Snap Inc Q3 FY2024 earnings call

• Daily active users reached 443 million in Q3, a year-over-year increase of 37 million. • Total revenue increased 15% year-over-year to $1.37 billion, boosted by DR advertising and Snapchat+ subscription growth. • Total active advertisers more than doubled year-over-year in Q3. • Launched a new simplified version of Snapchat (Simple Snapchat), Sponsored Snaps, and Promoted Places. • Launched the fifth generation of Spectacles and introduced generative AI innovations for the AR developer platform. • Content time spent watching grew 25% year-over-year, with Spotlight content sharing up over 60% year-over-year.

In Q3, total revenue was $1.37 billion, an increase of 15% year-over-year. Advertising revenue was $1.25 billion, up 10% year-over-year, driven primarily by growth from direct response (DR) advertising revenue, which increased 16% year-over-year. Other revenue more than doubled year-over-year to reach $123 million in Q3, with Snapchat+ subscribers more than doubling year-over-year to exceed 12 million. North America revenue grew 9% year-over-year, Europe revenue grew 24% year-over-year, and Rest of World revenue grew 32% year-over-year.

• Anticipates DAU to be approximately 451 million in Q4. • Q4 revenue guidance ranges from $1.51 billion to $1.56 billion, implying year-over-year revenue growth of 11% to 15%. • Adjusted EBITDA is expected to be between $210 million and $260 million in Q4. • Authorized a new $500 million share repurchase program.

• There is a risk of near-term disruption from the transition to Simple Snapchat. • Limited testing is ongoing in highly monetized markets with caution. • Upper-funnel advertising from large enterprise clients has been underperforming in recent quarters, posing a risk to Q4 revenue.

Q: Dan Salmon inquired about monitoring and managing risk related to the Simple Snapchat transition.

A: Evan Spiegel stated they are taking a test-and-learn approach, focusing on understanding inventory shifts and potential monetization impacts.

Q: Rich Greenfield followed up on Simple Snapchat rollout in major markets.

A: Evan Spiegel said they are early in understanding monetization dynamics and will take time to work through changes.

Q: Justin Post asked about Sponsored Snaps and Promoted Places.

A: Evan Spiegel explained they leverage the performance advertising foundation, with excitement about Promoted Places and upcoming Sponsored Snaps tests.

Q: Ken Gawrelski asked about objectives of Simple Snapchat.

A: Evan Spiegel said focus is on community engagement and unifying content experience for community and partners.

Q: James Heaney asked about app install product and Q4 guide.

A: Derek Andersen talked about app install optimization results and mentioned Q4 guide is informed by DR business momentum and limited Simple Snapchat testing.

Q: Shweta Khajuria asked about confidence in ad revenue growth.

A: Derek Andersen discussed ML/AI efforts, product optimizations, and go-to-market efforts for DR and SMB segments.

Q: Ross Sandler asked about Spectacles investment and Meta Orion.

A: Evan Spiegel said focus is on developer ecosystem for Spectacles, seeding lens experiences for consumer adoption.