SNAP - Earnings call transcript Q4 2024

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Operator

Good afternoon, everyone, and welcome to Snap Inc.'s Fourth 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 Fourth Quarter 2024 Earnings Conference Call. Evan Chief Executive Financial are and and today Andersen, Derek Officer. us Spiegel, Officer Chief Co-Founder; With

disclosures. Please to refer letter in those to which today. to we This find Actual our and call these are Investor update Relations press conference no differ assumptions make earnings forward-looking website based release, results on statements, slides, as forward-looking may expressed investor includes and our our presentation. today's investor obligation statements, at of investor.snap.com from materially

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

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

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

Evan Spiegel

more and content progress made and Hi, total our in toward and viewers community million diversifying make improving $XXX an spent to XX direct-response line you reality. top advertising and our active QX, XX% watching increase year-over-year building revenue and Daily and translated users The depth million free increasing progress combination top improved of evident cash everyone, the reached QX and $XXX to and long-term QX, contributed QX, Snapchat+ grew In million growth EBITDA In progress of XXX our engagement, of adjusted business revenue of benefits we of $X.XX million vision our to investments of flow-through, our augmented discipline for flow in sources to business The and flow. cash growth for our our million focused are EBITDA content profitability and billion. of have year-over-year year-over-year. time with free expense thank income. we on priorities subscription continued joining now adjusted call. our net of growing $X XX% our line revenue core the driving and of

$XXX full with positive our over full of in $XXX run an marking flow. positive free million cash adjusted X We million cash we for XX% ad generated DR XXXX, grew revenue, which subscribers XX% billion subscription also EBITDA. revenue, year. driven adjusted EBITDA delivered of year-over-year, XXX% year, of annualized In $X.XX year the million rate year XXXX revenue, primarily year-over-year achieving of $XXX for in and consecutive of million. exiting grew majority XX year revenue, revenue grew million which to free is the our XXXX, fourth grew from consecutive fifth In other full the year-over-year, Snapchat+ well of by generated Snapchat+ which flow, we the

momentum As focused in enter on build are we XXXX. key we the we XXXX, to initiatives on established

and our incremental with them our Snaps advertisers enabling Places, to ad Sponsored while in connect community Promoted First, new and reach provide unique with ways. placements, personalized

automated Second, with campaign partners go we performance. insights tools providing we actionable are improving advertising enhance the by market to to way optimization introducing and

learning to rolling drive advance ad infrastructure our designed our out Snapchat a for machine higher-quality will we are and simplified improve we continue experience interactions. to usability Fourth, Third, community. to accessibility

simplify system Studio, as latest well that innovative Lastly, to our real our developer XXXX, to Spectacles AR into our the AR creation number experiences life. In version in that the on expand OS reality bring our developers we will XXXX, by we can everyday Lens by increase empowers our experiences generation of augmented world. and fifth new Snap of computing create launched overlay tools Spectacles, ecosystem which powered of as operating enhancing

We our Chief ago joined rapidly X where Ajit as Officer. to across and be Mohan of presence region. he President new also that the our over Snap will Ajit Business pleased are APAC, years announce business grew

advertising Business be across operations Officer, and As organizations revenue Chief greater alignment help advertising serving responsible Ajit lead for and our all our responsible growing for across business to our will bring regions partners. will our business teams product

built even reinforces the innovate our a unlock community years in confidence our XXXX We come. for adapt the business, to dynamic our in and positions we ability in progress to greater and to value Our Snap in that foundation environment. believe partners

XX active million to and million the quarter prior in prior XX quarter prior continued and daily to make community, reaching users million World million in quarter-over-quarter. Daily of the million in an America of QX, million XX million XXX XXX users was XXX users XXX global compared Rest increase progress Daily XXX million compared to the We year. in users compared in million North the Daily the year. and prior Europe quarter year. in to prior in active XX million was million our in in active growing active was in the in prior XXX XXX

we of our of long-term In retention family and Snapping strengthen the of the through and community. their creation new is to service driver the global core continued help our and QX, inspire introduced growth communities relationships our features Snapping. with and primary friends

on we in based and QX, to new Snapchatters example, stickers react For express trends Bitmoji for themselves visually. new launched

move. parental to in-app families connected We tools location for while new on stay also and making announced resources Family our the sharing for in features Center, easier it hub

of new we steps access backgrounds. the places which Snap Snapchatters launched track new features, Map early keep the including help visited the and app In custom on and they Snapchat+ addition, teams and

grew time by content spent QX, primarily growth year-over-year, total strong time In watching global driven in spent watching Spotlight.

