SNAP - Earnings call transcript Q3 2018

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Operator

Good afternoon, everyone and welcome to Snap Inc.'s Third Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. After the prepared remarks, there will be a question-and-answer session. [Operator Instructions] This call is being recorded. Thank you very much. Ms. Relations, begin. Investor of Southey you may Kristin

Kristin Southey

Stone, website. Thank Third for third our With Quarter Relations good presentation can afternoon available and us a which an quarter we to user Snap’s everyone. Welcome found and Tim Co-Founder Investor of XXXX and of are that Spiegel, XXXX, you Earlier slide the on Evan today, made and today CEO CFO. overview Earnings our provides Conference be Call. metrics financial

financial Now, a the information conditions, is including our make outlook. today. in cover and to includes future other I no those provide on third materially to projections, assumptions refers our that statements, to call to future expectations, projections performance call forward-looking will disclosures. results forward-looking based in guidance update Today's characterizations is Harbor. may differ expressed Safe we statements statements. XXXX obligation Actual from events, market you statement forward-looking financial regarding with conference or these addition Any of our This quarter or

filings factors described may For we about the today, release differ ended the XX-Q Form as please Factors. other for found refer SEC, that XX, on Risk report forward-looking quarterly information cause to in press to actual issued when the well as materially in more our from June risks results with statements, section be particularly our in titled quarter available. the XXXX, This can information

copy measures a understand exclude evaluating our isolation Investors to not include they as amortization measures in in in results. our metrics be ongoing note or taxes, to Please the when compensation one-time in may metrics. well from, our prepared in an to may a all in be results the metrics. of prepared may times and financial we quarterly and nature, insight use commentary as investor.snap.com. use we for, and non-GAAP release these future Please of can with our website provides provide trends. call results found considered reported or in measures. for and our detail in and remarks our be charges. that, Reconciliations we to information that an annual metrics refer non-recurring expense payroll believe may for tool these that issued today and financial With our I'd offer GAAP as These the calculate or operating Our will how additional substitute And At which on should today, and on also into accordance our response we we of to can will business depreciation greater at SEC figures, press found to financial questions, additional non-GAAP like filings to non-GAAP be provide our between GAAP. not the with This update additional Evan. or stock-based over related turn discuss

Evan Spiegel

highlights celebrated We communities drive our to of to and and today, to we team, growth plan future. where Through and seventh profitability the have one dedication of anniversary engaged hard the wanted in welcome everyone Hi, and some innovation we quarterly are and I how call. share most work, the mobile of the largest world. in recently our and we today earnings our

our we are different. community engagement grown have and We because

place content our instantly our to world the communicate built day. over way and from to about friends fastest to express We're platform. X family. billion camera, to learn created Snapchat visually a themselves ground close through up the with discover snaps on in resulting empower people shots every are the We We fun

devices built for mobile future present experience of your unique we friends that We like mobile on visually the and opportunities content created content We complements platforms. have mobile are that innovation communicating about built a we are by believe and premium excited mobile.

community, large because visual with daily a they service snaps Over every our and product we close active communication attracted friendships. Every their have of our built our users We day, and support around is core core create XX% because our loyal family. product product. people’s to have use is built close talk friends to communications

by our memories products have We launching of new or areas engagement like into discover successful our drive personal use in that been other advertising features and business. expanding product communications increase the and

month deliver XX% advertisers. accomplished years, scale and $X are over as the our team transformed have our two growth in to exceeds to to We're results. billion, model such now we we we we revenue about we XX and surface advertising past the incredibly business and respect self-service have value scratched have of opportunities. the time. grown short our future now what Over I’m to has just a to and the and our excited Trailing beginning see term proud long with continue

Today, Sales. including will of online starting mid-November the growth early focusing community, our scale years the General and and starting operations. expand term, Business and She’s Grusd customer four global and November partnerships, with where solutions, I'm last new time are business six news next at was CEO that Oath and to Chief to our will than where joining Development as for resources our recently of engagement phase been Officer years be improve of Jeremi information Global Amazon enter spent Head was and with head sales and Corporate more most including recently content Jared she and most monetization. increase in as team. we previously business development. three Head Counsel He Advertising in As responsibilities, and Gorman our years. be has he happy HuffPost of for at are Spotify responsibilities, for Strategy global Chief we two share long of leaders was Officer

year Europe. about but are proposition in There we the to US the incredible who have are among and XX demographic key term, of growing people significant We billions our have drivers long our worldwide to our grow in community broaden to global yet value core opportunity improve creating experience a use and our do reach user our olds XX Snapchat. community. over not and Continuing awareness of

daily and down quarter, X% This active year among X% The users our were was sequentially. primarily decline prior the grew over users. Android

progress, have us forward The in We for to modular a of when ready. the completely global select we're performance. application it's been community developing growth markets. making new our We version and represents application it to Android a be opportunity lightweight, rolling out good look testing and Android

our to are growth. products In we on our focused drive community, engagement addition to building increasing across

