SNAP - Earnings call transcript Q1 2024

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Operator

Good afternoon, everyone, and welcome to snap Inc's First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to David Ometer Head of Investor Relations.

David Ometer

Thank you, and good afternoon, everyone. Welcome to Snap's First Quarter 2024 Earnings Conference Call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder; and Derek Andersen, Chief Financial Officer. Please refer to our Investor Relations website at investors.snap.com to find today's press release, slides, investor letter and investor presentation. forward-looking today. are includes assumptions on call of as conference statements, based which our This may materially to results and Actual differ we forward-looking in make statements, these no obligation update disclosures. from our those expressed

titled XX-K information in risks materially these Factors. press described most differ Risk release in more results to today the issued Form please from about cause our forward-looking may For actual or that as particularly to we refer section statements, Form XX-Q, the factors well recent as

Today's be press items. non-GAAP understand Please we X SEC call. note call expense GAAP Reconciliations to with payroll measures. the we on metrics filings how compensation and when refer stock-based our related as will depreciation taxes and include other found both figures, between and the our to exclude they discuss that any as release. today's can all discussed of today's well of will calculate in the Please amortization certain and

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

Evan Spiegel

have Hi, so our fruit. strategic business. many our our serving thank efforts progress on long-term capitalize of to by the bear to making excited we momentum is are our joining share and beginning our and the team gratifying members I'm it for everyone, deeply and dedication put on partners, of inspired efforts us. you and are into building our the the potential we community to to and priorities I'm see all

be investor earnings detail X their more open diversifying we is and important to diversifying committed priority hear priorities: strategic our the most letter, call. Derek. and developments growth. growth, you'll deepening in key growing our set We in executing with and from revenue we'll going our XXXX accelerating on observations forward, out our context leading direction strategic financial engagement full and augmented remain and call some also but On today, The about giving and I'll our community The reality. accelerating against our revenue strategic for then is

to growing advertising an points We year the operating in our while rate, also an was made significant environment. have benefiting revenue an to and the XX demand we of percentage for growth prior acceleration which quarter improvements have platform improved progress driven with over our advertising made by year-over-year, increase the start XX% from of impact solutions

Our audience, on valuable and large the a environment our and continued advertising that to brand-safe next businesses have made for hard-to-reach innovation progress want reach us platform partner generation.

continues with and services friends, Our second family their innovative relationships and of people's that global the the designing strategic growth products enhance priority, our world to community. drive

reached an QX, we XXX daily million increase or of XX% million active users, year-over-year. In XX

engagement our globally watching time continue content growing with broaden and We to content and the viewers spent platform total of number deepen with year-over-year.

family friends on XX% focus and with XX than visual more the Our enabled reach between advantage year strategic market. XX% advertising of is of to countries more in global over a that olds to than countries representing these XX has communication us XX

the drive engagement of what on platform. are Relationships depth our

most. compared that that to we happier Snapchatters of the Snapchatters to and Over use And #X ensure way increase of these comfortable, our other on community. of helps they with daily our on or is the is new focused helping members to healthier ranked Snapchat. matter feel of engaged they lead enhance is XX% out relationships particularly usage as relationships on when year, Snapchatters resurrected say and Our and and connected Snapchat close simplest apps. X with increased a better. platform relationships happier people active and feel simultaneously goal for X lightly dramatically days X X our Snapchat cohorts build while who happy the active just are number Snapchat friends believe leading These building community. platform. the to of platform connecting happiest relationships when This to

transition We've optimizing advertising spend hard to order ways in their new year-over-year. partners been pixel our by more to ROS. XX to optimization platform to model QX, advertising purchase-related XX% of purchase working momentum helping measuring and our in improve In provide a our improved conversions with increase led ongoing than

promote by In seeing products content reach or small- addition, medium-sized we're medium-sized and Today, small- creators we progress partners. are advertising and and the can with our their businesses excited and services, new which SMB taps Sam of significantly within year-over-year. the in has accelerating on application instrumental audiences, all the few XX% a SnapChat, increased just advertisers been number with chat -- this

deliberate forward, cost profitability path we've with flow. EBITDA cash to the and free positive meaningful have As we a adjusted taken structure our look actions cleared

