SNAP - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon, everyone and welcome.

David Ometer

Please refer to our Investor Relations website at investor.snap.com to find today's press release, slides, investor letter and investor presentation. This conference call includes forward-looking statements, which are based on our assumptions as of 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 these forward-looking statements, please refer to the press release we issued today as well as risks described in our most recent Form 10-K or Form 10-Q particularly in the section titled Risk Factors.

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

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

Evan Spiegel

for daily QX everyone, as and active for you more billion an users. XXX we to Snap Hi, on monthly milestone than joining our reached X path marked users important call. goal and active thank million the of active our monthly XXX users million

enabled to on XX% between Our visual us year is XX friends serve communication a more in . of family countries. than over that XX XX focus and to olds has strategic advantage

Chat As approximately are of Snapchatters has community us with our age and Snap has XX% XX. the grown, above grown of

to content engagement viewers growing and continued content and time global We deepen year-over-year XX% global content watching year-over-year. spent with platform QX with XX% also broaden growing in and our

discretionary a the The brand business of contributed community, growth we and progress made our weaker for our growth of million verticals. revenue consumer of to the direct more business of advertising advertising Snapchat+ despite the with subscription than reaches impact that response all now have XX our success subscribers, certain year-over-year XX% environment

year-over-year investing and our with the our our advertisers, total offering. pleased revenue strategy active with in diversifying the made direct our number our as community the doubled progress response continued more are We in well progress this QX. than and which focusing business of growth believe products in DR validates on ongoing We rapid growth as subscription of our advertising growing in engagement,

combination of our flow. improvement The as us and profitability top to sets EBITDA million for translated EBITDA a the have expense the up and free In and to cash positive in actions progress progresses. to have cleared well structure discipline taken leverage year meaningful QX, we $XX cost adjusted operating optimize path adjusted of line continued

Adjusted incremental QX, XX% flowed was from of in EBITDA share that or EBITDA year-over-year adjusted to in up through QX. XX% flow-through the revenue

our we will this ensure the carefully continue to forward, drive Moving leverage to improved momentum calibrate financial build necessary investments also on performance. we to operating realizing while

the Snapchat the for long-term us We financial position our foundation and experience. are track fulfill Visual well believe strong we augmented building vision our record the of core to of is at reality. that communication innovation

engagement and Our active drive improving world. growth strategy way their daily user communicate and the to friends, with interact family the is Snapchatters focused and on

We of in new have enhancements this delivered months strategic number on experience features execute and to initiative. recent communication a user

favorite that map conversations. enable the to reactions we friends For example, to QX, send in map Snap on emojis introduced their Snapchatters to start

editable X reminder eye launched which a also upcoming up ask to deadline. edit that sending Snapchatters allows reminders to for give the chats, for an And My minutes ability for We Snapchatters after them. messages to

latency app screen quality. iOS to making performance to and by battery we addition, In enhance management, and are app loading investing improvements camera

every contributed active We users to the daily input an are and experiences. Snaps important deliver connections region, engagement. engaging to Generative learning for community in is AI improvements meaningful These of daily also to sustain number which help leveraging our machine have product all-time and sending to in highs

of as but to $XX than an increase communicate show X% in The early users of our in to Snapchatters reaching initiatives million results daily improve North our million progress. initiatives active by reflected are signs XXX way users begin of in quarter-over-quarter up down Daily quarter-over-quarter. $XXX less QX, global year-over-year, million, America community active the was these

million in compared $XX in the GAU quarter in compared in our and $XXX our World to million $XXX prior quarter across of prior improve GAU million the Europe prior To and models Rest was million $XX the million content engagement, in content million we prior $XXX to to in ML year. was of continue personalization and year. to services. all content the ranking further invest in deepen $XX

North are As increasing America, a time driven while disrupted, with spent a some growing to result, this by contributed XX% in with a total and of time improvement X% growth year-over-year stories. global engagement year-over-year we in X% have watching content, on watching spent mixed seeing results and basis in significant declined creator on spent quarter-over-quarter just strong under been our on nearly QX, which basis, changes and XX% by in QX. content content In time spotlight quarter-over-quarter

back-end North types to make engaging progress unifying all America the our the ranks regardless we year-over-year of and deliver stack with as through time increased quarter and spotlight a improved to content QX, moved to the content month that community In content engagement for spent trends models the we single format. of content June. in continued most stories between ranking

on to in share content creator These efforts content. compelling more making and are it community in contributed submit spotlight submitting QX. content growing and than growing number To XX% to creators easier subsequently focused our we expand of part supply, our year-over-year the for creators

with engaging publisher working content also bring partners and to to new our community. are We