XX Tic-Tac major friends, spend In more on redesign to XXX with had day launched Snapchat QX. value than one people on in reality per with and saving users this more continues We minutes Snapchat we are to before. Toe, more ever premium of our average recently content community billion working memories. earlier Snapchatters a more our XX experience milestone new to Our than community. surpassed watching than provide million Since are unique year, our a shared over Snappables, augmented we there even

more of platform. range of reached invest us Show over audience in discover we discover quality XX a million XX, original is to viewers genres. wide monthly On QX, new attract in shows and of a quantity and viewers. new Our the for unique available our of Snap XX in announced XX content October both active to shows slate on allows continuing and layout a

less. paced is media content five our most benefit opportunity mobile, engagement, platform, running vertical content effort you fast shows it's our should of increase in expand A partners. for and Our with to or minutes offerings, made tailor and allows in draw the Discover, increase advertising us premium all library an our which quickly to

and results as demonstrate meaningful We advertising our business continue to progress. our scale improve monetization, we

Third sales XX% sequentially, our quarter by and advertisers. global which self-service medium-sized online and platform partners performance of businesses adoption our revenue small grew business, traction increased XX% driven by and in oriented includes and sales year-over-year

transacted Our up being quarter, our our by one improving subscription self-service, XX% by to budget X of growth this like The on-boarding and ago. XX% additional on self-service quarter, tools. Snapchat was cost advertising sales suite advertising products conversion reach, XX% via us past optimization efforts ROI, smaller the is our generation In and from advertisers of transition to has third initially revenue over that a driven by year couldn't scale tools which times. acquisition new for our their we lead allowed utilizing improved FabFitFun, company, their to and advertisers increased expanding subsequently

growth. opportunities optimization We drive measurement, relevance continue to to improving see in our and

e-bay part advertising compared rates our new the deliver products ago, views, typical QX. Snap one return Ad. as who we highly offerings optimization advertisers in-app app we've was helping engagement a increase to additions relevance events partners. of business best to as E-bay’s to their million added with is visits to and engaged measurement website allow group Ads. purchases. Collection Ad goal, XX with four five Snap Wish, represents million understand helps performance, Snapchat unlock as customers in typical saw an significantly we Ad party first quickly Ads. When where QX, for start consideration we help expanded for consistently objectives, impressive our product on such build than the brand rate, such Pixel showcase example, Ad. Since to continued of swipes. to on higher such standard launched a spend. The the particularly investment, for believe purchase ad and always Ads improve audience. from address young, objectives, installs up over Manager brand Collection and Collection us a These year In XXX in ROI their for Snap higher guests engagement times then, growth the are to additional we with advertisers place mobile, on our had up allow see conversion on QX, commerce test launch objectives video Snap and Our We which

create with increase For brand XX% coming The instance, to campaign Snapchat pink in X% penetration, from ambassadors over market an Wrigley’s campaign. drove new starburst for their successfully use all buyers.

all for of Chick-fil-A, such and shows, second using the sizes. have increasing With been pleased announcement new ad for Today, non-skippable original are businesses inventory with A Warner Universal and and of investment been XX we format our on of recent return initial as format. brands major have commercials, six their like Snap meaningful Mobile premium delivering we're studios variety the Fox we Boost results. Brothers,

our of advertisers, increase have average for the Looking ahead, to significant opportunity active increase grow spend advertiser we number and inventory. the

stories For a visual more. been reality, the ephemerality, communication, past we video, augmented much and seven years, vertical have leader in

over user are we opportunities to many Tim. and We have term We uniquely call I just for you we're now different started. experience drive about a to and and offer Thank the in excited long turn getting this the will we're the growth.

