Snap Inc

Previous wording

•Daily Active Users, or DAUs, increased 9% year-over-year to 443 million.

Current wording

•Daily Active Users, or DAUs, increased 9% year-over-year to 460 million.

Previous wording

•Average revenue per user, or ARPU, was $3.10, compared to $2.93 in the prior year.

Current wording

•Average revenue per user, or ARPU, was $2.96, compared to $2.83 in the prior year.

Previous wording

•Revenue was $1,372.6 million, compared to $1,188.6 million in the prior year, an increase of 15% year-over-year.

Current wording

•Revenue was $1,363.2 million, compared to $1,194.8 million in the prior year, an increase of 14% year-over-year.

Previous wording

•Total costs and expenses were $1,545.8 million, compared to $1,568.6 million in the prior year.

Current wording

•Total costs and expenses were $1,557.1 million, compared to $1,528.0 million in the prior year.

Previous wording

•Diluted net loss per share was$(0.09), compared to$(0.23) in the prior year.

Current wording

•Diluted net loss per share was$(0.08), compared to$(0.19) in the prior year.

Previous wording

•Cash provided by operating activities was $115.9 million, compared to $12.8 million in the prior year.

Current wording

•Cash provided by operating activities was $151.6 million, compared to $88.4 million in the prior year.

Previous wording

We periodically make changes to our business and priorities. In 2022, 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.

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 and retaliatory countermeasures, 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 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 443 million DAUs on average in the third quarter of 2024, an increase of 37 million, or 9%, from the third quarter of 2023.

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 460 million DAUs on average in the first quarter of 2025, an increase of 38 million, or 9%, from the first quarter of 2024.

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

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

Previous wording

(3) Europe includes Russia and Turkey.

Current wording

(4)Europe includes Russia and Turkey.

Previous wording

We recorded revenue of $1,372.6 million for the three months ended September 30, 2024, compared to revenue of $1,188.6 million for the same period in 2023, an increase of 15% year-over-year. We monetize our business primarily through advertising. Our advertising products include Snap Ads and AR Ads.

Current wording

We recorded revenue of $1,363.2 million for the three months ended March 31, 2025, compared to revenue of $1,194.8 million for the same period in 2024, an increase of 14% 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 $3.10 in the third quarter of 2024, compared to $2.93 in the third 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.

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 $2.96 in the first quarter of 2025, compared to $2.83 in the first quarter of 2024. 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

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.

Current wording

We generate the majority of our revenue through the sale of our advertising products on Snapchat, which 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 Snapchat+, our subscription product that provides subscribers access to exclusive, experimental, and pre-release features, and 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, 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 our Notes and commitment fees related to our revolving credit facility.

Previous wording

Other income (expense), net primarily consists of gains and losses on strategic investments, marketable securities, and foreign currency transactions.

Current wording

Other income (expense), net primarily consists of gains and losses on debt extinguishments, and gains and losses on strategic investments, marketable securities, and foreign currency transactions.

Previous wording

Three and Nine Months Ended September 30, 2024 and 2023

Current wording

Three Months Ended March 31, 2025 and 2024

Previous wording

Cost of revenue for the three and nine months ended September 30, 2024 increased $83.2 million and $310.0 million compared to the same periods in 2023. The increase in both periods was primarily driven by increased infrastructure costs attributable to DAU growth and investments in machine learning and AI, partially offset by improvements to our cloud infrastructure unit costs resulting from engineering efficiencies and pricing improvements.

Current wording

Cost of revenue for the three months ended March 31, 2025 increased $64.8 million compared to the same period in 2024. The increase was primarily driven by a $39.1 million increase in infrastructure costs, attributable to DAU growth of 9% compared to the prior year as well as investments in machine learning and AI.

Previous wording

Interest income for the three and nine months ended September 30, 2024 decreased $5.3 million and $10.0 million compared to the same periods in 2023. The decrease in both periods was primarily driven by lower overall invested cash balances.

Current wording

Interest income for the three months ended March 31, 2025 decreased $2.9 million compared to the same period in 2024. The decrease was primarily driven by lower interest rates.

Previous wording

Other expense, net for the nine months ended September 30, 2024 was primarily the result of $7.1 million in net losses on strategic investments, a $6.7 million net loss on extinguishment associated with the Note Repurchases, and $5.2 million in unrealized losses on publicly traded securities classified as marketable securities. Other expense, net for the nine months ended September 30, 2023 was primarily a result of $5.9 million in total losses on publicly traded securities classified as marketable securities.

Current wording

Other income, net for the three months ended March 31, 2025 was primarily driven by a $66.9 million gain on extinguishment associated with the 2025 Note Repurchases, which is discussed within Note 6 to our consolidated financial statements included elsewhere in this Quarterly Report, partially offset by $11.6 million in net losses on strategic investments and $4.2 million in unrealized losses on publicly traded securities classified as marketable securities.

