Daily Active Users increased 18% year-over-year to 347 million
Revenue increased 13% year-over-year to $1,111 million
Operating cash flow was $(124) million and Free Cash Flow was $(147) million
SANTA MONICA, Calif.–(BUSINESS WIRE)–Snap Inc. (NYSE: SNAP) today announced financial results for the quarter ended June 30, 2022.
“While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect our ambition,” said Evan Spiegel, CEO. “We are evolving our business and strategy to reaccelerate revenue growth, including innovating on our products, investing heavily in our direct response advertising business, and cultivating new sources of revenue to help diversify our topline growth.”
Snap Inc. also announced today its Board of Directors has authorized a stock repurchase program of up to $500 million of its Class A common stock. Repurchases of the Class A common stock may be made on a discretionary basis from time to time, either through open market transactions (including through Rule 10b5-1 trading plans) or through privately negotiated transactions in accordance with applicable securities laws. The timing and actual number of shares repurchased will depend on a variety of factors, including stock price, trading volume, market and economic conditions, and other general business considerations. Repurchases under the program have been authorized for the next 12 months but the program may be modified, suspended, or terminated at any time.
The goal of the program is to utilize the company’s strong balance sheet to offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.
Repurchases under this program will be funded from existing cash and cash equivalents. As of June 30, 2022, Snap had $4.9 billion in cash and cash equivalents, restricted cash, and marketable securities.
Q2 2022 Financial Summary
|
|
Three Months Ended June 30, |
|
|
Percent |
|
|
Six Months Ended June 30, |
|
|
Percent |
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|
2022 |
|
|
2021 |
|
|
Change |
|
||||||
|
(Unaudited) |
(in thousands, except per share amounts) |
|
|
|
|
|
|||||||||||||||||
|
Revenue |
$ |
1,110,909 |
|
|
$ |
982,108 |
|
|
|
13 |
% |
|
$ |
2,173,636 |
|
|
$ |
1,751,692 |
|
|
|
24 |
% |
|
Operating loss |
$ |
(400,940 |
) |
|
$ |
(192,512 |
) |
|
|
(108 |
)% |
|
$ |
(672,467 |
) |
|
$ |
(496,118 |
) |
|
|
(36 |
)% |
|
Net loss |
$ |
(422,067 |
) |
|
$ |
(151,664 |
) |
|
|
(178 |
)% |
|
$ |
(781,691 |
) |
|
$ |
(438,546 |
) |
|
|
(78 |
)% |
|
Adjusted EBITDA(1) |
$ |
7,190 |
|
|
$ |
117,403 |
|
|
|
(94 |
)% |
|
$ |
71,658 |
|
|
$ |
115,694 |
|
|
|
(38 |
)% |
|
Net cash provided by (used in) operating activities |
$ |
(124,081 |
) |
|
$ |
(101,086 |
) |
|
|
(23 |
)% |
|
$ |
3,378 |
|
|
$ |
35,800 |
|
|
|
(91 |
)% |
|
Free Cash Flow(2) |
$ |
(147,451 |
) |
|
$ |
(115,709 |
) |
|
|
(27 |
)% |
|
$ |
(41,167 |
) |
|
$ |
10,326 |
|
|
|
(499 |
)% |
|
Diluted net loss per share attributable to common stockholders |
$ |
(0.26 |
) |
|
$ |
(0.10 |
) |
|
|
(164 |
)% |
|
$ |
(0.48 |
) |
|
$ |
(0.29 |
) |
|
|
(67 |
)% |
|
Non-GAAP diluted net (loss) income per share(3) |
$ |
(0.02 |
) |
|
$ |
0.10 |
|
|
|
(118 |
)% |
|
$ |
(0.04 |
) |
|
$ |
0.10 |
|
|
|
(144 |
)% |
|
Common shares outstanding plus shares underlying stock-based awards |
|
1,737,079 |
|
|
|
1,681,260 |
|
|
|
3 |
% |
|
|
1,737,079 |
|
|
|
1,681,260 |
|
|
|
3 |
% |
|
(1) |
See page 11 for reconciliation of net loss to Adjusted EBITDA. |
|
|
(2) |
See page 11 for reconciliation of net cash provided by operating activities to Free Cash Flow. |
|
|
(3) |
See page 12 for reconciliation of diluted net (loss) income per share to non-GAAP diluted net (loss) income per share.
|
Q2 2022 Summary & Key Highlights
The Snapchat community is active, engaged, and growing:
We invested in our augmented reality platform:
We grew our content offerings:
We expanded our product and partner ecosystem:
We expanded our offering for advertisers:
Financial Guidance
Given uncertainties related to the operating environment, we are not providing our expectations for revenue or adjusted EBITDA for the third quarter of 2022.
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, our stock repurchase program, future stock dividends, 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, geo-political conflicts, and the 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 ability to attain and sustain 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, health epidemics, macroeconomic conditions, and war or other armed conflict, as well as risks, uncertainties, and other factors described in “Risk Factors” and elsewhere in our most recent periodic report filed with the U.S. Securities and Exchange Commission, or 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 geo-political conflicts, the COVID-19 pandemic, and macroeconomic conditions, 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 June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(422,067 |
) |
|
$ |
(151,664 |
) |
|
$ |
(781,691 |
) |
|
$ |
(438,546 |
) |
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
79,291 |
|
|
|
28,270 |
|
|
|
117,391 |
|
|
|
51,768 |
|
|
Stock-based compensation |
|
318,810 |
|
|
|
256,600 |
|
|
|
594,254 |
|
|
|
493,673 |
|
|
Amortization of debt issuance costs |
|
1,780 |
|
|
|
1,148 |
|
|
|
3,193 |
|
|
|
2,192 |
|
|
Losses (gains) on debt and equity securities, net |
|
12,210 |
|
|
|
(79,940 |
) |
|
|
91,337 |
|
|
|
(102,451 |
) |
|
Other |
|
3,079 |
|
|
|
34,856 |
|
|
|
4,204 |
|
|
|
41,685 |
|
|
Change in operating assets and liabilities, net of effect of acquisitions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net of allowance |
|
(81,001 |
) |
|
|
(174,452 |
) |
|
|
45,026 |
|
|
|
(45,136 |
) |
|
Prepaid expenses and other current assets |
|
(11,980 |
) |
|
|
1,065 |
|
|
|
(39,158 |
) |
|
|
(11,371 |
) |
|
Operating lease right-of-use assets |
|
18,299 |
|
|
|
12,549 |
|
|
|
35,283 |
|
|
|
23,747 |
|
|
Other assets |
|
(7,230 |
) |
|
|
(338 |
) |
|
|
(7,538 |
) |
|
|
(1,236 |
) |
|
Accounts payable |
|
(3,919 |
) |
|
|
(50,159 |
) |
|
|
51,061 |
|
|
|
6,346 |
|
|
Accrued expenses and other current liabilities |
|
(14,392 |
) |
|
|
27,690 |
|
|
|
(77,220 |
) |
|
|
33,039 |
|
|
Operating lease liabilities |
|
(16,499 |
) |
|
|
(8,059 |
) |
|
|
(34,315 |
) |
|
|
(21,354 |
) |
|
Other liabilities |
|
(462 |
) |
|
|
1,348 |
|
|
|
1,551 |
|
|
|
3,444 |
|
|
Net cash provided by (used in) operating activities |
|
(124,081 |
) |
|
|
(101,086 |
) |
|
|
3,378 |
|
|
|
35,800 |
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(23,370 |
) |
|
|
(14,623 |
) |
|
|
(44,545 |
) |
|
|
(25,474 |
) |
|
Purchases of strategic investments |
|
(6,200 |
) |
|
|
(31,425 |
) |
|
|
(6,350 |
) |
|
|
(32,775 |
) |
|
Sales of strategic investments |
|
63,276 |
|
|
|
36,250 |
|
|
|
63,276 |
|
|
|
36,435 |
|
|
Cash paid for acquisitions, net of cash acquired |
|
(11,220 |
) |
|
|
(30,304 |
) |
|
|
(12,008 |
) |
|
|
(139,216 |
) |
|
Purchases of marketable securities |
|
(568,055 |
) |
|
|
(764,371 |
) |
|
|
(1,910,436 |
) |
|
|
(1,287,590 |
) |
|
Sales of marketable securities |
|
2,982 |
|
|
|
239,500 |
|
|
|
12,759 |
|
|
|
347,556 |
|
|
Maturities of marketable securities |
|
554,026 |
|
|
|
696,892 |
|
|
|
896,571 |
|
|
|
1,513,823 |
|
|
Other |
|
— |
|
|
|
(50 |
) |
|
|
(5,493 |
) |
|
|
(335 |
) |
|
Net cash provided by (used in) investing activities |
|
11,439 |
|
|
|
131,869 |
|
|
|
