings is difficult to predict.

Previous wording

Macroeconomic factors such as labor shortages and disruptions, supply chain disruptions, inflation, changes in interest and foreign currency exchange rates, banking instability, and other risks and uncertainties continue to cause logistical challenges, increased input costs, and inventory constraints for our advertisers, which in turn may cause our advertisers to halt or decrease advertising spending on our platform. Such macroeconomic factors may also negatively impact, in the short-term or long-term, the global economy, advertising ecosystem, our customers and their budgets with us, user engagement, other user metrics, and our business, financial condition, and results of operations.

Current wording

Macroeconomic factors such as labor shortages and disruptions, supply chain disruptions, inflation, changes in interest and foreign currency exchange rates, banking instability, tariffs, war and other armed conflict, and other risks and uncertainties have in the past and may continue to cause logistical challenges, increased input costs, and inventory constraints for our advertisers, which in turn may cause our advertisers to halt or decrease advertising spending on our platform. Such macroeconomic factors may also negatively impact, in the short-term or long-term, the global economy, advertising ecosystem, our customers and their budgets with us, user engagement, other user metrics, and our business, financial condition, and results of operations.

Previous wording

We define a DAU as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. We define ARPU as quarterly revenue divided by the average DAUs. We assess the health of our business by measuring DAUs and ARPU because we believe that these metrics are important ways for both management and investors to understand engagement and monitor the performance of our platform. We also measure ARPU because we believe that this metric helps our management and investors to assess the extent to which we are monetizing our service.

Current wording

We define a DAU as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at least once during a defined 24-hour period. We define ARPU as quarterly revenue divided by the average DAUs. We assess the health of our business by measuring DAUs and ARPU because we believe that these metrics are important ways for both management and investors to understand engagement and monitor the performance of our platform. We also measure ARPU because we believe that this metric helps our management and investors to assess the extent to which we are monetizing our service.

Previous wording

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. DAUs are broken out by geography because markets have different characteristics. We had 414 million DAUs on average in the fourth quarter of 2023, an increase of 39 million, or 10%, from the fourth quarter of 2022.

Current wording

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. DAUs are broken out by geography because markets have different characteristics. We had 453 million DAUs on average in the fourth quarter of 2024, an increase of 39 million, or 9%, from the fourth quarter of 2023.

Previous wording

(1) Numbers may not foot due to rounding.

Current wording

(1)Numbers may not foot due to rounding.

Previous wording

(2) North America includes Mexico, the Caribbean, and Central America.

Current wording

(2)North America includes Mexico, the Caribbean, and Central America.

Previous wording

(3) Europe includes Russia and Turkey.

Current wording

(3)Europe includes Russia and Turkey.

Previous wording

In the year ended December 31, 2023, we recorded revenue of $4.6 billion compared to $4.6 billion for the year ended December 31, 2022. We monetize our business primarily through advertising. Our advertising products include Snap Ads and AR Ads.

Current wording

We recorded revenue of $5.4 billion for the year ended December 31, 2024, compared to revenue of $4.6 billion for the year ended December 31, 2023, an increase of 16% year-over-year. We monetize our business primarily through advertising. Our advertising products include Snap Ads and AR Ads.

Previous wording

We measure our business using ARPU because it helps us understand the rate at which we are monetizing our daily user base. ARPU was $3.29 in the fourth quarter of 2023, compared to $3.47 in the fourth quarter of 2022. For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on a determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This differs from the presentation of our revenue by geography in the notes to our consolidated financial statements, where revenue is based on the billing address of the advertising customer.

Current wording

We measure our business using ARPU because it helps us understand the rate at which we are monetizing our daily user base. ARPU was $3.44 in the fourth quarter of 2024, compared to $3.29 in the fourth quarter of 2023. For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on a determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This differs from the presentation of our revenue by geography in the notes to our consolidated financial statements, where revenue is based on the billing address of the advertising customer.

Previous wording

(1) North America includes Mexico, the Caribbean, and Central America.