Previous wording

Income tax expense for the three and nine months ended September 30, 2024 was $8.3 million and $20.5 million, respectively, compared to an income tax expense of $5.8 million and $24.8 million for the same periods 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.

Current wording

Income tax expense for the three months ended March 31, 2025 was $8.4 million, compared to an income tax expense of $6.9 million for the same period in 2024. 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 three and nine months ended September 30, 2024 was $153.2 million and $707.0 million, respectively, compared to $368.3 million and $1,074.2 million for the same periods in 2023. The decrease in net loss for both periods was primarily the result of the changes in revenues and expenses discussed above.

Current wording

Net loss for the three months ended March 31, 2025 was $139.6 million, compared to $305.1 million for the same period in 2024. The decrease in net loss was primarily the result of the changes in revenues and expenses discussed above.

Previous wording

Adjusted EBITDA for the three and nine months ended September 30, 2024 was $132.0 million and $232.6 million, respectively, compared to $40.1 million and $2.4 million for the same periods in 2023. The increase for both periods was primarily 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.

Current wording

Adjusted EBITDA for the three months ended March 31, 2025 was $108.4 million, compared to $45.7 million for the same period in 2024. The increase was primarily 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

As of September 30, 2024, approximately 3.8% 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 March 31, 2025, approximately 6.7% of our cash, cash equivalents, and marketable securities was held by our foreign subsidiaries, primarily in the United Kingdom. Cash held by our foreign subsidiaries is utilized to fund our foreign operations and may be repatriated, subject to certain limitations. Upon repatriation, these funds would be available to fund our domestic operations, but repatriation may result in additional tax liabilities. We maintain substantially all of our cash, cash equivalents, and marketable securities in accounts with major United States and multi-national financial institutions. We believe our existing cash balance is sufficient to fund our working capital needs.

Previous wording

We have non-cancelable contractual agreements primarily related to the hosting of our data processing, storage, and other computing services, as well as lease, content and developer partner, and other commitments. We had $5.4 billion in commitments, as of September 30, 2024, primarily due within three years. For additional discussion on our leases, see Note 9 to our consolidated financial statements.

Current wording

We have non-cancelable contractual agreements primarily related to the hosting of our data processing, storage, and other computing services, as well as lease, content and developer partner, and other commitments. We had $4.6 billion in commitments, as of March 31, 2025, primarily due within three years. For additional discussion on our leases, see Note 8 to our consolidated financial statements.

Previous wording

In October 2023, our board of directors authorized a stock repurchase program of up to $500.0 million of our Class A common stock. We completed this program in April 2024. For the nine months ended September 30, 2024, we repurchased and retired 27.9 million shares of our Class A common stock for an aggregate of $311.1 million, including costs associated with the repurchases.

Current wording

In October 2024, our board of directors authorized a stock repurchase program of up to $500.0 million of our Class A common stock. For the three months ended March 31, 2025, we repurchased and retired 27.3 million shares of our Class A common stock for $257.1 million, including costs associated with the repurchases. As of March 31, 2025, the remaining availability under the stock repurchase authorization was $243.2 million.

Previous wording

The following table sets forth the major components of our consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023:

Current wording

The following table sets forth the major components of our consolidated statements of cash flows for the three months ended March 31, 2025 and 2024:

Previous wording

Net cash provided by operating activities was $182.8 million for the nine months ended September 30, 2024, compared to $81.9 million for the same period in 2023, resulting primarily from our net loss, adjusted for non-cash items, including stock-based compensation expense of $783.3 million and depreciation and amortization expense of $118.5 million. Net cash provided by operating activities for the nine months ended September 30, 2024 was also driven by a $73.3 million decrease in accounts receivable due to higher collections and a reduction in billings in the period, partially offset by a $112.3 million decrease in accounts payable, primarily due to the timing of payments.

Current wording

Net cash provided by operating activities was $151.6 million for the three months ended March 31, 2025, compared to $88.4 million for the same period in 2024, resulting primarily from our net loss, adjusted for non-cash items, including stock-based compensation expense of $247.3 million, a gain on debt extinguishment of $66.9 million, and depreciation and amortization expense of $37.7 million. Net cash provided by operating activities for the three months ended March 31, 2025 was also driven by a $194.2 million decrease in accounts receivable due to higher collections and a reduction in billings in the period, partially offset by a $162.6 million decrease in accrued expenses and other current liabilities primarily due to the timing of payments.

Previous wording

Net cash used in investing activities was $568.3 million for the nine months ended September 30, 2024, compared to net cash used in investing activities of $52.2 million for the same period in 2023. Our investing activities for the nine months ended September 30, 2024 primarily consisted of purchases of marketable securities of $1.9 billion and purchases of property and equipment of $146.6 million, partially offset by maturities of marketable securities of $1.2 billion and sales of marketable securities of $354.3 million. Our investing activities for the nine months ended September 30, 2023 primarily consisted of purchases of marketable securities of $2.0 billion, purchases of property and equipment of $158.0 million, and cash paid for acquisitions, net of cash acquired of $50.3 million, partially offset by maturities of marketable securities of $2.1 billion and sales of marketable securities of $107.7 million

Current wording

Net cash provided by investing activities was $2.8 million for the three months ended March 31, 2025, compared to net cash used in investing activities of $131.2 million for the same period in 2024. Our investing activities for the three months ended March 31, 2025 primarily consisted of maturities of marketable securities of $263.8 million and sales of marketable securities of $12.0 million, partially offset by purchases of marketable securities of $235.8 million and purchases of property and equipment of $37.2 million. Our investing activities for the three months ended March 31, 2024 primarily consisted of purchases of marketable securities of $465.7 million and purchases of property and equipment of $50.4 million, partially offset by maturities of marketable securities of $384.9 million.

Previous wording

Net cash used in financing activities was $428.6 million for the nine months ended September 30, 2024, compared to net cash used in financing activities of $254.1 million for the same period in 2023. Our financing activities for the nine months ended September 30, 2024 primarily consisted of the Note Repurchases for$859.0 million, repurchases of our Class A common stock for $311.1 million, and the purchase of the 2030 Capped Call Transactions for$68.9 million, partially offset by the issuance of the 2030 Notes for net proceeds of$740.4 million and the termination of the 2025 Capped Call Transactions for proceeds of$62.7 million. Our financing activities for the nine months ended September 30, 2023 primarily consisted of $254.6 million of deferred payments for acquisitions completed in prior periods.

Current wording

Net cash used in financing activities was $288.5 million for the three months ended March 31, 2025, compared to net cash used in financing activities of $675.8 million for the same period in 2024. Our financing activities for the three months ended March 31, 2025 primarily consisted of the 2025 Note Repurchases for $1.4 billion, repurchases of our Class A common stock for $257.1 million, and deferred payments for acquisitions of $58.0 million, partially offset by the issuance of the 2033 Notes for net proceeds of $1.5 billion. Our financing activities for the three months ended March 31,

Previous wording

Free Cash Flow was $36.3 million for the nine months ended September 30, 2024, compared to $(76.1) million for the same period in 2023. Free Cash Flow in all periods was composed of net cash provided by (used in) operating activities, resulting primarily from net loss, adjusted for non-cash items and changes in working capital. Free Cash Flow also included purchases of property and equipment of $146.6 million for the nine months ended September 30, 2024, compared to $158.0 million for the same period in 2023. Purchases of property and equipment in all periods are primarily related to improvements to our leased facilities to support our team workspaces. See “Non-GAAP Financial Measures.”

Current wording

Free Cash Flow was $114.4 million for the three months ended March 31, 2025, compared to $37.9 million for the same period in 2024. Free Cash Flow in all periods was composed of net cash provided by (used in) operating activities, resulting primarily from net loss, adjusted for non-cash items and changes in working capital. Free Cash Flow also included purchases of property and equipment of $37.2 million for the three months ended March 31, 2025, compared to $50.4 million for the same period in 2024. Purchases of property and equipment in all periods are primarily related to improvements to our leased facilities to support our team workspaces. See “Non-GAAP Financial Measures.”

Previous wording

(1)Restructuring charges during 2024 are primarily related to cash severance, stock-based compensation expense, and other charges associated with the 2024 restructuring. Restructuring charges during 2023 are primarily related to cash severance and stock-based compensation expense associated with the wind down of our AR Enterprise business. These charges are not reflective of underlying trends in our business. Refer to Note 15 in our consolidated financial statements.

Current wording

(1)Restructuring charges during 2024 primarily include $68.2 million of cash severance, stock-based compensation expense, and other charges associated with the 2024 restructuring. These charges are not reflective of underlying trends in our business. Refer to Note 13 in our consolidated financial statements.

Previous wording

The critical accounting estimates, assumptions, and judgments that we believe to have the most significant impact on our consolidated financial statements are revenue recognition, stock-based compensation, business combinations and valuation of goodwill and other acquired intangible assets, loss contingencies, and income taxes.

Current wording

The critical accounting estimates, assumptions, and judgments that we believe to have the most significant impact on our consolidated financial statements are revenue recognition, valuation of assets, loss contingencies, and income taxes.