snapchat ipo filing chart deck
TRANSCRIPT
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• This deck is a free sample of the Jackdaw Research Quarterly Company Decks subscription service
• The paid service includes about a dozen similar decks produced each quarter on major consumer tech companies
• The intention is to highlight trends and patterns which are not always obvious when merely looking at a spreadsheet
• Accompanying analysis can often be found on our blog at www.beyonddevic.es
• For more information, please visit: https://jackdawresearch.com/quarterly-company-decks/
INTRODUCTIONJACKDAW RESEARCH QUARTERLY DECKS SERVICE
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• Snap Inc (maker of the Snapchat app) is not yet a public company
• It filed confidentially with the SEC for an IPO in late 2016, and on February 2, 2017, it released its S-1 publicly
• We therefore finally have deep insights into the key financial and operating metrics at Snap as it prepares for an IPO, albeit only for a short period – it generated no meaningful revenue before 2015, so the financials only cover 2015 and 2016, though some other metrics go back to 2014
• Assuming the IPO goes ahead, I will be adding Snap to the list of companies for which decks are provided each quarter as part of the Jackdaw Research Quarterly Decks Service
INTRODUCTIONSNAP INC FINANCIALS
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REVENUEQUARTERLY, $000
0
50,000
100,000
150,000
200,000
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Source: Snap financial filings, Jackdaw Research analysis
5 Source: Snap financial filings, Jackdaw Research analysis
REVENUEBY REGION, $000
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
North America Europe Rest of World
6 Source: Snap financial filings, Jackdaw Research analysis
REVENUESPLIT BY REGION, %
0%
20%
40%
60%
80%
100%
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
North America Europe Rest of World
7 Source: Snap financial filings, Jackdaw Research analysis
REVENUEPERCENTAGE OF TOTAL REVENUE FROM ADVERTISING, %
0%
20%
40%
60%
80%
100%
2015 2016
96%98%
8 Source: Snap financial filings, Jackdaw Research analysis
GROSS MARGINAS REPORTED
-700%
-600%
-500%
-400%
-300%
-200%
-100%
0%
100%
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Snap’s Gross Margin is its only margin which is anywhere close to positive (it was marginally positive in Q4 2016) – all other margins are at around -100% or worse, so it’s meaningful to put them on a slide. See the succeeding
slides for some other indicators of profitability
9 Source: Snap financial filings, Jackdaw Research analysis
COSTSAS MULTIPLE OF REVENUE, QUARTERLY
0
5
10
15
20
25
30
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Cost of revenue R&D S&M G&A Total
10 Source: Snap financial filings, Jackdaw Research analysis
COSTSAS MULTIPLE OF REVENUE, QUARTERLY – SHORTER TERM VIEW
0
1
2
3
4
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
Cost of revenue R&D S&M G&A
11 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERSQUARTERLY AVERAGE METHOD, M
0
50
100
150
200
Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016
12 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERSLAST MONTH OF THE QUARTER METHOD, M
0
50
100
150
200
Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016
Some other companies (Twitter and Facebook, for example) report user numbers based on the last month of each quarter. Snap instead prefers to use quarterly
averages (as shown on the previous slide), but also provides this version based on last month of the quarter.
13 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERSQUARTERLY AVERAGE METHOD, BY REGION, M
0
50
100
150
200
Q1 2014Q2 2014Q3 2014Q4 2014Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016
North AmericaEuropeRest of World
14 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERSQUARTERLY AVERAGE METHOD, BY REGION, M
0%
20%
40%
60%
80%
100%
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
North America Europe Rest of World
15 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERSQUARTERLY AVERAGE METHOD, BY REGION, M
0
10
20
30
40
50
60
70
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
North America Europe Rest of World
16 Source: Snap financial filings, Jackdaw Research analysis
GROWTH IN DAILY ACTIVE USERSQUARTER ON QUARTER, QUARTERLY AVERAGE METHOD, M
0
5
10
15
20
25
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
17 Source: Snap financial filings, Jackdaw Research analysis
GROWTH IN DAILY ACTIVE USERSQUARTER ON QUARTER, QUARTERLY AVERAGE METHOD, BY REGION, M
0
1
2
4
5
6
7
Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
North America Europe Rest of World
18 Source: Snap financial filings, Jackdaw Research analysis
GROWTH IN DAILY ACTIVE USERSYEAR ON YEAR, QUARTERLY AVERAGE METHOD, M
0
10
20
30
40
50
60
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016
19 Source: Snap financial filings, Jackdaw Research analysis
REVENUE SHARETO PUBLISHER PARTNERS, FROM SNAP-SOLD ADS, $000
0
10,000
20,000
30,000
40,000
50,000
60,000
2015 2016
20 Source: Snap financial filings, Jackdaw Research analysis
MISCELLANEOUS DATA POINTSFROM THE S-1 FILING, MOSTLY RELATING TO Q4 2016
Snaps created per day 2.5 billion
% of DAUs creating a Snap with the Camera daily Over 60%
Visits to Snapchat per day per DAU 18
% of users posting to their Story every day 25%
Average time spent per day 25-30 minutes
Jan Dawson Chief Analyst (408) 744-6244 [email protected] @jandawson
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