1.
Jan Dawson
Chief Analyst
(408) 744-6244
jan@jackdawresearch.com
@jandawson
SNAP INC Q1 2018

2.
2
• This deck is a part of the Jackdaw Research Quarterly Company
Decks subscription service
• The 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/
INTRODUCTION
JACKDAW RESEARCH QUARTERLY DECKS SERVICE

3.
3
• Snap filed confidentially with the SEC for an IPO in late 2016,
and on February 2, 2017, it released its S-1 publicly, and the
first version of this deck was based on that document,
subsequently amended in an S-1/A
• Since then, Snap has begun reporting earnings as a public
company and this deck is based on those figures
• Snap’s earnings releases have essentially no commentary,
and although management provides a little more in
prepared remarks on the call, much of the insight comes
from the Q&A portion
INTRODUCTION
SNAP INC FINANCIALS

4.
4
REVENUE
QUARTERLY, $000
Source: Snap financial filings, Jackdaw Research analysis
0
50,000
100,000
150,000
200,000
250,000
300,000
Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018 Q1 2018

5.
5 Source: Snap financial filings, Jackdaw Research analysis
REVENUE
BY REGION, $000
0
50,000
100,000
150,000
200,000
250,000
300,000
Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
North America
Europe
Rest of World

6.
6 Source: Snap financial filings, Jackdaw Research analysis
REVENUE
SPLIT BY REGION, %
0%
20%
40%
60%
80%
100%
Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
North America Europe Rest of World

7.
7 Source: Snap financial filings, Jackdaw Research analysis
REVENUE AND DAU
SPLIT BY REGION, %, MOST RECENT QUARTER
0%
25%
50%
75%
100%
Revenue Users
25%
12%
32%
14%
42%
74%
North America Europe Rest of World

8.
8 Source: Snap financial filings, Jackdaw Research analysis
AVERAGE REVENUE PER USER
BY REGION AND TOTAL, $ PER QUARTER
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
Global North America Europe Rest of World

9.
9 Source: Snap financial filings, Jackdaw Research analysis
AVERAGE REVENUE PER USER
BY REGION, OUTSIDE NORTH AMERICA, $ PER QUARTER
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
Europe Rest of World

10.
10 Source: Snap financial filings, Jackdaw Research analysis
AVERAGE REVENUE PER USER
BY REGION, TRAILING 4 QUARTERS, $
0.00
1.50
3.00
4.50
6.00
7.50
9.00
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Total North America
Europe Rest of World

11.
11 Source: Snap financial filings, Jackdaw Research analysis
REVENUE
PERCENTAGE OF TOTAL REVENUE FROM ADVERTISING, %
0%
20%
40%
60%
80%
100%
2015 2016 2017
97%96%98%

12.
-700%
-600%
-500%
-400%
-300%
-200%
-100%
0%
100%
Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
12 Source: Snap financial filings, Jackdaw Research analysis
GROSS MARGIN
AS REPORTED, FULL AVAILABLE TIMESCALE

13.
13 Source: Snap financial filings, Jackdaw Research analysis
GROSS MARGIN
AS REPORTED, SHORTER TIMESCALE FOR BETTER VISIBILITY
-100%
-80%
-60%
-40%
-20%
-0%
20%
40%
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

14.
-300%
-250%
-200%
-150%
-100%
-50%
0%
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
14 Source: Snap financial filings, Jackdaw Research analysis
ADJUSTED EBITDA MARGIN
AS REPORTED
Alongside operating and net margins, Snap also reports
Adjusted EBITDA margin, which is the only margin beyond
gross margin that wasn’t affected by the massive SBC
expense in Q1. As such, it’s provided here, though you can
see that it hasn’t performed particularly well recently either

15.
0
5
10
15
20
25
30
Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
Cost of revenue R&D S&M G&A Total
15 Source: Snap financial filings, Jackdaw Research analysis
COSTS
AS MULTIPLE OF REVENUE, QUARTERLY
When Snap IPO’d in Q1 2017, it saw a huge spike in its
non-cash costs relating to stock-based compensation,
which dramatically distorted the numbers shown on this
slide and its margin numbers. The chart on the next slide
excludes SBC for easier comparison of underlying trends

16.
16 Source: Snap financial filings, Jackdaw Research analysis
COSTS
AS MULTIPLE OF REVENUE, QUARTERLY, EXCLUDING SBC
Cost Components as Multiple of Revenues excl. SBC
0
3
6
9
12
15
18
Q1 2015Q2 2015Q3 2015Q4 2015Q1 2016Q2 2016Q3 2016Q4 2016Q1 2017Q2 2017Q3 2017Q4 2017Q1 2018
Cost of revenue R&D S&M G&A Total

17.
0
2
4
6
8
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Cost of revenue R&D S&M G&A
17 Source: Snap financial filings, Jackdaw Research analysis
COSTS
AS MULTIPLE OF REVENUE, QUARTERLY – SHORTER TERM VIEW
When Snap IPO’d in Q1 2017, it saw a huge
spike in its non-cash costs relating to stock-
based compensation, which dramatically
distorted the numbers shown on this slide
and its margin numbers. The chart on the
next slide excludes SBC for easier
comparison of underlying trends