innovative with Snap to content Augmented behind-the-scenes announced AR ranking and experiences. experiences. evolution year-over-year with our number by play to of Nation, live lenses and Nation with Live festival lenses AR Snapchatters sharing QX, the increased inspire driven AR popularity day including Snapchatters improved and in we tour partnership exclusive reality continues existing and on Generative per of optimization of in music gives and billions example, XX% QX, that of AI communication times experiences our their experiences, friends In For average. Lens the Snapchatters access an

our by XX% in U.S. AI ML Scribble enables [indiscernible] than billion lens, and XXs Snapchatters. was our was to X Snapchatters into QX, artistic viewed themselves versions example, which over of transform For World of lens viewed times more

a times X first we with collaboration AI her days. In with which to Beyonce Generative Cowboy the launched new Album in Carter in lens XX addition, was engaged dedicated million

AR continue ranking and improve recently an of the order and content to quality model for lens in We deliver ranking preferences, AR globally. dynamic based community. AR we experience Snap relevant initiatives personalize We the lens XX% ML-driven improved AR on our increase in predictions a with year-over-year Snapchatter Snaps. enabled lens to to to story our These post contributed technology AR ranking

is this requires our suite new QX, in that powered released to by platform. lenses have generate AI Lens which we the by and developer hundreds Our no the of Studio lens by prompt SnapML X.X, Gen thousands creator. that proprietary features enables coding progress using in a AR text who leveraged In Studio powered our creators technology platform minutes of creators One

The that our response our ecosystem. long-term developer vibrant Lens has to tools in new belief AR a requires and inspiring and and Studio success reinforces been creator

we and we innovating order engagement. As in and deepen global to product our on forward, are move core community focused grow enhancing our experiences

more believe progress Partner progress look our community initiatives sharing a critical to Summit We our our these opportunity We to forward our XX. on on is Snap and monetization input continued time. expanding September of over at both serving

progress improved and larger on make ML foundational ad formats. performance signals initiatives, more X models, We continue advertising to platform including

for partners. optimization drive continues encouraging XX Our results to purchases for advertising

API practices e-commerce XX prior Sam's ROAs DR auto bidding, our conversions a continue their drove to drive XX% higher to into everyday to essential For example, company compared strategy. leveraging success optimization, an best ML-based and Bridge Rich, campaign lean

streamlined without enhancements stack. install For and made entire apps the have the app so invested iOS, Snapchat. can on leaving ad in app-based ad We that advertisers, we format improvements download experience across Snapchatters

shows driving improved for per enhanced testing lower the advertisers. that download experience ROAs app Early is install cost and

showed And improvement and app in recently app cost cost per products install with purchase, began We our testing scaling optimization also consistent expanded after XX per partners. to advertising these we an purchase. install

number a We a are on are encouraged including improvement Snapchat. to clients, roadblocks, app XX% seeing to of ROAS gaming see in XX% that

particular, We from value results. are have optimizations. purchases benefit anticipate bid also and encouraging new testing e-commerce of advertisers, in which to gaming seeing will allows begun we mobile the optimization, these on that early and We value advertisers

For example, increase size expectations and a average size in XX% in L'Oreal The and increasing campaign ROAS. purchase increase new brand the and aim leveraged optimization of card from X.Xx Lancome, delivered a our ROAS. exceeded with a purchase beauty average value card

their platform DR ad privacy-centric campaigns. relies optimize Our on ad scaled to can advertisers signals use that

API, our signal for driving first-party results privacy-centric is Conversions advertisers. solution improved

For example, to last European implementing e-commerce higher deliver ROAS company, cost My conversion after per Jewelry, saw lower XXX% their campaign API. XX% and visit click

several announced in including LiveRamp privacy-centric Telium it easier we partnerships, and seamless In conversions API advertisers to to way. adopt and Datahash, for Snowflake, a addition, make

API XXX% integrations integrations collaboration to advertisers with year-over-year and QX. Our in conversion in improvements to resulted improved over growing conversions growth and partner API,

seeing we're with progress are medium-sized by advertising small We partners. business the excited our and

few products, their reach and services, can within gain followers, creators alike interest SMBs new and or audiences a Snapchat. taps more Today, promote content all

In useful higher campaign addition, businesses to such help ROA. pixel achieve dynamic setups launched we recommendations setup and as tools Coles

have to QX. advertisers in part Snapchat, doubling total been active than changes growth in the instrumental SMB These contributed of advertisers which in year-over-year on more

compelling to community partners at reach Snapchat we quarter, This our scale. the advertising continued to products build help advertising brand

and games of unique Games, our of at NewFront with Paris in most share on-the-ground sponsorship popular our the creators Paris. NBC the presentation, our opportunities, Universal of for will Olympic announced a we example, some number access including their For where XXXX partnership perspectives stories with