Current wording

(1)North America includes Mexico, the Caribbean, and Central America.

Previous wording

(2) Europe includes Russia and Turkey. Effective March 2022, we halted advertising sales to Russian and Belarusian entities.

Current wording

(2)Europe includes Russia and Turkey. Effective March 2022, we halted advertising sales to Russian and Belarusian entities.

Previous wording

We generate substantially all of our revenue through the sale of our advertising products, which primarily include Snap Ads and AR Ads, referred to as advertising revenue. Snap Ads may be subject to revenue sharing arrangements between us and the content partner. We also generate revenue from subscriptions and sales of hardware products, net of allowances for returns.

Current wording

We generate substantially all of our revenue through the sale of our advertising products, which primarily include Snap Ads and AR Ads, referred to as advertising revenue. Snap Ads may be subject to revenue sharing arrangements between us and the content partner. We also generate revenue from subscriptions and sales of hardware products. Sales of hardware products are reported net of allowances for returns.

Previous wording

Cost of revenue consists of payments to third-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth costs, and payments for content, developer, and advertiser partner costs. In addition, cost of revenue includes third-party selling costs and personnel-related costs, including salaries, benefits, and stock-based compensation expenses. Cost of revenue also includes facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs.

Current wording

Cost of revenue includes payments for infrastructure, content and developer partner costs, and advertiser partner and other costs. Infrastructure costs primarily consist of payments to third-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth. Content and developer partner costs primarily consist of fees paid to our content creators and publisher partners who share content on our platform through revenue sharing arrangements. Under these arrangements, we pay a portion of the fees we receive from advertisers for Snap Ads that are displayed within partner content on Snapchat. Advertising partner and other costs primarily consist of payments to third-party partners for fulfillment services, credit card and other transaction processing fees, and other expenses directly related to providing our services. Cost of revenue includes personnel-related costs, including salaries, benefits, and stock-based compensation expense for our employees engaged in the delivery of our services. Cost of revenue also includes facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs.

Previous wording

Research and development expenses consist primarily of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our engineers, designers, and other employees engaged in the research and development of our products. In addition, research and development expenses include facilities and other supporting overhead costs, including depreciation and amortization. Research and development costs are expensed as incurred.

Current wording

Research and development expenses primarily consist of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our engineers, designers, and other employees engaged in the research and development of our products. Research and development expenses also include facilities and other supporting overhead costs, including depreciation and amortization. Research and development costs are expensed as incurred.

Previous wording

Sales and marketing expenses consist primarily of personnel-related costs, including salaries, benefits, commissions, and stock-based compensation expense for our employees engaged in sales and sales support, business development, media, marketing, corporate partnerships, and customer service functions. Sales and marketing expenses also include costs incurred for advertising, market research, tradeshows, branding, marketing, promotional expense, and public relations, as well as facilities and other supporting overhead costs, including depreciation and amortization.

Current wording

Sales and marketing expenses primarily consist of personnel-related costs, including salaries, benefits, commissions, and stock-based compensation expense for our employees engaged in sales and sales support, business development, media, marketing, corporate partnerships, and customer service functions. Sales and marketing expenses also include costs incurred for advertising, market research, tradeshows, branding, marketing, promotional expense, and public relations, as well as facilities and other supporting overhead costs, including depreciation and amortization.

Previous wording

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our finance, legal, information technology, human resources, and other administrative teams. General and administrative expenses also include facilities and supporting overhead costs, including depreciation and amortization, and external professional services.

Current wording

General and administrative expenses primarily consist of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our finance, legal, information technology, human resources, and other administrative teams. General and administrative expenses also include facilities and supporting overhead costs, including depreciation and amortization, and external professional services.

Previous wording

Interest income consists primarily of interest earned on our cash, cash equivalents, and marketable securities.

Current wording

Interest income primarily consists of interest earned on our cash, cash equivalents, and marketable securities.

Previous wording

Interest expense consists primarily of interest expense associated with convertible notes and commitment fees related to our revolving credit facility.