Tim Stone

Thanks, Evan.

reflect third results operational Our growth efficiencies. and on quarter financial driving our focus

delivered topline. results we financial performance generated We strong and significant prior in quarter. to prior compared quarter, the This the the year record and growth

We had adjusted in margin, adjusted margin EBITDA, EBITDA improvements and strong free gross cash also flow.

sequential EBITDA the changes operating cash in QX working XXXX. to to million and of QX timing QX million negative driven timing by operating change in improved is XX adjusted the changes flow working flow driven The flow by year-over-year $XX in operating in adjusted capital. XXXX compared EBITDA and the a Our $XX cash improvement in compared and of million is capital. improved with cash by Similarly, in a XXX improvement million XX million change

million, QX XXXX capital quarter. XXX compared mainly cash XX million facilities. expenditures, with X our QX from with expenditures and improve nominal QX million QX than free XX compared XXXX. flat are associated QX XXXX the million with lower are capital prior which building Our XX and flow improved negative office are million to out

stock-based of totaled model infrastructure shares ago. a we not XX, conversion, which shares in cash current XXXX on with year underlying free ended the cash billion plus strong EBITDA securities. adjusted to outstanding capital does outstanding scale. September million Our X.X and require flow We XXXX results compared continue marketable with to million investment, as XXXX Common awards quarter

year better million toward in in quarter was change quarter, the continue the change prior XXX generating Our make and the as The versus cash prior was free improved for negative flow. XX million cash than to XXX cash we million. progress

in We our of have a revenue growth number of model. drivers

trailing we and XX% XX% the revenue a year-over-year. XXX For X.X and are up million, was generated revenue of year-over-year increase of record quarter, sequentially billion, XX% XX-month an

from the XX% grew community year of America was users of Average to revenue the to In world, World prior over sequentially. were $X.XX, in and XXX of Our in daily and QX an and XXXX. XX% and with XX% active growth X% absence compared quarter. million QX of improvement of revenue events year-over-year user represented increased Countries X% down the to XX% there the QX Cup North outside prior XX% North rest one-time America as such quarter, compared and in XXXX. strong total Ramadan XXXX per had an

monetization, are achieving year-over-year terms XX% were increased strong we the XX% number advertising pricing of on Advertisers Total was a product return XXX% driving sequentially. of and active XX% our revenue down In on while growth. suite. and up spend, year-over-year expanded platform quarter, sequentially, this advertisers and impressions our high

have We always to on a that transitioned direct brand, response can model now service advertising soft and advertisers. successfully serve

costs of our exciting capabilities, new and content, XXX of increased and Infrastructure our an XXX partners including X% increase was million, sequentially. XX% Discover build a increase QX XX% growth revenue measurement premium of out Cost We an rate advertiser a and sequentially. revenue increase year-over-year revenue with will X% and of continue increase an our of an media to million, increase than sequentially. at year-over-year content. slower XX% own cost were improve XX% of and of platform year-over-year

This gross year-over-year profit and over declined XX% cost XX%. and our of quarter, and business a profitably. more sequentially revenue, XX% from model revenue, Gross XX%, of points sequentially. year-over-year basis engineering activity scale which to to unit from meaningfully quarter. offset by margins community over continues that XXXX operating higher to as than substantially, QX margin gross over points can efficiencies Cost basis improving prior XX%, XXX were and the improvements expanded percentage were demonstrate

and unit economics we the environment, efficiencies as over our operational driving improving of time. on cloud focused are multi We scale

from benefits infrastructure to The which model model along cloud time. adjusted opposed free and passed our expenditures, included result to innovation EBITDA Additionally, continuous in EBITDA technology, over costs cash higher should capital This our are from efficiencies, excluded EBITDA. are which customers partners’ investments as typically in are conversion cost over flow for time. in adjusted to

efficiencies sequentially compared term, economics. sequentially. were strong and quarter focused year-over-year remain XX% will in operating Operating growth XX% on and long Over XX% X% we of year-over-year up the million, the expenses down unit cost XXX to and revenue

operating focus to continue on business. productivity our cost We driving across

expenses We are XX% percentage about compared primarily sequentially. Operating expenses, related driven declined expenses. revenue, costs, two-thirds as our by and represent which cost to decline sequentially. related the which fixed operating year-over-year grew and employee prior costs, a also of employee of to slightly saw Our as leverage operating year and continued meaningfully