Advanced support to and sports partnerships agencies campaigns. will with the we drive official NBA sessions, announced to an enablement Snap content brands, community. personalized advertisers, and to for the qualifying and and effort offer Partner long-standing and We provide In spotlight additional NFL, training also which dedicated enhance recently our across performance our their for renewed tools WNBA stories incremental Program, and resources

opportunity their advertising AR lift experiences solutions campaigns. to offer performance the the brand and unique reality sponsored measurable that of Our augmented leverage marketers engaging

ads ads Specifically, research compared AR when awareness X.Xx deliver the on lift pair has that video to video Snapchat with shown alone. ads ad campaigns

active AR AR advertising Snapchat peers. solutions, Research reach AR ads, order all from beyond our extensions their and the more that ad including amplified extend to ads, which Snap include to products and mix businesses, services, OMD our and compared our our for dynamic spotlight. partnership intelligence we found commercials to the recently camera drive Xx industry of campaigns of impact Ads, with expand advertising our that In launched collection and attention AR product

that advertising is to platform business focus key ad our more measurable conviction durable our building advertising move delivering continued have we on results forward, and a and drive for our larger improving solutions business. we that the As partners

making With foundational the on our to in their now we helping place, elements forward businesses. progress partners look further our grow advertising of most important platform advertising

to the With discuss Derek to to I'd results. turn that, call financial like over our

Derek Andersen

product advertising DR revenue driven revenue increased afternoon, in while was revenue progress pixel up advertisers. $X.XX from from app-based for our Total active delivered was verticals, oriented billion, more total technology Evan, certain with XX% X% good everyone. weak year-over-year, revenue purchase XX billion and retail, year-over-year of QX, driven advertising entertainment. declined optimization contributions combination by and advertisers demand discretionary including improvements continued we year-over-year. year-over-year, $X.XX a particularly consumer . Brand the XX% and than year-over-year. Thanks, advertising by up XX% doubling early

year. of shifting the well As timing out holidays QX as of current impact in the

progress to We revenue make sources million diversifying in $XXX continue reach up other year-over-year with towards XXX% revenue QX. to our

due growth concentrated and all subscriber weaker includes XX% America in revenue, the North in year-over-year in Snapchats+ milestone which the relatively with region being of relatively revenue QX, is subscription of grew revenue America. nonadvertising demand million In reached brand-oriented this XX the the impact QX. revenue of lower North Snapchat+ Other to rate majority

effort was opportunity and better growth made growth see small changes going in go-to-market our Americas, accelerate we to customer bright spot business to market forward. strong North in optimize the segment. medium-sized America to North our in best part DR where for America in by product driven our an from and QX fit a In greatest the support in clients we our in QX organization

year brand-oriented comparisons. relatively shifting XX% the stable DR year-over-year the more while versus periods fully platform, Europe DR revenue due advertising was grew progress of progress continued offset environment demand QX primarily a year. and Rest platform for XX% of prior the out challenging revenue more World the as year-over-year impact rate solutions ad of by grew holiday ad this prior on our our of the driven to continued timing quarter deceleration growth of

year-over-year driven large Global year-over-year, in delivery Total advertising expanded impression approximately XX% growth in advertising X% were grew volume Spotlight. growth part QX. exceeded within approximately eCPMs inventory by demand down as

year. by of year-over-year. adjusted the Adjusted QX ramp large in cost up that of of revenue $XXX in cost our revenue, and the of which more the increase $X.XX to DAU in and of is the was largest AI and $X.XX $X.XX engineering greater-than-expected costs were moderate QX prior million but the ramp QX, range QX, AI to prior year-over-year investments. Infrastructure in from per and per XX% DAU up combination implemented was in driven part ML investments driver costs a in of efficiencies $X.XX below we in expected Infrastructure quarter, ML due a in

was year in from prior cost adjusted QX from stable of in or in full line XX% of cost of $XXX relatively quarter the structure prior which XX% but in margin and at down million XX% slightly guidance QX in components range. remaining Adjusted at end gross the The prior is year. revenue XX% of with our up revenue, the the quarter lower were

Personnel XX% QX, ended QX in head year-over-year. million count were expenses full-time XX% with down year-over-year. initiative costs X,XXX the operating We Adjusted following decreased we restructuring X% announced QX, in down year-over-year QX. in $XXX