18.
18 Source: Snap financial filings, Jackdaw Research analysis
COSTS
AS MULTIPLE OF REVENUE, QUARTERLY – SHORTER TERM VIEW
0
2
4
6
8
Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Cost of revenue R&D S&M G&A Total

19.
19 Source: Snap financial filings, Jackdaw Research analysis
COST OF REVENUE
BREAKDOWN INTO COMPONENTS, $000S
0
20
40
60
80
100
120
140
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Hosting costs Revenue share cost Other cost of revenue

20.
20 Source: Snap financial filings, Jackdaw Research analysis
COST OF REVENUE
HOSTING COSTS AS A PERCENTAGE OF REVENUE
0%
50%
100%
150%
200%
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

21.
21 Source: Snap financial filings, Jackdaw Research analysis
CLOUD SERVICE COSTS
MINIMUM CONTRACTUAL COMMITMENTS TO GOOGLE AND AMAZON
0
200
400
600
800
2017 2018 2019 2020 2021
Google Amazon

22.
22 Source: Snap financial filings, Jackdaw Research analysis
REVENUE SHARE
TO PUBLISHER PARTNERS, FROM SNAP-SOLD ADS, $000
0
20,000
40,000
60,000
80,000
100,000
2015 2016 2017

23.
23 Source: Snap financial filings, Jackdaw Research analysis
REVENUE SHARE
TO PUBLISHER PARTNERS, FROM SNAP-SOLD ADS, $M AND AS % OF REVENUE
0%
5%
10%
15%
20%
25%
0
5
10
15
20
25
30
35
Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018
Revenue share cost Revenue share as % of revenue

24.
24 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERS
QUARTERLY AVERAGE METHOD, M
0
50
100
150
200
Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018

25.
25 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERS
QUARTERLY AVERAGE METHOD, BY REGION, M
0
50
100
150
200
Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018
North America
Europe
Rest of World

26.
26 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERS
QUARTERLY AVERAGE METHOD, BY REGION, AS % OF TOTAL
0%
20%
40%
60%
80%
100%
Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018
North America Europe Rest of World

27.
27 Source: Snap financial filings, Jackdaw Research analysis
DAILY ACTIVE USERS
QUARTERLY AVERAGE METHOD, BY REGION, M
0
10
20
30
40
50
60
70
80
90
Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018
North America
Europe
Rest of World

28.
0
5
10
15
20
25
Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016 Q4 2016 Q2 2017 Q4 2017
28 Source: Snap financial filings, Jackdaw Research analysis
GROWTH IN DAILY ACTIVE USERS
QUARTER ON QUARTER, QUARTERLY AVERAGE METHOD, M
The line on this chart is intended to show
that the >10m per quarter growth Snap
experienced in 2016 shortly before its IPO
was an aberration rather than a new normal

29.
29 Source: Snap financial filings, Jackdaw Research analysis
GROWTH IN DAILY ACTIVE USERS
QUARTER ON QUARTER, QUARTERLY AVERAGE METHOD, BY REGION, M
0
1
2
3
4
5
6
7
Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016 Q4 2016 Q2 2017 Q4 2017
North America Europe Rest of World

30.
30 Source: Snap financial filings, Jackdaw Research analysis
GROWTH IN DAILY ACTIVE USERS
YEAR ON YEAR, QUARTERLY AVERAGE METHOD, M
0
10
20
30
40
50
60
Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018

31.
31 Source: Snap financial filings, Jackdaw Research analysis
SPECTACLES SALES
UNIT SALES, AS IMPLIED BY “OTHER” REVENUE, THOUSANDS
0
10
20
30
40
50
60
70
Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

32.
32 Source: Snap financial filings, Jackdaw Research analysis
AUTOMATING AD BUYING
% OF AD IMPRESSIONS SOLD PROGRAMATTICALLY
0%
20%
40%
60%
80%
100%
Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

33.
33 Source: Snap financial filings, Jackdaw Research analysis
EMPLOYEES
HEADCOUNT, DATA SNAP HAS PROVIDED LITTLE OF HISTORICALLY
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018

34.
34 Source: Snap financial filings, Jackdaw Research analysis
MISCELLANEOUS DATA POINTS
FROM EARNINGS CALLS AND OTHER DATA SOURCES
S-1 Data (mostly
for Q4 2016)
Q1 2017 Q3 2017
Snaps created per day 2.5 billion Over 3 billion Over 3.5bn
% of DAUs creating a
Snap with the Camera
daily
Over 60% - -
Visits to Snapchat per
day per DAU
18 - 25
% of users posting to
their Story every day
25% - -
Average time spent per
day
25-30 minutes Over 30 minutes -
No updated info in Q4 2017 or Q1 2018

35.
Jan Dawson
Chief Analyst
(408) 744-6244
jan@jackdawresearch.com
@jandawson
FOR ANY QUESTIONS,
PLEASE CONTACT: