Financial Data and Key Metrics Changes - In Q1 2025, total revenue increased by 14% year over year to $1,363,000,000, with advertising revenue growing by 9% to $1,211,000,000 [23][5] - Adjusted EBITDA reached $108,000,000, up from $46,000,000 in Q1 of the prior year, reflecting improved revenue growth and expense discipline [27][28] - Free cash flow was $114,000,000 in Q1, contributing to a trailing twelve-month free cash flow of $295,000,000 [28][29] Business Line Data and Key Metrics Changes - Direct Response advertising revenue contributed 75% of total advertising revenue for the first time, indicating a shift towards performance-oriented solutions [24] - Other revenue, primarily from Snapchat Plus subscriptions, increased by 75% year over year to $152,000,000, with subscribers reaching nearly 15,000,000 [23][5] - Global impression volume grew approximately 17% year over year, driven by expanded advertising delivery within Spotlight and Creator Stories [25] Market Data and Key Metrics Changes - North America revenue growth accelerated to 12% year over year, up from 8% in the prior quarter, driven by direct response advertising revenue growth [23] - Europe revenue grew by 14% year over year, while Rest of World revenue increased by 20% year over year [23] - Daily Active Users (DAU) in North America was 99,000,000, unchanged from the prior quarter, while DAU in Europe remained at 99,000,000 [7] Company Strategy and Development Direction - The company is prioritizing innovation in enhancing core product value, investing in AI and ML models, and strengthening the creator ecosystem [9][14] - Continued focus on visual communication and augmented reality as strategic differentiators, with significant investments in AR capabilities [21][14] - The company aims to diversify revenue sources and improve advertising performance through ongoing enhancements to its ad platform [31][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in Q2 but emphasized a strong start to the year with solid Q1 results [43][44] - The company remains optimistic about long-term prospects due to progress in ad platform improvements and diversification of revenue sources [32][31] - Management is cautious about macroeconomic conditions impacting advertising demand and has opted not to provide formal financial guidance for Q2 [30][31] Other Important Information - The company repurchased 27,000,000 shares at a cost of $257,000,000 in Q1, contributing to a decline in total debt outstanding [29] - Adjusted gross margin improved to 53% in Q1, up from 52% in the prior year [27] - The company is testing a refined five-tab interface to enhance user experience and engagement [12] Q&A Session Summary Question: Improvement in North American revenue growth - Management noted strong growth in the small and medium customer segment and healthy contributions from Snapchat Plus [36] Question: Impact of macro conditions on advertising demand - Management acknowledged headwinds but emphasized ongoing growth and diversification efforts [44] Question: Future growth in direct response advertising - Management highlighted ongoing improvements in the ad platform and product roadmap as key to achieving higher growth rates [51] Question: Engagement trends in North America - Management expressed confidence in stabilizing DAU in North America and emphasized ongoing investments in content and user engagement [78] Question: Cost structure and headcount management - Management indicated a thoughtful approach to managing costs and balancing headcount growth with business needs [86]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue was $1,363,000,000, up 14% year over year, and up 15% on a constant currency basis [24] - Adjusted EBITDA was $108,000,000, up from $46,000,000 in Q1 of the prior year, reflecting higher revenue growth and operating expense discipline [27] - Free cash flow was $114,000,000 in Q1, while operating cash flow was $152,000,000 [28][29] Business Line Data and Key Metrics Changes - Advertising revenue was $1,211,000,000, up 9% year over year, with direct response advertising revenue contributing 75% of total advertising revenue for the first time [24] - Other revenue, primarily from Snapchat Plus, increased 75% year over year to $152,000,000, with subscribers reaching nearly 15,000,000, a 59% increase year over year [24] - Global impression volume grew approximately 17% year over year, driven by expanded advertising delivery within Spotlight and Creator Stories [25] Market Data and Key Metrics Changes - North America revenue growth accelerated to 12% year over year in Q1, up from 8% in the prior quarter [24] - Europe revenue grew 14% year over year, while Rest of World revenue grew 20% year over year [24] - Daily Active Users (DAU) in North America was 99,000,000, unchanged from the prior quarter, while Europe also remained stable at 99,000,000 [9] Company Strategy and Development Direction - The company is focused on enhancing core product value, investing in AI and ML models for better content ranking, and strengthening the creator ecosystem [10] - Continued investment in augmented reality (AR) and the advertising platform is seen as critical for long-term monetization opportunities [16][22] - The company aims to balance investment with top-line growth to achieve GAAP profitability over time [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged headwinds in Q2 but emphasized ongoing growth and strong performance in Q1 [44] - The company is optimistic about long-term prospects due to progress in the ad platform, diversification of revenue sources, and a strong balance sheet [32] - Management is cautious about macroeconomic conditions affecting advertising demand and has opted not to provide formal financial guidance for Q2 [31] Other Important Information - The company repurchased 27,000,000 shares at a cost of $257,000,000 in Q1 [30] - The total cash repurchase price for convertible notes was $198,100,000 below par value, contributing to a decline in total debt outstanding [30] - The company ended Q1 with $3,200,000,000 in cash and marketable securities on hand [30] Q&A Session Summary Question: Improvement in North American revenue growth - Management noted strong growth in the small and medium customer segment and healthy contributions from Snapchat Plus [37] Question: Impact of macro conditions on advertising demand - Management acknowledged headwinds but emphasized ongoing growth and diversification efforts [44] Question: Future growth in direct response advertising - Management highlighted ongoing improvements in the ad platform and product roadmap as key to achieving higher growth rates [50] Question: Engagement trends in Spotlight - Management reported significant growth in Spotlight engagement, with view time increasing about 25% year over year [59] Question: Progression of advertising performance into April - Management indicated early growth but noted some headwinds, particularly related to changes in advertising regulations [69] Question: Headcount and cost management - Management confirmed a focus on balancing hiring with cost structure adjustments to support core priorities [86]