The legal-related environment previously California. and announced the was increases in decline well impact of with as global in including of impact as partially complex offset state the settlement personnel-related an costs by increasingly regulatory costs the complying in a with QX of

the in In reflecting related revenue to from by retroactive million the of costs expense $XX QX. incurred Canadian $X services operating discipline. year, EBITDA negative tax addition, up QX prior digital $XX the QX, in million and government Adjusted we in million was in higher implemented

from year-over-year QX. in XX% through adjusted Adjusted share up EBITDA QX, revenue in flow-through flowed or of was XX% the EBITDA that incremental to

in to the we prior improved loss net $XXX order to drive in million As deliver growth investments in carefully prioritize and profitability. year. million compared Net top to loss QX continue our was line QX of of a $XXX

of expenses. impact combination improvement of $XX in refresh million reflects recent a $XX $XXX of improvement head expenses reported of adjusted the in reflects grants in reduction as QX in we was levels. and The with our count EBITDA driven stock-based loss compensation in expenses net from our combined at reduction on SVC, related the the SBC-related The current the in the that reduction compensation as diminished year-over-year staffing a stock-based The resulted better GAAP well million flow-through SBC million accounting restructuring. of and related by

benefits retirement million costs The Free convertible in $XXX reflects and revenue notes million adjusted in associated was $XX SBC partially million of in lower improved flow of with the were early QX, outstanding QX. of cash EBITDA offset $XX the which of by collecting our QX negative in impact seasonally lower QX.

flow cash XX line Over balance with to flow. the positive $XX free growth while to we continue positive as cash positive deliver investments million, sustained trailing was months, flow cash million was operating top $XXX

count prior Dilution or share from the QX, year-over-year in was our in X.X% growth in quarter. down X.X%

of repurchase a count, $XX.XX. to average responsibly As reflecting cost at X of our efforts part we manage of of on price an million million share shares QX, in our impact the share SBC $XX repurchased

opportunistically share shares, X.X% cost repurchased an in of shares through of representing at began QX have managing total fully and price XXX.X we Since share a per million outstanding $X.X repurchases of diluted our XXXX, we of $X.XX count billion. average share

QX, $XXX In XXXX basis notes convertible a we in returning of coupon with points. million issued in XX

In and addition, notes. million repurchase the $XXX notes our $XXX of of negotiated our XXXX million we XXXX convertible of convertible

notes convertible resulting with unwound XXXX $XX in the calls million. our also CAP of associated We proceeds

We liquidity have and balance no in We debt in for ended the marketable more than recurring further maturing and term. billion of current in year, $XX $XXX with million sheet our combination securities $X.X while these the maturing and ensured adequate long operations XXXX our QX in cash believe with for strengthening on the transactions million XXXX. hand

QX, anticipate enter approximately in continued assumption guidance our be of community. growth that global the as And on we built a result, our we As $XXX QX QX. is will million DAU

We our advertising our to performance improvements are map against drive platform on for road advertising focused strong partners. to executing our deliver to

$X.XXX year-over-year revenue for growth to of XX% range guidance to QX $X.XXX billion, Our billion XX%. is revenue implying

modest for to on with quarter, business the legal the we Our personnel momentum in we we investments last full established that continue marketing to structure. incremental ranges make regulatory have which cost burden increasing the an our impact experience and consistent sustain guidance the provided assume in our QX and of investment cost plans year infrastructure remain we and

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

carefully partners. community XXXX, we investing prudently prioritizing forward cost against we our on focused our the will to the and business our As second our deliver into plans out half have investments of deliver we while for move set to for remain

To making Tuesday, and our take on encourage our 'XX. community now partners, about sixth are we questions. your into to Summit and we Partner tune our Thank learn you Snap more the you, we'll progress for annual September

Operator

[Operator Instruction].

today Our Wells from with Kenneth comes Gawrelski first question Fargo.

Kenneth Gawrelski

maybe the last in seen To little over how quarter? you've help progressed us with quarter, talk some maybe within the performance a volatility about several bit advertising you June Could out quarters. months the just of the advertising the results in the

and XQ And then you've you related bit maybe contributions in about the could content the to quarter Could Olympics? maybe the third and I the political little out add to off. to of some about impacts in Olympics your talk relationship NBC just half? that. you with put releases in the then has from the And -- talk about of second U.S. a started Olympics potentially the know the I'll that,

Derek Andersen

for speaking. Derek Thanks it's question. the Ken,

progressed separately. how high growth QX context to DR a about of the in has brand the of think sense I level, revenue course at make and talk it through might

fairly that clip. we're a at resilient, also business . that pretty and incredibly it's stable. things And seeing it the is the I growing is strong with think X been it's of DR

direct in point comp that, revenue XX% roughly a QX. with bit put tougher advertising into line up despite on to the year-over-year going QX. in finer And that's that observed a So XX% was response QX in we little

So is there what very you're seeing is that performance. business much based a on

And business, pixel our XX hood really we're purchase looking so on that you're of under seeing the momentum good if optimizations.