total QX year, again of XX% XX margin year-over-year and structure, Adjusted XXX quarter. was we million XX% which cost million growth the X% operating XXXX. the adjusted XXX quarter quarter. an the XX% XX Our the and in our to This in million prior in in adjusted revenue an of revenue increase below and significantly cost negative was the improved sequentially, to year-over-year an up versus improvement an was and increased leverage XX% consecutive second million, QX both over in includes XX% QX negative EBITDA Adjusted prior expenses well increase EBITDA, sequentially. of negative EBITDA over of had both prior periods. XXXX in quarter, negative compared QX XX% for with EBITDA increase

million, Finally, over primarily Monica. of our loss over XX million, operating the to year improved with QX we operating relocation charge in million quarter, lease prior this XX and a to XXX exit quarter. recorded loss the improved prior Santa connection Within XXX million

forward-looking substantial incurred XX mentioned continue. our now expectations uncertainty. With are subject statements fourth to as have to expect lease we of exit financial We October these momentum quarter, and to a the our reflect charges, QX. respect in of majority These

and the affected factors. maybe many start materially of results are mentioned call, our inherently by As unpredictable the at

a record XXX will Adjusted high QX million expected of between XX Revenue We and year-over-year. XXX is between expect XX% XXX negative grow reach expected in or be a quarter. QX and to negative to million EBITDA compared new million be negative between to XXXX. XXX is million million XX% and

goal Our stretch would stretch been helped the us get goal closer otherwise. output we QX in was and internal than breakeven have

adjusted We we're decline guidance accelerating in assumes among last quarter. are no our mark This investments, consecutive business sequentially. quarter, to settlements outlook restructurings expect acquisitions, or third although not our guidance, giving specific the concluded other in that assumes QX QX improvement legal DAU EBITDA. that of DAUs quarter will things Similar will

and our cash output stress ultimately free We're XXXX, the forecast of not a multi-year internal to stretch goal an investment. internal Bear our year flow quarter guidance. it's middle XXXX achieve forward process Looking mind and and an profitability. not and our this will currently and goal prioritizing us year opportunities that full acceleration strong us be growth planning internal That and is full move stress results said, of our will free revenue cash of profitability. flow helped to closer and in goal areas in

team creating and of optimistic are on about the potential for business. long-term the As in leverage long-term owners, our and we're scale focused shareholder value

engagement are which We will over profitability efficiency drive as for we enhance believe cost drive we operating operating user the flow and innovation as on experience, as At executing our we're community, generation time, growth. initiatives time. free revenue toward same well in cash investing

business. for move cash questions. as our open scale forward the line let’s about Forget and our With we up that, position

Operator

And today with first be will Sandler Ross questioner [Operator the Instructions] Barclays.

Mario Lu

that wondering, new to letter markets. tested What Android being Anything employees that reverse factors grow potentially that could Lu the the if had Mario will on Evan, far that suggest on in expect whether just rewrite, you last of your trend piggyback is for rewrite see global be would update it This you you and month, to the I us this a DAU it that the is or on give other rollout mushroom, factors? has Ross. Android growth call grow, to XXXX. an rewrite could thus mentioned confidence that you in DAUs just was internal in give handful of you Android in that, on the

Evan Spiegel

Hey, about there. code really Mario. what Mushroom. have Thanks work for the excited of to a do We still the We're project name we're seeing question. on bunch

will I have because sure think we the going us quality mean, innovate well. takes for that make really as application help I foundation we that the forward, right time. want quickly to also

we're So broadly. till seeing to roll and what get we excited we're right it before it wait about we going out there

growth DAU XX our best really at As in it we to of XX core expanding think about the US forward, I to is Europe. look the going think from way and

And to that have we so in order to from basically expand core, two do things.

have up grow marketing demographics and in which way then core we and a providing communications value product with markets especially XX We of value markets, plus markets, many close in is those world their also to our visually skew challenge that to of XX and more being around proposition of think a which view, for young. developing friends communicate and the XX rest actually our in audience, to we fast core

we’re So is with help the the our rebuild us. and make service that reduce of about improvements, going the there of should I growth significantly. how forward. will and challenge seeing think DAU then amount technical performance that about But Android or sorry to that redesign bandwidth we're the beyond that, we're uses so help continuing thinking that's what And

