Snap(SNAP) - 2025 Q1 - Quarterly Results

Q1 2025 Financial Highlights Snap Inc. reported strong Q1 2025 results, achieving $1.36 billion revenue, significantly reduced net loss, and substantial Adjusted EBITDA growth Q1 2025 Financial Performance vs. Q1 2024 (in millions) | Metric | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $1,363.2 million | $1,194.8 million | 14% | | Net Loss | $(139.6) million | $(305.1) million | 54% improvement | | Adjusted EBITDA | $108.4 million | $45.7 million | 137% | | Net cash from operating activities | $151.6 million | $88.4 million | 72% | | Free Cash Flow | $114.4 million | $37.9 million | 202% | | Diluted net loss per share | $(0.08) | $(0.19) | 58% improvement | - The company's community grew to over 900 million monthly active users (MAU), marking a significant milestone[3] - Daily Active Users (DAU) increased by 9% year-over-year, reaching 460 million[2] Q1 2025 Operational Highlights Operational highlights include enhanced direct-response advertising, increased Spotlight engagement, significant growth in other revenue, and advancements in AR and Spectacles platforms Community Engagement User engagement deepened with MAU exceeding 900 million and DAU reaching 460 million, alongside significant growth in Spotlight posts and My AI usage - Reached over 900 million monthly active users (MAU) and 460 million daily active users (DAU), a 9% YoY increase for DAUs[11] - The total number of Snap Star Spotlight posts grew by over 125% year-over-year[11] - My AI Daily Active Users in the U.S. grew more than 55% year-over-year due to multimodal improvements[11] Revenue Growth and Diversification Revenue growth is accelerating through a 60% YoY increase in active advertisers, improved bidding strategies, and a 75% YoY surge in other revenue sources - Total active advertisers grew by 60% year-over-year in Q1[11] - Other Revenue, the majority of which is from Snapchat+ subscriptions, increased by 75% year-over-year in Q1[11] - The company expanded its Agency Partner Program to agencies of all sizes and launched new brand suitability solutions for advertisers[11] Augmented Reality (AR) Platform Investment Investments in the AR platform led to advanced AI video Lenses, simplified Lens creation with 'Easy Lens' generating 2 billion impressions, and doubled Lens Studio downloads - The 'Easy Lens' AI-powered tool, in early testing since mid-December, has been used to create over 10,000 Lenses, generating over 2 billion impressions[11] - In Q1, Lens Studio downloads more than doubled year-over-year, and its monthly active users reached an all-time high[11] - New platform capabilities were introduced, including integration with GPS, compass heading, and custom locations to improve location-based AR experiences[11] Next-Generation AR for Spectacles Advancements in Spectacles AR include multiplayer experiences via Connected Lens technology, new developer incentives, and platform enhancements like in-game leaderboards - Niantic's Peridot game was updated to enable a multiplayer AR experience using Snap's Connected Lens technology, connecting Spectacles with the mobile game[11] - Introduced Spectacles Community Challenges, a new way for developers to win cash prizes for creating high-quality Lenses[11] - Platform enhancements for Spectacles Lenses include the ability to integrate in-game leaderboards and new hand tracking capabilities[11] Q2 2025 Outlook The Q2 2025 outlook will be discussed during the Q1 2025 earnings call and detailed in the investor letter, with no specific quantitative guidance provided - The company will discuss its Q2 2025 outlook during its Q1 2025 Earnings Call and in its investor letter[12] Financial Statements Consolidated financial statements detail Snap's financial position, showing a 14% revenue increase, reduced operating loss, and improved operating cash flow Consolidated Statements of Operations Q1 2025 revenue grew to $1.36 billion, with total costs increasing slightly, resulting in a significantly reduced operating loss and improved net loss Q1 2025 Statement of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $1,363,217 | $1,194,773 | | Total costs and expenses | $1,557,063 | $1,528,005 | | Operating loss | $(193,846) | $(333,232) | | Net loss | $(139,587) | $(305,090) | Consolidated Balance Sheets As of March 31, 2025, total assets were $7.59 billion, with total liabilities at $5.28 billion, resulting in $2.31 billion in stockholders' equity Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $4,577,037 | $4,906,757 | | Total assets | $7,589,200 | $7,936,348 | | Total current liabilities | $1,064,437 | $1,243,548 | | Total liabilities | $5,277,865 | $5,485,587 | | Total stockholders' equity | $2,311,335 | $2,450,761 | Consolidated Statements of Cash Flows Net cash from operating activities significantly increased to $151.6 million, while investing activities provided cash, and financing activities primarily used cash for repurchases Q1 2025 Cash Flows (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $151,610 | $88,352 | | Net cash provided by (used in) investing activities | $2,754 | $(131,183) | | Net cash provided by (used in) financing activities | $(288,519) | $(675,751) | Reconciliation of GAAP to Non-GAAP Measures Reconciliations are provided for Free Cash Flow, which was $114.4 million, and Adjusted EBITDA, which reached $108.4 million, to their comparable GAAP measures Q1 Free Cash Flow Reconciliation (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $151,610 | $88,352 | | Less: Purchases of property and equipment | (37,214) | (50,448) | | Free Cash Flow | $114,396 | $37,904 | Q1 Adjusted EBITDA Reconciliation (in thousands) | Description | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(139,587) | $(305,090) | | Stock-based compensation expense | 247,338 | 254,715 | | Depreciation and amortization | 37,715 | 38,098 | | Restructuring charges | — | 70,108 | | Other adjustments | (32,039) | (12,492) | | Adjusted EBITDA | $108,425 | $45,659 | Key Business Metrics Key business metrics show Daily Active Users (DAUs) grew 9% to 460 million, primarily driven by the Rest of World region, and Average Revenue Per User (ARPU) increased 5% Daily Active Users (DAU) by Region (in millions) | Region | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | North America | 99 | 100 | (1)% | | Europe | 99 | 96 | 3% | | Rest of World | 262 | 226 | 16% | | Total | 460 | 422 | 9% | Average Revenue Per User (ARPU) by Region | Region | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | North America | $8.41 | $7.44 | 13% | | Europe | $2.26 | $2.04 | 11% | | Rest of World | $1.17 | $1.13 | 4% | | Total | $2.96 | $2.83 | 5% | Revenue by Region (in thousands) | Region | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | North America | $831,691 | $743,131 | 12% | | Europe | $224,015 | $195,844 | 14% | | Rest of World | $307,511 | $255,798 | 20% |