And of advertisers. the performing we've some for we then solutions alongside as into delivered advertising move quarter, newer app-based the that's current

that results. earlier purchases think optimization our app and showed in that quarter remarks Evan really testing scaling of we've good mentioned some XX I up prepared to Install the App after the been in the

And we're now. effect. to some then also we've case letter seeing in that studies advertisers shared benefit the from that And

We in we also really adoption. that began which promising. then you've performance. of value course, in That optimization got ongoing testing results momentum from is XXX% an some year-over-year and going, a is, the improved of improved QX, see really -- the CAP good And was up which early strong driver also of

So see We on the in in seeing we're advertisers contributing together, behind reflected side than highly that's more has active a and to can growth that And some QX. business advertisers growth taken active saw shared double DR we strong that really the in earlier it. you also year-over-year that's ongoing performing there.

And seeing make we're customers. growth strong setup progress those seeing of And and making to we're easier segment. in of Promote realize it drivers including a the around behind really Snap ROA automated for we're quickly SMC get started the campaign things obviously, to number tools some that, positive that's the with reflective of some of there's course,

and clients side supporting go-to-market then the we on And market order focus on operations where fit. acquiring our a in there really have good in improvements help to some SMC us product also

to why more performance-based business stable. there's be a little business, we've growth in the investing on there reason a very and been focused resilient, tends because this more it's is that bit So

things brand some them into time, some in but of over on there's a We going which quarter. to decel a and the of are is is the couple call, you're QX mentioned quarter. there prior headwind, known that led the think the were timing that a last the holidays events that just of that -- of what was there the side from in seeing bit X I on

some consumer portion QX the the and retail discretionary was mentioned demand weakness verticals, that including disappointing seen of entertainment particularly performance we've in I we in technology, that particular think the earlier. of that in

so business, business we've And that over thinking when years. I'm a about the large built brand-oriented very

scale have learned be events products business we our and DR very why brand advertisers that, very time very again at over a our community we investing can the for us to whatnot. performing And is focused reach big lot brand when they on also large volatile, business. that to But have allow which in we've

we economic that Direct marketing volatility for people where think environment I where in the really funnel in is particularly what well start where investments we we really moments in or seeing and have Response. see good a example maybe we're tougher So like of their moments is do this good performance moving down verticals with can

side but performance a and the on business seen DR the And those back example to quarter quarter, fits so invest economic data most that cases, is I to a we've little think been tougher advertisers, their environment a because good in has for in of In of the been continues great us restaurants. vertical got grow I think the recent able lots probably the of and to restaurants that that that a category for on you've for suggesting that. grow some continue current they've that's

start little QX, with, I'll would shared move there. share a then how And XX% gives a off XX% little growth of clearer into be revenue about line to we in for bit you guide year-over-year. So for top the color hopefully, expectation that as the QX. understanding QX dichotomy thought To we bit of on our maybe we

strong really that. result new reflected is to all, quarter, off that we context, that put begin are quarter-over-quarter start good QX. to to quarter-over-quarter XX%, of implies a to of And would growth be in historically just X% which in speaking, which for First a the

a that X-year of to that basis, XX% back I first we've stack can think from context significant step in be XX% too, X-year on and more a step this would half the XX% if stack implies seen year. you XX% give a a the on look up which bit And to little

little context. So hopefully, the QX a more that into into puts guide bit

forward expect this its road business and got We've to year-over-year at of up more from DR which map XXX% other contributions the by to continued driven going and a great now continue be we $XXX Specifically, plus a growth strong trend performance rate the mostly of course, quarter. there and of run of revenue, revenue which Snapchat+ from subscription comprised million a of business. over

are So big QX. not see we're areas brand those the we've that expecting in the assumed big drivers side, from -- to seeing a we would rebound see

Now platform on has certainly, But that. high level creators the there. lots huge of you business the quarter, in course, like Olympics, around of a that halo brand at spending got got the called see great across in we've the a like content do been not Olympics we built terrific. And in we've The of events We've entirety recovery we've covering and of out the athletes. some events a lineup content Olympics. around the participation things at had brand

We're in step to improvements predominantly expecting DR the in from quarters. the business come Snapchats+ the up business QX and coming in in the

bit sense into like the year-to-date how we has expect So quarter. as things what business gives a the hopefully, little of to you next look been that and we go progressing better