Operator

next today Deutsche Lloyd our will And Walmsley questioner Bank. be with

Greg Vlahakis

is quarter day, had but last day just this that you per you over the users billion snaps just Lloyd. growing billion quarter, now you Vlahakis snaps wondering, all is and are year-of-year. and per Q, X last was mentioned Greg three create on This that community X% all I for create saying X.X

base are do not count content. was second is and consuming more you or there watching this So that without all grow just necessarily really more growing creating why And question shows Is lot. wondering just, phenomenon Thanks. content the is feel and redesign you then the user people happening? your just spend can I it advertising a

Evan Spiegel

Yes.

hurt pretty happy that's the redesign. previously, at something our core redesign communications making redesign, So in the rebuild there we with think we're the did as with what create changes released that and we, we're Android I then to product we to Snap we've we're fell the was we significantly And when after ramping think, particular, those think to number, over I the iOS widely. as bring seeing and redesign I look made explained and we’re the going in progress that

about and least day. the So that at of of our over creating think snaps also remarks mentioned, our I user progress that's base every sort think how to in XX% is we

service, So, are but the platform the think we're exciting I is excited there about that lots of on and that and opportunities other what's experience. of the creation creation really we're content content seeing the course, drives projects shows around our on

to past a the about programmatic, ad as and we all So regards you've we're more move do ton focused year advertisers, to our to on expand all it over seen want room as a to of to really on our I of way people board only sorts there's and over problematic infrastructure. to thought in the to both. And then, advertisers, half, think, as products we self-serve world was that the

we've and the So there. of of focused on really advertisers base room been tons expanding

Operator

And next will today be RBC Capital Mahaney Mark Markets. with our questioner

Mark Mahaney

but Questions that in it's acceleration, what factors do guidance, Thank sequentially just growth why know, decline one. QX revenue XXXX, would will have not to this theoretically. in go DAUs in in cause the acceleration goal would of be decline then The I you. through, and just DAUs, with actually

Tim Stone

we XX as year excited app, the value DAU growing So, but time, community XX comes the about as in experience with in developed markets. but what not relates the XX markets, in improving the giving earlier, said. from olds developing decline Android any over think plus beyond user further not of of awareness we're mentioned are and community, grow also we increasing just to proposition, to the Evan to it the to the sequentially, commentary DAU, Expect was opportunity already abroad the

and are XXXX, And I’m build DAU for they’re So continue aware as breaking an in result as QX for results Snap QX Snap to that are about for that a have you with third and an I strong revenue with do toward not in internal to that talked are for nature but this to the suggesting grow over operating XXXX stretch cash a about they’re of and I of opportunity goal, the that and relates even think quarter us certainly there the time same aware, there, goals had free goal sure a the profitability to and to XXXX year-over-year users. of consecutive continuation year EBITDA, and QX, guidance. flow for emphasize our the in question, stretch expectation, growth your drive in not of example just forecast want and not as Ad seen internal momentum a it you accelerating and internal is goals, improvement that we improvement excited are we're they’re plan generation. you We and produced or EBITDA EBITDA you've forecast

monetization? community, been the goal the to growth advertisers innovate On and with engagement continue things the for about, and we've better on we more our what also the stretch growth measurement, improving front, accelerate optimization better relevance, as in for internal expanding would scenario, talking formats to So increasing advertisers. then cause example,

in community and the time. users to of engagement originals the viewers. the side, expand users shows has community the XX relevant our content, more over that and site time opportunity to over And XX On again before, the with on premium unique quality million engaging talked our the Snap all making in content and then monthly premium more redesign quantity we ever side, the how about than resulted content

see the we’ll and things So, we’d those factor things are play and revenue some growth out into over how wait have to of time. acceleration

Operator

Justin will of And Bank with the next today questioner Post America. be

Ryan Goodman

as couple to responding back talk advertisers core And revenue? that strategy the second so a envision sounds for comments, in how are you user as Ryan all term, if the it so can total the just is in about functionality, longer just still of app to Snapchat, time driver ads, mentioned focus how spent content. questions. as it Justin. evolving to with then to new premium and A prepared any one, communications speed quick just communications that's a is you like just Goodman the favorably, underlying you of relatively This One, you monetize non-skippable then engagement sense briefly impacting at one to the