Current wording

Interest expense primarily consists of interest expense associated with convertible notes and commitment fees related to our revolving credit facility.

Previous wording

We are subject to income taxes in the United States and numerous foreign jurisdictions. These foreign jurisdictions have different statutory tax rates than the United States. Additionally, certain of our foreign earnings may also be taxable in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to domestic income, use of tax credits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.

Current wording

We are subject to income taxes in the United States and numerous foreign jurisdictions. Our effective tax rates will vary depending on changes in the valuation of our deferred tax assets and liabilities, the relative proportion of foreign to domestic income, use of tax credits, and changes in tax laws.

Previous wording

Cost of revenue for the year ended December 31, 2023 increased $298.8 million compared to the same period in 2022. The increase was primarily driven by increased infrastructure costs attributable to DAU growth and investments in machine learning and AI, partially offset by lower content and advertising partner costs and $20.6 million relating to restructuring charges in the prior period.

Current wording

Cost of revenue for the year ended December 31, 2024 increased $360.1 million compared to the same period in 2023. The increase was primarily driven by a $269.1 million increase in infrastructure costs, attributable to DAU growth of

Previous wording

Research and development expenses for the year ended December 31, 2023 decreased $198.9 million compared to the same period in 2022. The decrease was primarily driven by lower cash- and stock-based compensation expenses due to decreased headcount compared to the prior period and $78.9 million relating to restructuring charges in the prior period.

Current wording

Research and development expenses for the year ended December 31, 2024 decreased $219.2 million compared to the same period in 2023. The decrease was primarily driven by lower employee compensation, which included a $209.2 million decrease in stock-based compensation expenses. The lower employee compensation was due to a decrease in research and development headcount compared to the prior year as well as the diminished impact of refresh equity grants relative to the prior year. The decrease was partially offset by $38.8 million in restructuring charges related to the 2024 restructuring.

Previous wording

Interest expense for the year ended December 31, 2023 increased $0.6 million compared to the same period in 2022. Interest expense for all periods consists primarily of amortization of debt issuance costs and contractual interest expense.

Current wording

Interest expense for the year ended December 31, 2024 decreased $0.5 million compared to the same period in 2023. Interest expense for all periods primarily consists of amortization of debt issuance costs and contractual interest expense.

Previous wording

Other expense, net for the year ended December 31, 2023 was $42.4 million, compared to other expense, net of $42.5 million for the same period in 2022. Other expense, net for the current year was primarily a resultof $28.4 million in unrealized losses on strategic investments and $6.7 million in total losses on publicly traded securities classified as marketable securities. Other expense, net in the comparable period in 2022 was primarily a result of $101.3 million in total losses on publicly traded securities primarily classified as marketable securities, offset by $19.9 million in unrealized gains and $45.9 million in realized gains on strategic investments.

Current wording

Other expense, net for the year ended December 31, 2024 was $16.8 million, compared to other expense, net of $42.4 million for the same period in 2023. Other expense, net for the current year was primarily the resultof $7.4 million in net losses on strategic investments and a$6.7 million net loss on extinguishment associated with the Note Repurchases, which is discussed within Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Other expense, net in the prior year was primarily the result of$27.1 million in net losses on strategic investments and$6.7 million in net losses on publicly traded securities classified as marketable securities.

Previous wording

Income tax expense was $28.1 million for the year ended December 31, 2023, compared to $29.0 million for the same period in 2022. Our effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on our deferred tax assets as it is more likely than not that some or all of our deferred tax assets will not be realized.

Current wording

Income tax expense was $25.6 million for the year ended December 31, 2024, compared to $28.1 million for the same period in 2023. Our effective tax rate differs from the U.S. statutory tax rate primarily due to valuation allowances on our deferred tax assets as it is more likely than not that some or all of our deferred tax assets will not be realized.