Operator

with Street Research. from question . Next comes Dan New Salmon

Daniel Salmon

SMBs That's than driver the a this big that. advertisers but I SMB are last about a count doubled question. so advertiser quarter. presumably, more in XX% little still have quarter, than growth a total you different X-part of the talked

count? of part growth speak is, the drivers So can to you advertiser the first

else but growth in programs, part and the that drive imagine your then DR the the count ad are of the road that you'd total And of of road are anything rethinking improvements or you partner elements there the any ad performance are map not that or that, has whether reseller this helping agreements really product second advertiser on any part growth. I highlight is in map.

whether yet. more I'd particular, sense we're like lot whether other hear just AI-based SMBs in make be ad platforms. seeing thoughts a on to at on value updated for of makes to automated to that it And those developing your starts sense buying generate curious products . look

Evan Spiegel

Dan. Thanks,

a and high at advertisers. incredibly seeing medium-sized excited what small with by just we're think we're I level,

long-term overall business SMC growth the our of the coming years. for think driver I important revenue is us most over probably

really and started perspective, on there terms reduce and the spend really to can So is then road ultimately and getting exciting. important automation it been Snap. a has these automation growing friction advertisers in From that for see progress of map vitally really

at we've be think made you sign up the at I when campaign if helpful those an getting look they on SMC inferring And can advertiser enhancements setups. customers we advertisers, getting started. objectives and of direct we're that some for preconfigured account to SMC then Snapchat better for really for folks

also tools on that example, offer up, do more optimization. are there's for do in I like can signal set We think terms automation, codeless budget optimization especially we useful. as very of creative as well

improvements some coming have We there.

season. holiday specifically, -- more we're thinking to ahead I the think

So major e-commerce, working work off like product advertisers, leveraging model and SMC focused on look privacy-safe some platform, drive signals, selection, with really on conversions to updates in session been more we're as at I things we've on. doing

those And some checkout we advertisers. SMC of incremental are in-section experience, conversions of conversions. valuable which in-section They're really driving then for conversions. more is think most important really overall Those to the streamlining the

I think SMC which in of Promote, the X the for app. of the has terms Snap in started to there top allows been advertisers funnel business, get big of drivers

a on monthly users million XXX over basis. reached We

try so Snapchat excited our encouraged we've to advertising just and growing their see their for also, passion to tools. I think, them their that out usage of service I business for has think And our been our with service really

term, for driver as think business, of we're the our in but our growing growth. So very the I of long-term a real on Snapchat and near do a source community overall will great focused that both more be importantly, growth

Operator

Our from Doug next JPMorgan. question . today with Anmuth comes

Katy Ansel

on is This Doug. Katy for

you it's want is DR know First, the to mentioned been just on I business. I more resilient. versus volatile more Again, touch brand

Snap much So maybe improve spending have and brand do over can of just overall? can how on to side you stickiness talk visibility about within the what you you typically the brand

obviously that's been second, on And the important the an then area. focus engagement of platform, side

talked out improvement some rolling You about inter-quarter. product

effects more negative. positive in engagement had Some America, some North on

give So the takes can there . to talk about and just and puts you bit more just little color. a

Evan Spiegel

Yes. Thanks, Katy.

with thing the advertisers performance driving I tools and of with performant, lift MTA, or MM as the solutions. with think more first-party important results we or most advertisers. brand I really And think conversion are is very solutions our business, look at -- are measuring recently our performance our for whether some

think and spend continue things, we advertisers relationship lower half I matters the are of what lower funnel the sophisticated brand in on most back the full between conversion is I funnel. So because terms in rates especially them. of important awareness important X really measure help performance. of to overall And the to most spend is as building at most some funnel brand look think solutions really really leveraging that And the brand improving we advertisers

leveraging as year, the really and So of with half our make I really think important. funnel be we into get advertising will the solutions full they're our working partners sure back to performance brand offering our

content Spotlight. experience We we've I past had that the of engagement, better on America, North making over of it for a a bit really community a combines the out couple our of because new a we're building focus has stories then quarters, progress whole content back-end terms they types in ranking think And and been both combines that's of in the especially stack think team that split love.

engagement terms friends to spot People has as love And and a have so course, friend stories. Spotlight growth us then, always, a see are and creator for real their bright of of in up to. what stories. been

to types positive content be go So to being very types we'll Snapchat. for I experience content, get think all requiring our than the places combine content able different to different rather on community those of those to

time little But been content at choppiness ultimately, has a saw stack and while quarter-over-quarter. were through content building new bit think we maintaining to stack the a what overall, engagement combined look that America and up our we challenge both whole team's the DAU production But existing the spend a North America, And bit North quarter. of a of focus. both as I contributed

there. So we work directionally positive as make to really progress

Operator

Lightshed Greenfield from with comes question next Our . Rich Partners.