Evan Spiegel

at product product, level, frequency think service one it's when talk the another and I of what is platforms the high and important to with high that as that growth basically communications really that communication. is friends engagement we understand what a So around build we've other about communicate communications then that drives core done

content that whether platform the So to product the our continue that's we and even that's our to memories, on or innovate whether maps products. of communication use generating business, revenue drive growth other

allows important So opportunities then having because is while that it other tools comes non-skippable, back most creative with think huge our lean build really experience, and non-skippable And the I thing for us a content quality important to the business. our just what well. also high communication content that and we really other communication for work monetize flow a these to we what creates see understand when was do to core that's businesses it's and to around reality, opportunity augmented communication flow so think I

been boarding the on to forward. on and more a that'll great introduce that is see really going us at really unit excited high with emerge commercials be about, opportunity we’ve and happy we and that's think great creators for shows, once that's I performing to creating So quality really, what creating we're thought which how was so content, lean focused we why I on back saw think shows, that behavior

Operator

And Jason questioner be will the Helfstein next today with Oppenheimer.

Jason Helfstein

near more be last are I addressed the side? So guess question, impacting to that you user content to of the what presumably there feel get on importance of kind in on need besides mushroom, versus addressed thoughts but and months performance issues curated any then curated touched on learned issues be in that other DAU. relate to And you've content I just mean get the of kind the few it, over wanted last could that you term that Android product in specifically the

Evan Spiegel

product bandwidth specifically, a of we I side, the a consumption. little one I improve bit do to lot On see mentioned earlier, room thing our think

from and huge year that One think as for we the the use customers communicate bandwidth which could product. they hear think I over we we a next of things to visually the opportunities we amount is of a that identified a reduce consumption, difference of bunch make bandwidth today have

premium on So side curated and it mushroom thing that’s user in to content, opportunity addition a seen as pertains the in then one content. huge versus seeing we’ve we're that to product

tools our middle, to forward, the for to is the at it so trying I One platform of a about very and content. I least to exclusive creators the friends for in broader figure is more announced, created build. best the content of to us, those exclusive content, ways of to and inherently invest premium And that also types them seeking business to group some both. you that to lot tools have, Snap content still how is think, for I friends which there's a to we’re tools that out we're and think, influencer think to help to and by for going room exclusive limited Snap a in group, then in We've important content And a is audience I think of small part mix. analytics be create think also the isn’t content because us and a of building is going

of are because sure all sort together, three well watching different people integrate those working different and on So the I like we're they things. buckets think making

Operator

today John will questioner with The Stifel. be Egbert next

John Egbert

as benefits also The time it a viewing and like way premium terms impact is this Is with I redesign tangible of brought any sounds some but were inventory? or content to quantify the traction available from having audience change there on in there impact spent either publisher to obviously challenges, if content well. the wondering advertising some was meaningful

Evan Spiegel

for our that similarly ultimately Yeah. the same but see created was the at kind opportunities the long We're We way difficult way term. change redesign business. the that we're about really programmatic has future thing redesign excited the for content investing our the the first, of and the to of right

for specifically you. that So I don't, I can't quantify

in and more we're can mobile earlier a remarks, that you certainly the we lot future. content premium mentioned about, just in opportunity quantify excited content. more we But are the for of there huge that's think people why for there's there's I and premium maybe that demand watching

made is we're one we've and what out lot of on of narrative about innovated video either now figure is the the of narrative things or excited television. shows, that been have mobile think and bunch for I for Internet a I mobile differently mobile the way seeing formats than how specifically trying to think structure iterated engagement, a for works of in much totally really resonates we're the videos content. made A because people with

Operator

next with will today Greenfield questioner BTIG. be The Rich

Rich Greenfield

were America. some you how think sounded main when Discover when much racy things. going like think very came growing users, separating pretty mentioned in product, about still you Discover content square problem, most challenge like things, we mentioned or coming two this out, over around the a at Evan, type advertisers you marketing don't now, of and prepared the drive I I I’m change the kind seems so to to it terms that number in realize much MAUs, and issue that broke your few think any North And disclosure make user standpoint, was your it can quick who Is advertising for on ever the on users XXX do of react a platform product click remarks harder a does drive and TNA wondering I'm it out making down and kind baity and you click bait further? up initially grow or how comment, that year in in and the a you're remember but the simplicity housekeeping being most elegance or guess time focused you they're it beauty discover, out see product the of focused release? users when that to had changes just from of sounds -- shows wondering very when have Two, kind of you throughout of you a to last content more launched just mature of first I be leaked product Tim, in know, that click. then you it Discover a to the meaningful to call, series, it do communications look the you that quarter? those that memo with promote and you changes. but and is platform seeing the not of I over I

