Overview

Snap Inc. (SNAP) is a camera company.

Snap believe that reinventing the camera represents Its greatest opportunity to improve the way that people live and communicate. Its products empower people to express themselves, live in the moment, learn about the world, and have fun together.

Its flagship product, Snapchat, is a camera application that was created to help people communicate through short videos and images. The company call each of those short videos or images a Snap. On average, 173 million people use Snapchat daily, and over 3.0 billion Snaps are created every day. On average, its users visit Snapchat more than 20 times per day and spend over 30 minutes on Snapchat every day.1

Trends in User Metrics

User Engagement

The company define a Daily Active User as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. The company measure average Daily Active Users for a particular quarter by calculating the average Daily Active Users for that quarter. The company also break out Daily Active Users by geography because certain markets have a greater revenue opportunity and lower bandwidth costs.

The company averaged 173 million DAUs across the quarter, as compared to 143 million in the second quarter of 2016, an increase of 21%. The majority of that growth continues to be driven by core markets like North America and Europe.

Quarterly Average Daily Active Users (in millions) https://www.sec.gov/Archives/edgar/data/1564408/000156459017017303/g201708101833243224846.jpg

https://www.sec.gov/Archives/edgar/data/1564408/000156459017017303/g201708101833243374847.jpg

(1) North America includes Mexico and the Caribbean. (2) Europe includes Russia and Turkey.

Monetization The company monetize its business primarily through advertising. Its advertising products include Snap Ads and Sponsored Creative Tools like Sponsored Lenses and Sponsored Geofilters. While its advertising business is still in its early stages, it has grown rapidly. In the three months ended June 30, 2017, The company recorded revenue of $181.7 million as compared to revenue of $71.8 million for the same period in 2016, representing a 153% year-over-year increase. In the six months ended June 30, 2017, The company recorded revenue of $331.3 million as compared to revenue of $110.6 million for the same period in 2016, a 200% year-over-year increase.

Snap measure progress in its advertising business using ARPU because it helps it understand the rate at which monetizing its daily user base. The company define ARPU as quarterly revenue divided by the average Daily Active Users.

For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on a determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This differs from the presentation of its revenue by geography in the notes to its consolidated financial statements, where revenue is based on the billing address of the advertising customer.

Quarterly Average Revenue per User

https://www.sec.gov/Archives/edgar/data/1564408/000156459017017303/g201708101833244434848.jpg

https://www.sec.gov/Archives/edgar/data/1564408/000156459017017303/g201708101833244504849.jpg

(1) North America includes Mexico and the Caribbean. (2) Europe includes Russia and Turkey.

ARPU was $1.05 in the second quarter of 2017, up from $0.50 a year ago and $0.90 in the first quarter of 2017. In North America, ARPU was $1.97, 88% higher than its global average. The company believe North America remains a leading indicator for the scale potential of its business.

References

  1. ^ https://fintel.io/doc/sec-snap-snapchat-10k-2019-february-06-17945
Tags: US:SNAP
Created by Asif Farooqui on 2019/12/31 03:58
     
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