vibrant over ecosystem. the a year, coming also to creator rollout is refining expanding in broader foster Our now preparation on focus symbol our experience Snapchat the while content a for community

Snapchat Snapchatters expanded offer Simple XX over we million we QX, nearly to testing country in every where In Snapchat.

ahead, we to easily power these are insights optimizations of our to These their learnings members. While the order already community at experience our further future locate easier subscriptions. more in early improvements have months improving refinements tests to Snapchatters help aimed in users including some Snapchat for the for the gain led will from simple initial engaged most make transition

days content users. We including in casual continue to active metrics, more encouraging less and engagement frequent see trends increased among

watch. We how is find to behavior are pleased a rather content shift a their watching to Snapchatters with scrolling time spending simple driving Snapchat of with greater than share in particularly something

learn, insights a accordingly iterate months the Simple gain and rollout Snapchat. of We ahead ensure in to will and continue to smooth test

In creators original to fostering we QX, Snapchat. timely a on prioritizing near-term we our authentic dynamic reaffirmed balance proactively platform. and view content, By of with original and ecosystem the time health our commitment long-term content

comments significantly creators. XX and submission between driven increased of within pressure to the by deeper primarily example, Spotlight videos X content engagement hours last For over months, from Snapchatters on content, leading

than and addition, Snapchat month on from more X media our community, publicly were billion shared creators Snaps In every partners. QX in

greater broader content diverse we of to grow opportunities. a As tools invest creation the to continue efforts set in part in monetization of our community,

their to new yielding building our creators announced program example, These monetize our for results. eligible Spotlight storage that For stories. creators on monetization share initiatives unified that creators videos, are allows monetize we revenue program helps

our Star posting past and year-over-year of number creators year, content we than of the onboarded XX% in grew Over Snap program the QX. to thousands more creators

their have growing achieved onboarded also and following While Snap by on seen celebrities, organically and we creators in many Star creators Snapchat. status that established we've significant growth business

These increased Snapchat of has underscore and creators, dedication For example, for Ella to creators. followers herself the now her of our content months Moncrief, top enthusiast, our empowering just our strengthening XX-year-old a X as view in content engaging sixfold delivering adventure ecosystem fresh health one and health our established efforts and community.

using XXs our top AI themselves, nearly Lenses driver was drive we continue Studio. to and X AR of Creator have and Lenses. generative the a our QX, Me with In momentum together their to version our creators creation this create AR program, enables years. XXX,XXX creators, introduced community AI last new Lens new million personalized the every than over and which the to on Lens, generative Lens is built to inspire to vibrant Snapchatters ecosystem, support the XXs lens, engagement supported person first Challenges Rewards QX, reward XXX by friend. and AI the in in we AR viewed In times. the developers uses and of selfie into teams creator built have over on designed introduced key help million X to country world a several we a continues transform More the this AR build our to which Lenses expanded monetize To Lens reality creator from developer Snapchat. of AR ecosystem growth over A Augmented

we AI In in made QX, significant innovation. research strides and

Our capable seconds. iPhone developed yet compact seconds AI on efficient, a with images in high XX on-device team resolution Pro Max. in just groundbreaking just images parameters This is generating devices XXX of X.X only highly mobile million model model producing on

technology We in are this excited the coming bring into quarters. to production

Lens is been tool with a platform. these create with Lenses month to through launch, Lens text been to testament the customized an drive remarkable. have X.X, AR AI and The our Lenses a unlock potential Lens, response that This Studio creation Easy Within AI-powered nearly X,XXX XXX launched in to over has users published creativity engaging times. across engagement we by prompts. addition, using enabling In lenses and of of million Easy simplifies Snapchatters

product continued and serving and is the input opportunity. invest Looking critical enhancing on augmented innovating a our our initiatives these future are of experience on to believe We core reality. ahead, community we our expanding while focused to continuing monetization progress long-term in