We have and cloud year in infrastructure invested performance over in engagement products our order platform. past improve the advertising on of to heavily the deepen our

calibrate the inputs operating to continue momentum performance. fulfilling build financial record critical vision improved of to our strategic investments our track to in that are strong This priority. innovation also while realizing is a will We overlaid necessary We third computing world. leverage financial forward and the ensure this our on believe of carefully foundation drive moving we on

We computing have digital augmented as way daily in the world in transforming seamlessly profound use around our never we lives. meaningful worked reality. service enables and experiences AR us us, anything on as the to

average, services augmented are today. scale XXX and single over on driving engage every major reality products On Snapchat. impact people at million day AR with Our

and rapidly. community AR with of on of using lenses millions average, large with software. AR times strong believe which the well in one flow and cameras ever per over community has Having vision world's X the of world to believe advancements growing plays creator vibrant augmented lenses continues day innovative and our community Lens our Studio our AR billions meaningful We us and that positions growing a will decade sheet large last achieve a has lead our the has that engaged built and tools audience and us most Our developing most balance a an creator position innovate reality creator to used positive AR develop technology This allowed and long-term of by leveraging evolve highly the engaging cash enables free community, advanced ecosystem. service us computing augmented to be and to for seen. we that a unique reality,

the I'd call to like financials. to speak that, With to Derek turn over about our

Derek Andersen

Thanks, Evan, and good afternoon, everyone.

grew revenue generate advertisers improved X% grew growth demand ROAS as our translate in from quickly we environment. revenue in into increased XX% grew and Response, Direct structure year-over-year driven the an brand-oriented expectations accelerating percentage cost to of QX quarter, for and began demand XX in segment, year-over-year XX% EBITDA up year-over-year by takeover revenue, as For exceeded enabled revenue DR QX, year-over-year. billion, quarter prior for products result driven in active portion our XX% leverage. greater demand $X.XXX up year-over-year, first see advertising advertising improved in The increased point an us on strong our operating advertisers, by ad revenue and adjusted our XX% particular, advertising with in the QX advertising solutions platform. which XX% of improved this and partners, advertising operating in QX. increased the to medium-sized for that small- to acceleration or a our

and up We million year-over-year other also a year-over-year. revenue $X sources perspective, consists revenue entirely reach continue revenue $XX diversifying Snapchats acceleration QX, regions with brand-related subscribers to tripling Snapchat to and we regional in make in almost DR growth in XXX% revenue. towards topped our more nonadvertising includes From Other advertising across subscription QX. than revenue observed million. all both of progress revenue all

regions Middle more prior was significantly World in current in the impacted by rate total holiday in highest see to of war pleased and of quarter in XX by particularly season were rate. Ramadan revenue the grew QX Rest Brand-oriented QX QX, growth have advertising in to strong the of in translate XX% were amplified the as accelerated growth further observed We in in platform our timing revenue the of growth the made demand driven improvements percentage over Rest the QX We year-over-year an America, during the in into North of which in part demand the pace where ad relatively the to at faster revenue by points seasonal year. holiday, and a World Europe acceleration improved we shifting of prior acceleration these quarter. East

efficiency were of Total that adjusted million largest large and infrastructure in QX and and was revenue of improve AI relatively improvements. driver our costs in cost investment year. we driven a the platform of implemented QX unit across investments XXXX we QX increase The content through was and in the engagement support in of and of of XXXX, to ML $XXX year-over-year the Infrastructure ML cloud level engineering to XX% and ramp stable up of our DR in and AI combination costs QX continued by year-over-year. the QX, have pricing part prior

higher-than-average credits provider from in benefited to that we service addition, QX in reduce costs further infrastructure QX. In helped

a of cost DAU XXXX. declined in from to $X.XX result, QX As XXXX in per infrastructure QX of $X.XX

decline sequential year-over-year. $XXX QX XX% $XXX revenue, investments of quarter accelerating year, QX reflects by in to offset of seasonally decline X% XX% initiatives. in of prior by in QX and were in including -- of in advertising The X% the to ramp the size full-time prior lower QX. Personnel impact margin reductions QX, million in in the operating primarily is Adjusted by QX content, in XX% which Adjusted adjusted year-over-year in of XX% year-over-year revenue, partially decline the regular restructuring and XX% personnel offset and year. The year. QX, components in increased costs adjusted began partner gross compared prior result driven expenses per a in in developer, margin cost QX growth adjusted costs infrastructure of prior offset in million from infrastructure leverage in higher operating margin employee, partially by costs remaining the to up other by XX% which DAU was was quarter-over-quarter were and entirely higher partially and revenue QX compared the the the as up quarter costs compared the driven gross that or team prior gross in was per to revenue