Richard Greenfield

questions. up I DR. of to just One, couple a I on wanted got follow

quarter over and to You in to year-over-year, Derek, meaningful the the wondering talked like tied and focus the talked QX was exploding? think and I you've a to much given put. course you to making everyone of about Why ad DR progress API the revenue I listening yet, slowdown this call progress who's you all not made obviously, the DR QX. guess integrations how is DR advertisers from question is

guide? And that growing just why dramatically? much Evan. follow-up is mid-teens? it just a it for a is in And headwind of the Why tied Like then scaling advertising brand is QX to how isn't

from of what learning question could changes see And we the When And to you content. app app the we conversation goal is on the you're what U.S. the happening? sort time about been were you whole its pressuring to is in the actually the this soon integration see make having the last as plan? talk get -- about causing On up single you the what overseas? open that are actually that could you you've spent, when of how still the that a integration what's and like testing unified Is still

Derek Andersen

Thanks question. for the

diving just X-point in how acceleration point was just about for think overall little bit think revenue to percentage a prior that from on projections QX. the specifically, think QX I and DR guide revenue it's I important the to in revenue ad and remember year the QX in a there to

actually the was acceleration And a faster Direct than it for that slightly business. Response

bit a context, coming the that all it finer put our almost year. quarter, of in the overcoming of think to of the be So midpoint at I for range X-point in acceleration we'd more little prior guidance sort

about QX and a in for result is of for at implies fully keeping end I this that for pace just And of with XX% at range, we'd even guide keeping that year. prior to XX% to and a X% to put on where to a high for I XX% be improvement periods, look implies you look XX% maybe very pace. nearly business, historically X-year And which the essentially stack that's for QX. across our be XX% from reiterate an the And acceleration that, QX, overall we'd the point in sort quarter-over-quarter another QX So finer it to up then want it guide is year. way good of think think QX the on if to

more a a parts characterize it question. other it's So talk I turn over improving. is that on of to . got And Evan to guide representing your you've QX not think a really the the to road map But tough about that's in little business pretty solid I'll bit DR side.

Evan Spiegel

the and maintain in and question. to Thanks, app. mentioned, how the that just stories with on different content experience, working but Snapchat Rich, to definitely now for another. which both relationships want we've We are the experience. located hard the know spotlight, types of we I content they content is look community sharing important content our content also on When at beloved tabs by in been way terms combine on we are as X really And X their the

the those And us just that friction. that stories content bit to take folks both makes advantage will It will more we doesn't interest us of across and a have combining And on signals and supply their that content across based both relevant more also overall types. we know content spotlight. provide just allow of to supply have leverage help that discovery

that across both that interface, combine those are the think and if content consumed. across so to it change sort types to about stories user There's also been both of testing. you in to content get objective which has X piece the content the types, user So combines way is both is video short nontrivial a infrastructure types of interface there, different because rank work steps and that function the of the has

that example, share where see That's adding And Hope on spotlight, which Partner you have is also the we've to experience. XX. September we'll actually course, where in made at that you'll for Summit, bunch content testing in of progress, more a Snap and testing, see is the to combined upcoming been have first stories publisher there.

Operator

Our next question comes from Mark Mahaney with Evercore.

Unknown Analyst

Peterson Mark. for on is This Dan

granularity Focusing were any in demand, a be trended on give helpful. same, called on they verticals level quarter-to-date? and the vertical advertiser . that how would you worse, gotten the you that QX soft can brand Have better, the have out

Derek Andersen

question. the for Thanks

how I on in the in the on of is and what's the new probably and I most the predominantly we're guide zoom assumed driven there as the the going business earlier Snapchat+ momentum see will the think what in thing business. assumption we're to probably response ongoing be continue the touched we've on essentially beginning sort got in of of important as about by quarter revenue talking direct the a into momentum to the continued when we're little -- guide growth that to QX, that well bit the

significantly Obviously, we're on assumption really So see for into some brand hard the new turnaround built in at a we're about we we've improved with We've going an there's and to stuff in letter there not other been performance the that. innovations significant that or working guide some announced talked delivering that in customers things quarter. fronts there.

is on months and optimizations market go-to-market really and talk results can on over What DR putting deliver around product we it scale to delivering of here, fit and about investments that we're are way. focused I sort focus the really around that those wrapped have and think operations I consistently customers, you've and strong a advertisers we're go-to-market they ad deliver XX heard that So performance it and into product around last deliver products the having that us keen and from. on of for solutions would this think

you're Snap deliver going and lean folks in to campaign to Promote, and think of results small we're continue that into see the to there for seeing into those lean the well. the performance optimized us momentum front to some setups medium-sized customer as I we're delivering continuing continuing

what been results priorities for XX building that we So and strategic on verticals. recent to saw our in our building quarter on Snapchat+ months most last and around the the the XX have DR

helps that hopefully So little. a

Operator

Our . ] Bank next question with comes from America. of Bunzl [

Unknown Analyst

frame run, you and potential how become stage into time for Could to some current to quarters? over the can how few monetization current your related long insights big and the in next that. are the And you expected surface the grow scale provide spotlight of

