Snap, Inc. (SNAP) Q4 2020 Earnings Call Transcript

Snap, Inc.  (NYSE: SNAP) Q4 2020 earnings call dated Feb. 04, 2021

Corporate Participants:

Betsy Miller Frank — Head of Investor Relations

Evan Spiegel — Chief Executive Officer

Jeremi Gorman — Chief Business Officer

Derek Andersen — Chief Financial Officer

Analysts:

Ross Sandler — Barclays — Analyst

Michael Levine — Pivotal Research Group — Analyst

Heath Terry — Goldman Sachs — Analyst

Rich Greenfield — LightShed Partners — Analyst

Justin Post — Bank of America Merrill Lynch — Analyst

Lloyd Walmsley — Deutsche Bank — Analyst

Mark Shmulik — Bernstein — Analyst

Brian Nowak — Morgan Stanley — Analyst

Doug Anmuth — J.P. Morgan — Analyst

Presentation:

Operator

Good afternoon everyone and welcome to Snap, Inc’s Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] This call will be recorded. Thank you very much. Betsy Frank, Senior Director of Investor Relations, you may begin.

Betsy Miller Frank — Head of Investor Relations

Thank you and good afternoon everyone, welcome to Snap’s fourth quarter 2020 earnings conference call. With us today are Evan Spiegel, Chief Executive Officer and Co Co-Founder; Jeremi Gorman, Chief Business Officer; and Derek Andersen, Chief Financial Officer.

Earlier today, we made a slide presentation available that provides an overview of our user and financial metrics for the fourth quarter 2020, which can be found on our Investor Relations website at investor.snap.com.

Now, I will cover the Safe Harbor. Today’s call is to provide you with information regarding our fourth quarter 2020 performance, in addition to our financial outlook. This conference call includes forward-looking statements. Any statement that refers to expectations, projections, guidance or other characterizations of future events, including financial projections, future market conditions or the impact of COVID-19 on our business and on the economy as a whole is a forward-looking statement based on assumptions today. Actual results may differ materially from those expressed in these forward-looking statements and we make no obligation to update our disclosures. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as risks described in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, particularly in the section titled Risk Factors. This information can be found in our other filings with the SEC, when available.

Our commentary today will also include non-GAAP financial measures. And we believe that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our press release issued today, a copy of which can be found on our Investor Relations website. Please note that when we discuss all of our expense figures, they will exclude stock-based compensation and related payroll taxes, as well as depreciation and amortization and non-recurring charges.

At times in our prepared remarks or in response to questions, we may offer additional metrics to provide greater insight into our business or our quarterly and annual results. This additional detail maybe one-time in nature and we may or may not provide an update in the future on these metrics. Please refer to our filings with the SEC to understand how we calculate our metrics.

With that, I’d like to turn the call over to Evan.

Evan Spiegel — Chief Executive Officer

Hi, everyone, and thank you for joining us. Our mission is to contribute to human progress by empowering people to express themselves within the moment, learn about the world and have fun together. From start to finish, 2020 reinforced the importance of that mission. During one of the most challenging years in recent history for our global community and their loved ones, our team worked hard to find ways to bring people closer together. We’ve enabled relationships to deepen and flourish, even as we are physically apart.

We added 16 million daily active users this quarter for a total of 265 million up 22% year-over-year. This growth validates the broad appeal of our service and the role we play in the life of each member of the Snapchat community. Our quarterly revenue increased 62% year-over-year to $911 million, showing the trust advertisers have placed in us and our communities’ receptiveness to brands with shared values. We expect our relationships with community members and business partners to become even stronger as our platform continues to evolve.