and in million $X of growth both higher reflecting year. loss million and million QX cost and in implemented The headcount GAAP EBITDA average well down QX, past We in or count down related $XX with X% refresh the transition year-over-year. adjusted of head million the expenses, a the $XX in of XXXX. the quarter. of year-over-year structure. million quarter, on prior Adjusted was X% grants QX in which million was QX $XXX improvement flow-through related in the compensation fully of and a the and in of our from year-over-year impact Net from accounting prior restructuring accelerating recent loss count, largest headcount a count dissipated $XX in SBC, a our QX year-over-year SBC to stock-based prior or ended We of in followed in X,XXX in basis X.X% head restructuring was decline as as in the XX% of year, in in offset full-time as to of the partially decline revenue result by operating by net has expense The This growth the reduction on X.X% expense EBITDA restructuring. now peak costs throughout mid-QX compared down SBC in discipline. of from the from initiatives. the up driver resulting the $XXX reflects our reduced QX, share Dilution QX was phases was impact

QX a count, price part opportunistically our of million $XX.XX. repurchased in QX. share share our SBC of cost to Since the million began As we of average XXXX. managing reflecting repurchases $XXX through in share manage an at repurchase our we shares XX responsibly count impact on efforts of of

meaningful million XXX representing flow. million of our shares continued strategically positive average share shares, diluted we to $X.X flow sustained a $XX QX, cash drive prioritize repurchased per of $X.XX in total X% outstanding price free fully billion. at have We cash investments and to as cost was an of Free

securities hand. We cash billion ended QX and with on marketable $X.X in

below we of the maturing QX, risk in Through addition, prices million the repurchased reduced convertible years future have dilution eliminating at XXXX outstanding also the value. the of ahead, outstanding we and par convertible $XXX million further In level of transactions, of while convertible in repurchased $XXX our from debt these our notes XXXX notes. notes

anticipate We global is the million and outlook. continued community to QX will Turning be of that our guidance assumption on our built approximately growth DAU in our $XXX QX.

would revenue X experienced deceleration including year-over-year due rate billion, range And XX%. further in in Ramadan growth acceleration to percentage a which point guidance and billion, revenue quarter-over-quarter of in the season represent headwind percentage in changes and the attribute of XXXX. XX% QX $X.XXX we point year This Our to point implying year revenue a to to impact day in X timing for the the QX X in shifting the growth to toward estimated prior QX. X compared growth percentage of is of $X.XXX holiday the QX seasonality factors, the leap current to

Our include in QX on our of in our the investment sustain cost as and impact momentum we have for regulatory well an incremental plans structure. and legal marketing infrastructure, increasing modest investments burden to business. established personnel as the

in $XX ahead, estimate and revenue that the the will adjusted we Given million for and plans between range above quarter EBITDA be our million QX. $XX investment

cost productive structure. estimated year it structure provide XXXX believe insights forward-looking have our made and to into to significant our optimize be cost We will progress full

currently estimate DAU that the of $X.XX infrastructure XXXX. cost $X.XX per quarterly the in be for range will We remainder to

continue investment levels our the our assess best will business. of in We based to what interest infrastructure on long-term is

remaining relatively a stable range is of the of as costs partner We as and which costs a percentage to at expect content remain we and well components developer XX% have partner as of revenue, other of over to quarters. revenue, reported the the within including advertising trailing X revenue. combined XX% cost

We the growth. adjusted adjusted opportunity to productively grow rates prudently invest the we And we we see headcount through half that of to higher costs to that billion. as modestly this $X.XXX XXXX, range. operating anticipate expenses limited expenses personnel currently We billion and in sustain of will second XXXX, full $X.XX approximately revenue are if growth resulting year reduce below into operating able of to will support move

of through billion full SBC, XXXX, $X.X estimated modest to year sequential $X.XX in an we we expense as move billion. anticipate For growth resulting SBC

that, With back it I'll remarks. Evan to kick for closing

Evan Spiegel

Thanks, Derek.

the on ROAS community investing for measurable in execute our diversify products, to new quarters advertising ahead, and focused and line with continue we business response remain of to responsible direct deliver our we As innovative top serving our sources our in growth cultivating advertising augmented reality. profitability partners, revenue future most on meaningful out includes sustained and and the strategic our The our to products, investment prudently levels on free deliver to input we scaling is laid these initiatives and innovating positive critical cash delivering That flow. our platform innovation. of to

We last this and XX track our record the our us investors. well our deliver positions over believe of demonstrated that to years innovation for on partners community, our

While this be there is lot work to pleased in results still a translated done, we has are focus improved QX. of that into

now session. Q&A our begin will We

Operator

from [Operator with first Our Instructions] comes Doug Anmuth JPMorgan. question

Douglas Anmuth

the guiding then well. you 'XX? you how of to decel of maybe And but drivers the acceleration things, you're help kind drivers listed Can you slight of in the and you the that if prioritize just us number through and us comment help just think just understand quarter second of frame progression and could a just And on XQ? the linearity kind in as about DR

Derek Andersen

the Doug, question. it's for Derek. Thanks

I would is at outset, the the say first think, top top on just acceleration was I broad-based takeaway line look, the probably that or important theme the most how the line. results of

regions mentioned specifically, and X DR X of brand our we You see quarter. but did all the those in pillars each across accelerate of NDR

over quickly, quite active advertisers, or customer also up We $X then grew also the XX%. to tripling base business the more that subs at SMB year-over-year million. are And also saw looking Snapchats they

line. So really improvement see a the we broad-based top did in

progress to we of And than of map notes privacy then investments the DR we've infrastructure and some there. that. purchase the expanding business a increase models our their with of install a there made half think with optimization in for you optimization more in just goals particular in more you've increase some example, conversions number around, market year, the more And momentum, larger rollout last really the DR them on of ranking saw investments signals of CAP say, more to help for And frequently. revenue. adoption purchase-related now refreshing and we models the leveraging that have side, coverage XXX% more optimization and really making to in led of over making we've And seen the one, than XX we're made we purchase pixel approximately incorporate and in the I there those line the continuing there. seen on to to road QX. in evolve improve in XX% on making bills app lot improvements a that that been our addressable good probably On of additional on app XX and QX and coming signals of significant specifically, year-over-year

So channel to there's saw in progress rollouts. improved in think this QX a of the the you many that checks the of in you advertising about up seeing starting that front. in And hear community. I that now quarter. can in up return I think show We're your on were you lot demand rollouts that And on see in even showing

that So now. taken and of business together, success those that I are much, if that basis. DR think better points the of customer to base that is sort the return-based are Ras-based that you things of each each speaks proof And performing much durability those of

points unique DR percentage then So quarter-over-quarter, from we particular, QX relative comps the items factors that couple notably, do but the we're in a did And there's QX little. do One the into holiday rate of an made the seasonality. to have transitions growth day QX to about as year a business of some year those growth this in the contributed to Ramadan this in of season, really contributes year in the letter. we continue we in as year contributes about improvement to as seeing. so the timing some well the in rate to to the have just X we've speaking you of pointed improvement a this of the further and there, asked we last the prior QX into that bit so the little QX, factors transition none of unique seasonality some the that the to that progress of year, higher expect but and that more growth business I fundamentals QX leap transition in the on moving the with to

hopefully, little a So what the gives on line the business. you momentum a that seeing and that of of established bit sense that we're of we've

Operator

Our next question with comes from Wells Ken Gawrelski Fargo.

Kenneth Gawrelski

you talk Evan were Derek, in what's America fourth discussed I about you on shift future XQ, XQ but DAUs maybe a grow at North the call, in quarter-over-quarter the EMEA. the and to in progress in early any company Can America resources maybe for XQ DAUs, know please? North incorporated engagement that beyond quarter early earnings flat any thoughts America and on and early look and growth North and

Evan Spiegel

are Snapchat be friends with about devices. using as their who on This certainly It's iOS. resourcing Europe. North developing in are we who some is more been it different before a and to may typically America and typically on as often Yes, have on and Android users Ken. those not and of new Historically, users growth and more users on Thanks, focusing reengagement downloaded focus have really more we were shifting our who opportunity of set. focused markets

overall opportunity experience. opportunity And say in our explorations, product of early a set lot improve finding different. that I'd is we're to the So

to been to has trends month-over-month growth the North So to month and -- in been February positive. April constructive near-term from date March pretty March have America.