(1,006,226 |
) |
|
|
412,424 |
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of convertible notes, net of issuance costs |
|
— |
|
|
|
1,137,227 |
|
|
|
1,483,500 |
|
|
|
1,137,227 |
|
|
Purchase of capped calls |
|
— |
|
|
|
(86,825 |
) |
|
|
(177,000 |
) |
|
|
(86,825 |
) |
|
Proceeds from the exercise of stock options |
|
1,388 |
|
|
|
3,257 |
|
|
|
3,654 |
|
|
|
7,710 |
|
|
Payments of debt issuance costs |
|
(3,006 |
) |
|
|
— |
|
|
|
(3,006 |
) |
|
|
— |
|
|
Net cash provided by (used in) financing activities |
|
(1,618 |
) |
|
|
1,053,659 |
|
|
|
1,307,148 |
|
|
|
1,058,112 |
|
|
Change in cash, cash equivalents, and restricted cash |
|
(114,260 |
) |
|
|
1,084,442 |
|
|
|
304,300 |
|
|
|
1,506,336 |
|
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
2,413,283 |
|
|
|
968,437 |
|
|
|
1,994,723 |
|
|
|
546,543 |
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
2,299,023 |
|
|
$ |
2,052,879 |
|
|
$ |
2,299,023 |
|
|
$ |
2,052,879 |
|
|
Supplemental disclosures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes, net |
$ |
4,848 |
|
|
$ |
3,280 |
|
|
$ |
7,484 |
|
|
$ |
14,288 |
|
|
Cash paid for interest |
$ |
551 |
|
|
$ |
1,614 |
|
|
$ |
4,005 |
|
|
$ |
6,741 |
|
|
SNAP INC. |
|||||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||||||||||
|
(in thousands, except per share amounts, unaudited) |
|||||||||||||||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
|
Revenue |
$ |
1,110,909 |
|
|
$ |
982,108 |
|
|
$ |
2,173,636 |
|
|
$ |
1,751,692 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
446,377 |
|
|
|
445,021 |
|
|
|
867,274 |
|
|
|
857,622 |
|
|
Research and development |
|
505,037 |
|
|
|
370,671 |
|
|
|
960,600 |
|
|
|
719,251 |
|
|
Sales and marketing |
|
311,374 |
|
|
|
179,724 |
|
|
|
553,260 |
|
|
|
330,010 |
|
|
General and administrative |
|
249,061 |
|
|
|
179,204 |
|
|
|
464,969 |
|
|
|
340,927 |
|
|
Total costs and expenses |
|
1,511,849 |
|
|
|
1,174,620 |
|
|
|
2,846,103 |
|
|
|
2,247,810 |
|
|
Operating loss |
|
(400,940 |
) |
|
|
(192,512 |
) |
|
|
(672,467 |
) |
|
|
(496,118 |
) |
|
Interest income |
|
8,331 |
|
|
|
1,251 |
|
|
|
11,454 |
|
|
|
2,388 |
|
|
Interest expense |
|
(5,549 |
) |
|
|
(4,564 |
) |
|
|
(10,722 |
) |
|
|
(9,595 |
) |
|
Other income (expense), net |
|
(16,910 |
) |
|
|
42,282 |
|
|
|
(94,447 |
) |
|
|
64,340 |
|
|
Loss before income taxes |
|
(415,068 |
) |
|
|
(153,543 |
) |
|
|
(766,182 |
) |
|
|
(438,985 |
) |
|
Income tax benefit (expense) |
|
(6,999 |
) |
|
|
1,879 |
|
|
|
(15,509 |
) |
|
|
439 |
|
|
Net loss |
$ |
(422,067 |
) |
|
$ |
(151,664 |
) |
|
$ |
(781,691 |
) |
|
$ |
(438,546 |
) |
|
Net loss per share attributable to Class A, Class B, and Class C common stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.26 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.48 |
) |
|
$ |
(0.29 |
) |
|
Diluted |
$ |
(0.26 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.48 |
) |
|
$ |
(0.29 |
) |
|
Weighted average shares used in computation of net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
1,632,140 |
|
|
|
1,547,234 |
|
|
|
1,625,663 |
|
|
|
1,524,560 |
|
|
Diluted |
|
1,632,140 |
|
|
|
1,547,234 |
|
|
|
1,625,663 |
|
|
|
1,524,560 |
|
Contacts
Investors and Analysts:
ir@snap.com
Press:
press@snap.com
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