Previous wording

Net loss for the year ended December 31, 2023 was $1,322.5 million, compared to $1,429.7 million for the same period in 2022. Adjusted EBITDA for the year ended December 31, 2023 was $161.6 million, compared to $377.6 million for the same period in 2022. The decrease in Adjusted EBITDA was attributable to increased cost of revenue and sales and marketing expenses, partially offset by decreased research and development and general and administrative expenses.

Current wording

Adjusted EBITDA for the year ended December 31, 2024 was $508.6 million, compared to $161.6 million for the same period in 2023. The increase in Adjusted EBITDA was attributable to increased revenue, lower research and development expenses, and lower sales and marketing expenses, partially offset by higher cost of revenue and general and administrative expenses.

Previous wording

Cash, cash equivalents, and marketable securities were $3.5 billion as of December 31, 2023, primarily consisting of cash on deposit with banks and highly liquid investments in U.S. government and agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper. Our primary source of liquidity is cash generated through financing activities. Our primary uses of cash include operating costs such as personnel-related costs and the infrastructure costs of the Snapchat application, facility-related capital spending, and acquisitions and investments. There are no known material subsequent events that could have a material impact on our cash or liquidity. We may contemplate and engage in merger and acquisition activity that could materially impact our liquidity and capital resource position.

Current wording

Cash, cash equivalents, and marketable securities were $3.4 billion as of December 31, 2024, primarily consisting of cash on deposit with banks and highly liquid investments in U.S. government and agency securities, money market funds, corporate debt securities, certificates of deposit, commercial paper, and publicly traded equity securities. Our primary source of liquidity is cash generated through financing activities. Our primary uses of cash include operating costs such as personnel-related costs and the infrastructure costs of the Snapchat application, facility-related capital spending, and acquisitions and investments. There are no known material subsequent events that could have a material impact on our cash or liquidity. We may contemplate and engage in merger and acquisition activity that could materially impact our liquidity and capital resource position.

Previous wording

As of December 31, 2023, approximately 3% of our cash, cash equivalents, and marketable securities was held outside the United States. These amounts were primarily held in the United Kingdom and are utilized to fund our foreign operations. Cash held outside the United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations. However, repatriation of funds may result in additional tax liabilities. We believe our existing cash balance in the United States is sufficient to fund our working capital needs.

Current wording

As of December 31, 2024, approximately 3% of our cash, cash equivalents, and marketable securities was held outside the United States. These amounts were primarily held in Canada and the United Kingdom and are utilized to fund our international operations. Cash held outside the United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations. However, repatriation of funds may result in additional tax liabilities. We believe our existing cash balance in the United States is sufficient to fund our working capital needs.

Previous wording

In May 2022, we entered into a five-year senior unsecured revolving credit facility, or Credit Facility, with certain lenders that allows us to borrow up to $1.05 billion to fund working capital and general corporate-purpose expenditures. Loans bear interest, at our option, at a rate equal to (i) a term secured overnight financing rate, or SOFR, plus 0.75% or the base rate, if selected by us, for loans made in U.S. dollars, (ii) the Sterling overnight index average plus 0.7826% for loans made in Sterling, or (iii) foreign indices as stated in the credit agreement plus 0.75% for loans made in other permitted foreign currencies. The base rate is defined as the greatest of (i) the Wall Street Journal prime rate, (ii) the greater of the (a) federal funds rate and (b) the overnight bank funding rate, plus 0.50%, and (iii) the applicable SOFR for a period of one month (but not less than zero) plus 1.00. The Credit Facility also contains an annual commitment fee of 0.10% on the daily undrawn balance of the facility. As of December 31, 2023, we had $49.6 million in the form of outstanding standby letters of credit, with no amounts outstanding under the Credit Facility.