but for of improve making we America It and seeing to Europe. here. community are eager we're and So lot opportunity product our a North the early, in progress is

Operator

Greenfield Our next Partners. Rich from question with comes LightShed

Richard Greenfield

the aggressively the when on if calling quarters, flattish. but relatively Look, grow platform look was spotlight But sort spent feels I time key it as relative where growth. time versus do spotlights a guess it's couple content are seems time unify are realize How Yes, momentum. spotlight. but at watching you spent It today you tick landscape, as creator with think I of the the so versus platform? to spotlights have like -- America the spent investing shift you choices just it share you last spotlight? -- of was think -- growing, up, like similar? a the look evaluate signaled you Evan, you how keep feed, globally, to unlocking the or I especially important. could the is on like it's about it feels exact, across but out I experience. similar real on or spotlight And meaningful talk I you And the North consumers how stores short not take you basis And

Evan Spiegel

at as Yes, been terms spotlight in bright spent. look and we creator Thanks, of time stores, definitely spots Rich. they've

in you simplify the mentioned, really we terms user perspective. of are to and the unify As working both experience,

haven't So share X enable we ranking signals really the unified and which to feed of stack, content, us stories just but to going historically. is between signal which spotlight, done also engagement

think content overall. we experience at say making personalize our we X improve topical. from feel and will really in the is community, that the looking more really where area the So can timely feedback I'd help

about Snapchat. that a snaps because surfacing given a they're every moment. that corresponding well signals trending, a But have our good are day people we of making as that in, on great from content very things We have in lot interested also things the haven't done community are of billions job we

to from overall. are spending great or spotlight a there's be experience people topical, creator time. journey growing with to really then grow sure think That work of over that a content great I So and done XXX business make creating and build discovered and stories following can lot journey timely we're friends using to on millions. our focus content more communicate be Snapchat ultimately and of feel then to making And that following a the

working well. big as away a for us, at been a that's and focus we're Certainly, big So it. opportunity

Operator

Barclays. with Ross Sandler from comes question Next

Ross Sandler

Yes.

of sounds within DR install the like it category... just category remind the app that the upgrading us back kind or you business. like Can app how you're in day, So big transaction revamping

Operator

Ross. connection lost with

question James next from today Jefferies. comes Our Heaney with

James Heaney

to Over to advertiser advertisers point of older grow at the what advertiser spend count propensity And Can and looks starts do what about you guys more SMB you this your just quarters, to cohort clip. feel continued few pretty to a their cohorts? at relative talk become material. you've newer healthy your revenue like like last

Derek Andersen

Thanks.

I to that's segment think start, I customers broadening here, exciting base newer to we're a really growing the of overall out and think of advertisers.

So I shared year-over-year question seeing we've so medium-sized journey. earlier segment a the overall, it and on broadening small base another to base of And customer being you're in exciting. There's response is seen I very the of the fastest-growing customer a think to up count and that -- advertiser advertisers. that active XX% the

of And more to to those bid to privacy that and going being and models and more initial the in advertisers of able them the They then our and better expand these and see course, to at and ranking, those into products go ability roots get you're to safe signals customers. models performant. then give and in self-serve X think bigger continue their performance scaled products grow coming better terms I become better budget. with we deliver optimization bring optimize. and to of platform, invest on through testing seeing as some

think do I a journey there's here. So

because the be to the customer of kind grow medium-sized term, ingredient critical I think what's can customer potential us of platform business. that reaching absolutely an base and small that long is help to see results full base monetization really the going exciting over delivering to ad the the is the

So that advertisers lot of off more to a to helping that to of do journey. helps. Hopefully, through a continue good these start work context and

Operator

from question with Morris next Michael comes Guggenheim. Our

Michael Morris

more connecting Wanted about technology level you certainly the you your you how to about you players your increasing in you investment infrastructure. currently, companies Can competitive their to just X and conversions, with Derek, could size years? Large in growth you is. of about CAP whether Can the artificial coming ask numbers to what your for And to what think it that be intelligence and those ask those? customer engaged very you and to spending purchase audience. acceleration continue it follow-up in the And just think the that's just scale are investment. that of if and about talk revenue where of can in takes the shared and larger that investment on get reported takes revenue ahead large, about with relative your statistics, talk in sufficient? far And quarters sector your drive and base are I integrations