past initiatives, utilization results privacy-safe and formats improved signals foundational models, ad we've progress to improved significant more drive of advertising our year, advertising the made larger partners. platform on including performant for X ML and Over better

strong contributor see Purchase demand We which Purchase Optimizations, to meaningful Pixel more growth. a for becoming continue line to top and are our App

year-over-year. grew For purchase revenue from app-based example, optimizations than more XX%

purchase install Optimization advertisers. in-app Our recent performance to expansion and X-X better of for driving is app

a example, of which increase cost platforms. digital and over wishlist install large install platform, For and an GoWish, X,XXX% outperforming in-app a app purchase app X-X global in per other installs in weeks, in decrease digital XX XX% leverage just in resulted

including significant creative to made we Generation with enhancements preferred new model CRM year, partners. past customization and product, our ranking integrations the Lead ad Over improvements,

a were decreasing we As that XX% a result, on Xx lead by in the over average. number of in while increase saw leads generated advertisers per for year-over-year QX, cost

social other example, Snap of XX% delivering emerge all objective platforms. to cost compared for its lower Idaho leveraged of media a and applications University programs conversions effective as undergraduate the undergraduate per lead XX% conversion platform, drive most to help For our saw generation the at

or more of Promote contributor Recently, revenue SMBs. we combination go-to-market content customers growth products, The Snapchat improved campaign the reach ad scaled in products, XXXX. performance, ad small improve Snap all ad launched to services and templates a optimized recommendations, automated audiences and on has devices. experience made to their our for business set-up adaptive SMB go-to-market and for buying within mobile medium-sized further and promote operations creative largest campaign performant new for their DR creators editing measure in-flight and simplified SMBs enabled strategy as to

We building and marketing leading ecosystem our with by partners. also tech in continue partnerships invest globally to partnership deepening

empowering including By betPARX, leveraging partnered they increase increase and performance. a automation performance-driven of a funnel Aygo-Tech, Snapchat key advertiser previous marketing targeting enhance with performance, a XX% advanced to ROAS is drive lower a to remain an engaged features, in their and in agency on example, gaming online Snapchat campaign purchases platform advertisers their of driver high-value, focused optimization audiences, we outcomes to automation. through believe achieved DR and granular compared Xx We For campaign.

optimization our budget instance, in ad which budgets campaign adjusts across automatically feature, be best sets we to testing results. QX, For will the new deliver smart

and demand advertising for focused We continuing brand products. funnel are upper to on performing innovative reaccelerating revenue deliver by

large collaboration, integrations for advanced by agencies measurement offering tools. are support brands enhanced and increased We prioritizing and platform

and measurement launched reach, with assess and metrics incremental partners Mediabrands plans a some our VideoAmp, we to has IPG our onboarded build and agency cross-screen with and Snapchat enabling year, media largest including first-to-market For to provide since Group, partnership example, This mind tools. last reach. optimization them of media agency company, partners, like Media initiative key measurement Omnicom with in planning dentsu,

audience to our to we insights ahead, unique Snapchat empower delivering actionable committed Looking advertising and remain leveraging ways the engages and partners our agencies. differentiated with

U.S. ways. The Snapchat promising visually delivering X and with helping In the with brands reach Sponsored it in than QX, ad million discover Snaps community on and we Snapchatters to locations Places product. a highlight Snaps delivering to reach Snaps impactful to leave our enable have Place advertisers locations, Map engage or initial those engage real Places XX Promoted more sponsored help to use single in results began to testing to lasting largest the and businesses XX impressions life. new impression. visit average places, day connect Sponsored placements, the with and unique new incremental in Sponsored older, making with Profiles Snapchatters, advertisers Promoted encouraging designed Snapchatters enable been Snap

saw compared campaign. For Xx Promoted Snap to who Snapchatters views the leveraged example, and Map Bell number Profile of when in on exposed Taco are Place the to the by Places QX increased not

partners average additional a we advertising Promoted Sponsored Snaps on plan to the and Pixel grew new for in and Sponsored Optimization to QX, begin In beginning in by Snaps QX, placement the limited Purchase roll number of In unique reached available objectives. increase Promoted out XX% while reach Snaps bidding for of Places as U.S. testing make Places delivering Snapchatters markets Sponsored also lower-funnel we to this

placements results our our meaningful deepen for drive partners We engagement to see excited with are and community. these

