Snap : First Quarter 2024 Earnings Slides

Q1 2024 Earnings Slides

April 25, 2024

Forward-Looking Statements & Non-GAAP Financial Measures

This presentation contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements regarding guidance, our future results of operations or financial condition, future stock repurchase programs or 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 presentation.

You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this presentation primarily on our current expectations and projections about future events and trends, including our financial outlook, macroeconomic uncertainty, and geo-political conflicts, that we believe may continue to affect our business, financial condition, results of operations, and prospects. These forward-looking statements are subject to risks, uncertainties, and other factors, including those described in the sections titled "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 our periodic report that will be filed with the SEC for the period covered by this presentation and other filings that we make from time to time with the SEC.

In addition, any forward-looking statements in this presentation relate only to events as of the date on which the statements are made and are based on information available to us as of the date of this presentation. We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, including future developments related to geo-political conflicts and macroeconomic conditions, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, dispositions, joint ventures, restructurings, legal settlements or investments.

This presentation includes certain non-GAAP financial measures. 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. A reconciliation of GAAP to non-GAAP measures is provided in the Appendix of this presentation.

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First Quarter Financial Summary

1On a constant currency basis, the impact of foreign exchange rates on revenue was not material at less than 1% in Q1 2024. Constant currency revenue is a non-GAAP measure, see Appendix for further detail.

2Adjusted gross margin is a non-GAAP measure, which we define as GAAP revenue less adjusted cost of revenue divided by GAAP revenue. Adjusted cost of revenue is a non-GAAP measure and excludes stock-based compensation expense, payroll and other tax expense related to stock-based compensation, depreciation and amortization, and certain other items impacting net income (loss) from time to time.

3Adjusted EBITDA margin is a non-GAAP measure, which we define as Adjusted EBITDA divided by GAAP revenue. See Appendix for non-GAAP measures of Adjusted EBITDA and Free Cash Flow, including reconciliations of net loss to Adjusted EBITDA and net cash provided by (used in) operating activities to Free Cash Flow.

Quarterly information is unaudited.3 Numbers throughout presentation may not foot due to rounding.

REVENUE WAS $1,195 MILLION IN Q1 2024, AN INCREASE OF 21% YoY

Business Highlights

We grew and deepened our engagement with our community:

• DAUs were 422 million in Q1 2024, an increase of 39 million, or 10%, year-over-year.
• Total time spent watching Spotlight content increased more than 125% year-over-year.
• The growth in the Snap Star program has been an important driver of engagement in North America, with total time spent watching Stories from Snap Stars growing more than 55% year-over-year in North America.
• We onboarded over 1,500 Snap Stars in Q1, which has helped generate quarter-over-quarter growth in Story posts, Spotlight posts, and Stories time spent for Snap Stars globally.
• We introduced new tools to help our community make more creative Snaps, including new Creative Templates, the ability to post longer videos, and access to AI-powered AR Lens creation.

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Business Highlights (Continued)

We are focused on accelerating and diversifying our revenue growth:

• Snapchat+ subscribers more than tripled year-over-year, surpassing 9 million subscribers in Q1.
• The number of small and medium sized advertisers on Snapchat increased 85% year-over-year.
• Ongoing momentum with our 7-0 Pixel Purchase optimization model led to a more than 75% increase in purchase related conversions year-over-year.
• We launched a new and improved version of Conversions API (CAPI) available to all advertisers that offers easier set up with reduced integration times.
• We partnered with Snowflake to enable advertisers to easily implement our CAPI solutions without needing to build a bespoke back-end integration.
• Our improvements to CAPI and improved collaboration with advertisers has resulted in CAPI integrations growing approximately 300% year-over-year in Q1 2024.
• We launched Sponsored AR Filters, our new AR ad offering that expands advertisers' reach via the Snapchat Camera and enables Snapchatters to overlay sponsored AR content on their Snaps after a photo or video is captured.
• We announced partnerships with Traackr, Lumen Research, OMD, Amplified Intelligence, and Fospha to empower advertisers with more campaign tools and insights.
• We announced two new brand safety solutions for advertisers: a third-party measurement product in partnership with Integral Ad Science, a leading global media measurement and optimization platform, to provide advertisers with increased transparency across their Snapchat campaigns, and a first-party tool that allows advertisers greater control over where their ads appear.

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Business Highlights (Continued)

We invested in our augmented reality platform:

• We continue to invest in Generative AI models and automation for the creation of ML and AI Lenses, which contributed to the number of ML and AI Lenses viewed by Snapchatters increasing by more than 50% year-over-year.
• We invested in relationship-centered AR Formats that drove outsized sharing among US Snapchatters including "Friend Lenses" that feature friends in Quizzes and other experiences, and "Q&A Lenses" that prompt Snapchatters to send fun text and image responses to their Friends.
• We implemented an improved AR Carousel ranking model that refreshes AR lenses more frequently, making it easier to discover new Lenses, driving a more than 50% increase in the number of new Lenses seen in the carousel by Snapchatters since launch.
• We integrated a new AI Assistant in Lens Studio that answers developer questions based on our documentation and tutorials to guide developers and help build Lenses more easily.
• We launched a new Compression tool in Lens Studio to easily reduce the size of assets and optimize Lenses in order to improve the Lens creation experience on Snapchat.
• We launched an Animation Curve Editor in Lens Studio, a new interface for developers to edit animations inside Lens Studio - the first of many foundational animation tools coming soon.
• At Super Bowl LVIII, the NFL integrated Snapchat's Camera Kit technology at Allegiant Stadium in Las Vegas - the first time a Super Bowl host stadium has integrated our technology.

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Average Daily Active Users (DAU)

(in millions, unaudited)

We define a Daily Active User, or 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 calculate average Daily Active Users 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.

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

2Europe includes Russia and Turkey.7 Numbers throughout presentation may not foot due to rounding.

GLOBAL DAU INCREASED 39 MILLION, OR 10%, YoY

REST OF WORLD DAU INCREASED 36 MILLION, OR 19%, YoY

Revenue by Geography

(in millions, unaudited)

Q1 2024 REVENUE INCREASED 21% YoY

REVENUE GROWTH ACCELERATED 16 PPT QoQ

Average Revenue Per User (ARPU)

(unaudited)

We define ARPU as quarterly revenue divided by the average Daily Active Users. For purposes of calculating ARPU, revenue by user geography 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.

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

2Europe includes Russia and Turkey. Effective March 2022, we halted advertising sales to Russian and Belarusian entities.9 Numbers throughout presentation may not foot due to rounding.

DOUBLE DIGIT PERCENTAGE GROWTH IN ARPU ACROSS ALL REGIONS

Adjusted Gross Margin and Adjusted Cost of Revenue1

(dollars in millions, unaudited)

1Adjusted gross margin is a non-GAAP measure, which we define as GAAP revenue less adjusted cost of revenue divided by GAAP revenue. Adjusted cost of revenue is a non-GAAP measure and excludes stock-based compensation expense, payroll and other tax expense related to stock-based compensation,

depreciation and amortization, and certain other items impacting net income (loss) from time to time. In Q4 2022 and Q1 2024, other items included restructuring charges of $7 million and $1 million. See Appendix for further detail.10 Numbers throughout presentation may not foot due to rounding.

INFRASTRUCTURE INVESTMENT STABILIZED IN Q1 2024

INFRASTRUCTURE COST PER DAU DECLINED FROM $0.84 IN Q4 2023 TO $0.80 IN Q1 2024