Derek Andersen

invest quarter AI around to the we stable investment that to those the range year scale scope up and in to full on We've a there. up given more investments, were the to the the and that, XX% I and remaining our we a starting ourselves and shared in Number Dow, room Obviously, infrastructure can shared for start last -- up we larger then X relatively the QX of going year. QX places. the And stepping see one, of you're that over investments show spending quarters. last year. in ML of last really QX with infrastructure couple million in quarters of scaled from year into $X.XX range of about infrastructure $XXX XX%

expense I I it's investment on in investing think put the a important than CapEx, -- things a couple to we're just would there's that to a say, the spend underlying as But two, operating there's ongoing that on through revenue. CapEx relative multiplier up cost of an cloud model that's a different One is as important represents. perspective. showing cost it rather of running infrastructure our

currently that. is capital multiples millions of might infrastructure on spending So of of underlying this a be while we year type the hundreds

have So is to, the obviously models larger. scale access our of much, the to infrastructure that much we run

on that accelerating seeing investment profitably is you're the points those how QX that And paying in returns think investments off addition on and of to platform the in think made not and thing us in DR important to results really are the investment the we've contributing are in business. to that business term, infrastructure over time. that scale whether that and and in access significant to that's growth particular, positive to long ad it's the ideally engagement the continue are that the or so capacity. in the seeing investments scale I and side, I able business for revenue a that's going And our here lot second And be those giving to on going to grow that what allow we're seen the continue ROI position to to perhaps proof most business see like over we to have on continue

gives that a to little with of we're going that pleased made room and how scale you to those investments we've continue on that. getting hopefully, perspective back. that been really to thinking date, and we're data based on the them, bit we'll of ROI We've reassess So continue do to the to we're of

On really we're integrations, mentioned of CAP at up the on that the coverage I'd DR are year-over-year. momentum coverage your there. ad pleased that Xx, XX% integrations XXX% our those second question about demand-weighted related and with looking seen we've revenue to we're about

getting that adopted our So advertising obviously, good DR across momentum in customer base.

on achieve. the the said customers our And to business is in the think, helping I for getting objectives solution to have here question, to the important, going trying to really prior people as the forward them adopt the so insulating they're recipe answer getting and measurable I advertising results. And to right board,

small- to to advertisers product we right are their advertising targeted grow position based that's in And is people recommendations meet are a a about recommend the contributing them platform. to which on that and offers business, providing business to for their that medium-sized puts proof customers. results, scaled, self-served what a and invest to on on know point improved adopt more those them seeing able good we much objectives, in our way, ROAs their and being

think to the seeing terms on in the that to know I you the advertiser XX% So customer there a progress people into that's actual let in the recipe integrations, these addition on advertisers scale of turning flywheel and we base shared -- segment base. in growth us in that that it's active making

there path see going. how and context of we that So Hopefully, bit you a little that's the what more gives as

Operator

Our from next question Black Benjamin Deutsche comes of Bank.

Benjamin Black

that there? more optimization? risk to talk bit you in meaningful business map have the XX of months any app perhaps build-out the you a value progress your app disruption is the How install the XX there product Can you're that are Great. excited about over of little other initiatives some road the next broadly, that -- more to on . And of be what could about?

Evan Spiegel

much Thanks Yes. the so for question.

our app thing the model models, been lately for and last these just non-scan. app we've We, scan both biggest I so, side, the have On on in install is guess, or week working updated updates. the landing

far. So products app great. and that's so now XX testing. but install And our we promising very been early, have been results in have It's purchase the XX

We that also scan customers. new introducing our offering a have just we're to

their see feedback that have already. get excited So how number a testing to we'll of be performance, and can their we improve and that customers

and our on optimization then We've focused will piece. just more on CPIs really think optimization the be we'll much advertising And value installs more been partners. at I for value follow. lower working driving click-through

just much at interactions running signals in advertising Derek of have the broadly on course, ad unified the think progress, mentioned, formats. larger a I and platform, the lot as ad well models, looking made as we of

been looking progress ahead, advertisers product things product. we've selection working SMB help is think product We've on of cold to which been of at start, for I for things dynamic especially levels find lower success. relevant our ads spend them with like making sort like

a now, foundation been progress. able work rapid we've I we're a lot to think do, solid So some there's to on and make very but more building

Operator

Shmulik Our next question comes Bernstein. with from Mark

Mark Shmulik

I if A couple, may.

