SNAP Q4 2020 Earnings

Call Details

• Call Title: Snap Q4 2020 Earnings Call
• Date: February 4, 2021 at 10:00 PM UTC
• Management Team:
  • Evan Spiegel (Chief Executive Officer and Co-founder)
  • Jeremi Gorman (Chief Business Officer)
  • Derek Andersen (Chief Financial Officer)
  • Betsy Frank (Senior Director of Investor Relations)

Call Summary

Financial Performance

• Daily active users were 265 million in Q4, an increase of 16 million or up 22% year over year.
• Q4 revenue was $911 million, up 62% year over year with a 10 percentage point acceleration versus the prior quarter.
• Global ARPU grew 33% year over year in Q4 and eCPM increased 46% year over year in Q4.
• Revenue from commercials more than doubled year over year in Q4 while revenue from pixel-verified purchase goal-based bidding more than tripled year over year in Q4.
• Gross margin was 59% in Q4, up three percentage points year over year, with infrastructure cost per DAU of $0.69 in Q4 versus $0.72 in the prior year.
• Q4 adjusted EBITDA was $166 million, and full-year 2020 adjusted EBITDA was positive $45 million.
• Net loss was $113 million in Q4, an improvement of $128 million year over year, and free cash flow was negative $69 million in Q4.
• Cash and marketable securities totaled $2.5 billion at quarter end, up from $2.1 billion in the prior year.

Guidance

• Snap estimated Q1 DAU growth of approximately 20% year over year to reach 275 million daily active users.
• Snap provided Q1 revenue guidance implying year-over-year growth of approximately 56% to 60%, or revenue of approximately $720 million to $740 million.
• Snap estimated Q1 adjusted EBITDA to be approximately negative $70 million to negative $50 million.
• The guidance range explicitly incorporates a risk of interruption to demand associated with anticipated iOS platform policy changes later in the quarter.
• Snap noted a short period of advertiser pause in the first two weeks of January that contributed to a slower start to Q1.
• Snap stated that the longer-term impact of the iOS changes is uncertain and could take several months to become clear.
• Snap confirmed continuation of the Spotlight creator incentive program at over $1 million per day as part of Q1 investments.