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

Derek Andersen

XX% revenue, QX. with relatively focused good XX group towards is and was continued growth by million reaching in $X.XX afternoon, among year-over-year. drove which subscription driven a which Advertising is to billion, revenue revenue Brand-oriented concentrated advertising year-over-year. segment that $X.XX X% Snapchat+ robust globally year-over-year SMB QX, build America. subscribers Thanks, $XXX more billion, as and year-over-year our increased Evan, revenue XX% from client we driven diversified clients, North everyone. by revenue up down total large We from In QX, small advertising performance-based more of advertising to was million weakness DR largely by reach primarily year-over-year, continue primarily XX% driven than Other was in growth in a revenue, doubled Snapchat+ business. up

operations. the region. North America, QX, grew in platform with client investments year-over-year, Europe Rest grew progress to year-over-year of year-over-year, with in In relatively demand the concentrated revenue America our go-to-market DR weaker and of this revenue upper relatively lower the revenue impact of being XX% and continued large North funnel in rate X% due driven grew by XX% growth ad world

largest XX% up prior was cost year-over-year. in the and in was XX% QX, in in investments to the large of within of million ramp million to cost the gross of XX% in in our Adjusted cost of costs to year-over-year revenue, driver $X.XX. quarter adjusted increase, full $X.XX XX% remaining margin of year. AI Infrastructure past the with in in quarter line QX range from components the line XX% $XXX of Infrastructure XX%. or in guidance was the and part were range within per The prior due revenue in X% $XXX up which is revenue quarter and QX, prior which QX, Adjusted of DAU year. expected were year and our structure is prior $X.XX the with ML over the costs

partially were in costs offset Adjusted operating research compliance-related costs, rates product-related year-over-year. compared as expenses X% $XXX costs QX, offset million to personnel litigation well wage costs. were partially year-over-year, full-time on Personnel legal by and impacts up headcount, including regulatory and the in by a credits and prior Lower by X% development X% costs in tax inflationary higher year-over-year driven lower year. payroll increases decline decreased as

reflecting or million reflecting share prior XX% the our and was $XXX financial Adjusted adjusted of to revenue higher $XXX revenue QX, of growth year-over-year of through year, expense QX in and that drive flow-through in investments discipline. and up revenue higher in continued EBITDA incremental QX operating the QX, million flowed Adjusted EBITDA to was EBITDA in our deliver seasonally performance. prioritization line improved top from

XX% QX the a of EBITDA, or prior adjusted of compared income improvement million reflects million net of million $XXX the million year, a prior stock-based improvement due a items incurred of and million in flow-through $XXX $XX $XX related loss favorable due reduction of compensation impacts losses restructuring in an incurred costs in year-over-year to year. million $XX business The net investment year. and QX primarily prior in nonrecurring to in in net million expenses, in $X achieved of the We $XXX to improvement the

million. cash QX, flow flow in operating cash Free was was $XXX $XXX million while

cash line Dilution $XXX and cash XX investments was with deliver to trailing was just flow our and X.X% sustained cash months, operating marketable $XXX the in as billion maturing in Over ended count million, growth securities QX. with million flow. top debt QX positive free share we cash to growth and year-over-year of in continue just flow $X.X hand was million in the on XXXX. balance or We $XX

the flow-through For primarily driven and million by year, $X.XX reflecting funnel direct generated of EBITDA, XX%. delivered EBITDA adjusted $XXX revenue, we adjusted in growth, representing revenue. full continued in We lower response billion progress XX% year-over-year

full cost key beginning came the below we with rate growth in the as we balance metrics Importantly, our within year XXXX guidance across at by managed business. our or of our investment realized all announced of structure revenue levels

the to we the given to made have in foundational our ahead established improvements particularly As ad in the our additional SMB productively scaling initiatives, we we see momentum our to business go-to-market we invest platform opportunities and segment. have look XXXX,