Evan Spiegel

DAU as really we're on earlier growth two thinking I about call, think the in ways. mentioned I So

so the first on Android with rebuild. connectivity broadening improve Europe serve and XX you and in US the of plus issue. is the devices, We're predominantly XX to how a also the mentioned obviously can outside environments course customers thinking who comp also working on challenge the bandwidth mushroom we then low about that, and users, on US as consumption is those the and I in The days of people include and we're that to mentioned XX Europe, also, marketing product handling but all know better oftentimes, are we're our

So of bunch application. changing improvements as may or doing can XX we're for to otherwise changing I best that make, Europe that and outside Snapchatters. XX our there sure and are want involve of to market a US to we the features some especially well Obviously, serve product that we make the think

for I influencer what think improving of for for for stories as of lot to and product. official a lot lot of popular we that mix the think, There's yeah, of content. I right pertains you trying continue call a So, demand demand to get remains opportunity content. accounts. mentioned, content then to as There We're a premium still Discover, there's it

stories types are that way the for you and makes content and that enough start And a there layout of to separate sense so opportunities you now, think that identified think all improve that personalized that experience. users one blended I I right is for are cold problems together of different out feed those and potentially in

come definitely redesign it that like that's get just And first it when you but released for working this look the a we're personalized So on, what over we you does problem into year. does the service time? and how

just beginning premium improving terrific think really created a unequivocally, the it's business, expand to this but but really our of opportunity So content, I I into content as stores. also popular view

Tim Stone

Tim. it’s Rich, And

question, MAU the and we quarter. US case. and shared Canada, you was we we on MAU spot over in XXX over made last million It’s to the the million not said, shared that share a On XXX – something remains intend metric that regular and the as basis

Operator

Thill will with next And today our Brent questioner Jefferies. be

Unidentified Analyst

on for Brent. is [indiscernible] This

you of your then transacted you XX% being just You noted self-service, noted percentage might up following think remarks you that, that in also crossed down you of auction more those prepared us as being expect XX% seeing what sequentially you competitiveness change quarter, in get the do auctions last after you’re in how could through as X% that start pricing curious of on a revenue revenue. And through walk to of you advertisers, overtime? and plateau when maybe about that down terms to dynamics

Evan Spiegel

really quarters, down, to that there. is doing I we’re people against over for a a as to we’re you much about do And a which conversion continue better has how coming helping transition pricing mentioned effectively but pretty couple lot XX% important of sorts then all with the and We’ll bid events when at there, feel of to programmatic, bit much exciting optimizing, job we’re now, transition talk us. we objectives. that think like little we’re So think I we next of

think drive optimization advertisers, to I increasing better continue while be revenue still for get over to as overall. those we further down pricing able hopefully, time, So, even we’ll

Operator

And be Mark will the Nomura. with next questioner Kelley today

Mark Kelley

results in We’ve that on not you second, early when in as heard that the using needs? in ROI getting they works advertisers the the some curious terms their use And feedback any of SDK. kind of it’s to capital think advertisers Thanks. just you thoughts if directives the especially similar right positive given from are they’re now, do tailored I’m pixel things. EU side of cost have then see the

Evan Spiegel

the at we now right really on of about pixel, getting which the As look focused is early pixel, widely. it the stages adopted really we’re

observes. do the events that outcome progress job pixel. overtime, pixel great overtime, advertisers we on be for this there and time then a We’re we’ll bidding making the to then a e thoughts against the conversion should per Directive. And those no then cost lower at able using And see better

Operator

And with our Brian will Pivotal be Research. questioner last Wieser today for

Brian Wieser

additions, or the any us can give and gross a be if that factor on wondering trends characterization talk extent was is wondering you provide I a you any you if could that bit to can net how trending? churn versus just on about color might additions

Evan Spiegel

or users guidance about on but give we’re was able any not that tell couldn’t I churn. to advertisers,

Operator

earnings may And today’s session XXXX you for the Inc.’s Snap, question-and-answer attending you disconnect third as quarter now Thank will conference your session conclude this as call. well lines. and

Snap (SNAP) 25 Oct 182018 Q3 Earnings call transcript