Current wording

In May 2022, we entered into a five-year senior unsecured revolving credit facility, or Credit Facility, with certain lenders that allows us to borrow up to $1.05 billion to fund working capital and general corporate-purpose expenditures. Loans bear interest, at our option, at a rate equal to (i) a term secured overnight financing rate, or SOFR, plus 0.75% or the base rate, if selected by us, for loans made in U.S. dollars, (ii) the Sterling overnight index average plus 0.7826% for loans made in Sterling, or (iii) foreign indices as stated in the credit agreement plus 0.75% for loans made in other permitted foreign currencies. The base rate is defined as the greatest of (i) the Wall Street Journal prime rate, (ii) the greater of the (a) federal funds rate and (b) the overnight bank funding rate, plus 0.50%, and (iii) the applicable SOFR for a period of one month (but not less than zero) plus 1.00. The Credit Facility also contains an annual commitment fee of 0.10% on the daily undrawn balance of the facility. As of December 31, 2024, we had $80.7 million in the form of outstanding standby letters of credit, with no amounts outstanding under the Credit Facility.

Previous wording

In February 2022, we entered into a purchase agreement for the sale of an aggregate of $1.5 billion principal amount of convertible senior notes due in 2028. The net proceeds from the issuance of the 2028 Notes were $1.31 billion, net of debt issuance costs and the 2028 Capped Call Transactions discussed further in Note 7. The 2028 Notes mature on March 1, 2028 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2023 and as a result, the 2028 Notes will not be eligible for optional conversion during the first quarter of 2024.

Current wording

In February 2022, we entered into a purchase agreement for the sale of an aggregate of $1.50 billion principal amount of convertible senior notes due in 2028. The net proceeds from the issuance of the 2028 Notes were $1.31 billion, net of debt issuance costs and the 2028 Capped Call Transactions discussed further in Note 7 in our consolidated financial statements. The 2028 Notes mature on March 1, 2028 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2024 and as a result, the 2028 Notes will not be eligible for optional conversion during the first quarter of 2025. As of December 31, 2024, the outstanding principal of the 2028 Notes was $1.50 billion.

Previous wording

In April 2021, we entered into a purchase agreement for the sale of an aggregate of $1.15 billion principal amount of convertible senior notes due in 2027. The net proceeds from the issuance of the 2027 Notes were $1.05 billion, net of debt issuance costs and the 2027 Capped Call Transactions discussed further in Note 7. The 2027 Notes mature on May 1, 2027 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2023 and as a result, the 2027 Notes will not be eligible for optional conversion during the first quarter of 2024.

Current wording

In April 2021, we entered into a purchase agreement for the sale of an aggregate of $1.15 billion principal amount of convertible senior notes due in 2027. The net proceeds from the issuance of the 2027 Notes were $1.05 billion, net of debt issuance costs and the 2027 Capped Call Transactions discussed further in Note 7 in our consolidated financial statements. The 2027 Notes mature on May 1, 2027 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2024 and as a result, the 2027 Notes will not be eligible for optional conversion during the first quarter of 2025. As of December 31, 2024, the outstanding principal of the 2027 Notes was $1.15 billion.

Previous wording

In April 2020, we entered into a purchase agreement for the sale of an aggregate of $1.0 billion principal amount of convertible senior notes due in 2025, of which $284.1 million remains outstanding as of December 31, 2023. The net proceeds from the issuance of the 2025 Notes were $888.6 million, net of debt issuance costs and the 2025 Capped Call Transactions discussed further in Note 7. The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2023 and as a result, the 2025 Notes will not be eligible for optional conversion during the first quarter of 2024.

Current wording

In April 2020, we entered into a purchase agreement for the sale of an aggregate of $1.0 billion principal amount of convertible senior notes due in 2025. The net proceeds from the issuance of the 2025 Notes were $888.6 million, net of debt issuance costs and the 2025 Capped Call Transactions discussed further in Note 7 in our consolidated financial statements. The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2024 and as a result, the 2025 Notes will not be eligible for optional conversion until February 1, 2025. On or after February 1, 2025, the 2025 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The 2025 Notes are convertible at a conversion rate of 46.1233 shares of Class A common stock per $1,000 principal amount of 2025 Notes, which is equivalent to a conversion price of approximately $21.68 per share of our Class A common stock. As of December 31, 2024, the outstanding principal of the 2025 Notes was $36.2 million.