Evan Spiegel

time the for question. And much service. spend, the been so of source definitely excited about Thanks uptake that a growth of inventory growth We've it's us. for been in the certainly, spotlight

much video a on we use, that compare video think experience, most of our will I to believe really of easiest Snapchat. we headroom to . That's think we in part know how especially of stories, that reason we compelling combined if services, much time combined I experience stories combines spent the have format discovery. and this other short why terms on content so short-form the be with spotlight an loves community on I and focus amount content enormous

that. So the very hard team has been on working

growth submissions learn possible continue days to our that to the to focus that's really model understand terms have and progress months updating signal. quickly original terms some with for that community content models freshest not so for model great overall us from improvements. and in and wait our making spotlight can We us of to serve we enough coming We've cases, are in we freshness that the engagement of content sure of supply. area of new make pieces One seen to and content leverage is around big some for in in helping with

pleased So out the A and content there, so to get experience lot excited with growth to community. the do far our I'm but to certainly, combined

Operator

Bernstein. Mark Our next comes from question Shmulik with .

Unknown Analyst

that's of monetizable This away camera app is the X, open to the is launch from just given something . more Shmulik. having Mark on Jenny like perhaps moving web consideration have We product, to just of any there more behalf the spotlight, Snapchat's to

Evan Spiegel

content Opening with rather people. always than friends especially question. because the created for other Snapchat part the by with real grounded much it has so been the you your of the camera world keeps you to important really experience, in a distracting Thank you

Snap of And helps where with important story. to that new if It they Snapchat augmented helps and millions conversations of starts their basis. something really it's add platform regular seeing And and what share that on them product. create -- they're the to to share an engage funnel hundreds of people experiencing for prompt course, or is reality our a express Snapchatters when friends start a lenses they with amazing that's of yourself snap top their

to and that opening really record hit think of what, Snapchat, service. in given strength the I part seen And of part unique the years camera Snap continue XX terms in a across highs been differentiates up been what across all see centers, unique on we number think were think now, of working the experience we've is Snapchat we've quarter. I almost, it's So to really the our new which of highs I regions the

the share I prompt of do look and that differentiates opportunity, our with unique really think, too the think have that's and to close believe, something up. experience is Snap an been strength forward Summit product help express yourself the the run we is sharing friends that's working there surprise to we and more Snap much Partner towards, simplify to Snap overall, at really and I and family your But of want to with core to something the and So the I though, coming and I don't service. Summit.

Operator

Eric Sheridan Sachs. comes from . with last Goldman Our question

Eric Sheridan

and Evan. back bigger picture a asking Maybe question, taking a step

to think platform XXXX, was monetization your with an positions the execute a or growth, as have term. a you and on detail you been is terms elements far so this the of this or year towards on back and you the long priorities the you've of key sort things user of sort of call investment in in updated of to lot skew for to of product half look the medium the terms of lot value on of journey eye and of engagement on any You towards talked critical . a platform evolution that

Evan Spiegel

the spending certainly the over the business Thanks at long-term question. the strength of think time for past my just I've of been opportunity business. looking And lot or monetization the a side our much on the year augmented so so of and reality. in more I

personal goal revenue resilience is platform maybe the around million world. of have see on business our I community a the really we with our engagement the to match for XXX a think resilience and broader our growth people

seen years, the that, to and able service. durable, been to continue that over think we've really we've been I engagement has grow

segment. and of for the really in medium-sized what at side of excites I area and revenue think small be the customer coming year focus me will the a us investment and as big look I things,

I the and scale really engineering leverages on our of the our results drive strength with community also to advertisers. think side and ability product our it for

our result really base, we want ultimately, sort that, foundation from revenue term. will a resilient believe in we business of a much more that's that for building And diversified customer be to the and on long

and with and on So a performance. foundationally then learning side, the machine models ability monetization our customers lot medium-sized on especially certainly of our drive making small, continued a focus progress to on

Operator

Snap our Q&A concludes This Inc.'s as for as session. Earnings session Second well Quarter attending XXXX Call. today's Conference all you Thank

disconnect. You may now

Snap (SNAP) 1 Aug 242024 Q2 Earnings call transcript