first Snap and well growing it's to really like quite just engagement. Stars. contributing It The sounds on

and about kind Snap we onboarding of it think think in connections more about spotlight with wanted people friends stars, philosophy does like engagement long-term of do as out broadcast fit we more how Just you more the to care balancing ask media how kind deepening the strategy of family with that about?

ad verticals market, mix second just Derek. Any the share on of can kind certain coming you've the back then And vertical others. about you the just others color recovery for than the question seen? digital just heard quicker We've of from

Evan Spiegel

for content Snap close relationships and much relationship Yes, friends really I hear about their really we is our those be And most with be it as also family, look Snapshot, with on of so but the question. your Thanks we X build can love relationships feedback the from relationships. able in that's could the successful think on why that And Snapchat the the to investing well Stars. with they as is audience Snapstars unparalleled. they're they have the engagement And reasons at platform.

travel, mostly we're so focus investing of countries, Snapstars out look Star is program, of the lot in interests. content. food interest. under-indexed build geographies can today, Snap where things. at of looking in language content at we at We're local around sort I'd Snapstars there we That those scaling As or the say looking create be could also more around their A sports, sorts

at really they're and we on up that looking geographies our for. this and of where so interest with And looking intersection really the up as have Stars we're and Snap well with what community the lining

consumption yes, are that's drive your to do would that our relationships So our an say of on why content part and important overall, I point, Snapstars such offering. really service,

Derek Andersen

in color we're operating in that see through be in generally broad Sorry, and into QX number East went improvement the think the certain we terms the of impacted in where verticals operating the one, environment as seen we've and the we Middle to environment seeing regions did war fairly the by on particularly QX, I QX.

well. think course, But fit. improve a demand, of the about quarter-over-quarter. in it's of brand And saw so out as a all really broadly, DR I mentioned we QX. perspective, robust that really much in And front optimization we've with then certainly which that played seen And purchase environment on working from regions and we restaurants our more broaden we we've think travel wider as scaled I broadly start other to well. self-serve SMB out really SMBs a seen of be CPG And really these to that to optimizations of verticals. to address verticals able set excited and such out-based working e-commerce and introduce is as customers is and product what about the more in letter, we're more

better the for much you a So question. sure. in for QX environment Thank

Operator

New Salmon last question Street Research. Our from comes Dan with

Daniel Salmon

hear you me, okay? Can

Evan Spiegel

Yes, we can.

Daniel Salmon

Okay. Good.

about that. Sorry

Derek, like throughout for is of there expect with all then questions. not that go can Or we growth XX%. and Amazon growth partners the you partnership or can advertiser could bring level second type can And at demand? SMB something early significant X that -- consider to and the I'm learnings in acceleration. onetime curious, or incremental you'd ad whether back just just year. of Evan, your be I Google the Was ad both from mean any Amazon cloud that's after more that? partners interesting. So

Evan Spiegel

still the know that people an shop be and relevant products exciting for Yes, is they is We Dan. content and doing great Amazon with out opportunity so partnership exciting what's look selection It's think and to Handshake, shoppers do to as we at able a Amazon now to relevant experience. people I line allow inside tap Snapchat in very product learning being development. what early, to but offer able X check us. think where bring product I consume they're with to certainly that's a

been these with think there we continued we've demand learn and partners some done to continue opportunity of elements I growth, separately obviously we'll our there. partnerships we've So just that see other and do ad and of done work have important product. do that evolve

Derek Andersen

building a business Dan, time. hope on will growth very active And early on for the the is I question I advertisers agree. a important that we in big we're obviously mean, the really would about going. be what SMB, over us input to

and a as how about SMB lot we a both going And market lot to here able in to have terms set. of wider think of easier So funnels, optimizations set from ability are appeal for audience I raws more advertisers of well to and a we're product trial fit time process it that that awareness in wider to use whether and the opportunity there's are learning onboarding these over integration as work our these an to scaling onboard acquisition that's through for partners discovery and to as to to help partners. the make delivering to

there, So progress on as go going the and about it's we to we're seeing in but we're something early so far, build we'll that the hope excited forward.

gives that thinking Hopefully, it. you So about

Operator

This Q&A concludes as our Inc. Snap as session well

session. all you Conference XXXX Thank Call. Earnings Quarter for attending today's First

You may now disconnect.

Snap (SNAP) 25 Apr 242024 Q1 Earnings call transcript