XXXX to make as plans optimism, financial Our alongside scale. investment commitment profitability we reflect towards strong this further for progress a

investments calibrate move revenue in growth we Just XXXX, our as did as year. we the to is through to intention our

range anticipate $X.XX to this per models the range low as of result, each recent a remaining in of As to out move quarter improvements be of quarter of cost and this planned progressing QX by year, components will in per adjusted larger infrastructure the to we from a we benefit estimate to We in refreshes. that estimate XX% toward and higher DAU even pricing revenue revenue near investments that as of XXXX. of the driven through will end of the model We we $X.XX at real-time XXXX. a combined starting range within end move XX% be cost

X% grow course the the to to wage to moderate with headcount by inflation. growing full-time over expect costs of related We XX% slightly faster due XXXX

adjusted to will We litigation also legal costs and higher anticipate growth. with associated that contribute expense operating compliance

that estimate be we result, a $X.XX expenses As year and billion. $X.X will billion operating between full adjusted

anticipate the expenses, an and growth, in For expense population approximately estimated growth to SBC $X.X we of related be resulting to $X.XX SBC line in billion billion. with full employee year

For QX specifically, anticipate on be built is approximately DAU guidance and of QX community the that our million we global in assumption continued growth QX. our will XXX

while for full guidance QX infrastructure QX We revenue to guidance full billion. the estimate percentage range revenue range other XX% per at cost of in of will revenue will cost within year $X.XX billion XX%. year of be range low Our all structure to is cost end be a as of the DAU $X.XXX our

operating legal-related For prior estimate we driven XX% growth and costs the to by expenses marketing into year. growth of higher XX% shift in QX, QX headcount, relative adjusted expense, to in of year-over-year a seasonal

to by In and committed date over $X approximately we anticipate wildfires the make to we have members QX commitments further time. may team support in and addition, recent impacted communities million

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

sustained to free we sustainable to for products revenue line scaling quarters meaningful growing diversifying among in our measurable profitability and remain strengthening focused the on streams positive connections responsible strategically investments growth our execute flow. our innovative DR ahead, and deliver to cash and foster we through our deliver meaningful advertising and our Snapchatters, ROAS and partners, continue community business drive that top serving As to

for joining and you our your Thank take now today, call we will questions.

Operator

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

Douglas Anmuth

with are XX out, the impact early any users? the advertiser Snap budget differences more now how user associated seeing rollout. Are Simple that talk any you you it's you or about million geos? than Can disruption results or around it's across And managing user rolled

Evan Spiegel

to thanks days. so engagement like with the question. much content metrics results, testing continuing see for encouraging We're Doug, active especially increased definitely

So more we content are experiences frequently. seeing our users enjoy casual more

I still big puzzle think of as that we're to on pertains there working are it rollout. pieces X sort

to those ad that The on in-feed unit. tiles our first typically which Snap in the was sponsored migrating is story migrating demand, to page, stories filled the or

a so advertising the be priority side. going that's to on And

And the still then of losses love. a there's to cohort to that layout our some able terms of we they back we're still publishers that And current and haven't in to really claw of come users tile-based for the engagement creators been Snapchat the for cohort. engagement, with who page seeing stories

going We've coming how work out on focused continuing got those ideas to in on solve of iterate to very on a and there. both the we're months. and can number So of weeks we pieces, rolling those we're

Operator

with next from comes Our question Greenfield LightShed Partners. Rich

Richard Greenfield

I've got questions. X kind of high-level

built ad mobile only platform subscription a the You're robust Snap+. that's business in

would the now almost driver far just I I of of it's how about we fastest the potential subscribers total what growth it's think revenues, terms but think and Evan, not are ARPU, your by like of in guess, and should course XX% couple AI you growth. of of everything of can given add an meaningful innovations product sort of weeks. the that's that going make terms DeepSeek, And in over the past this forward? and then with China-based more even happened features that

the you coming how think AI over how that impacts cost changing curve for the be curious year? cost and the Snap structure Just may

Evan Spiegel

And appearance and feeling Thanks, lot excited there's the app there. made been especially People changing definitely the like personalization Snapchat+, really of of the features. for for things. its them Rich, or Icon, about question. progress adoption, Yes. our those like On the sorts of we're is a really

for we the more can future just that core with on we're engagement loop focused is one the map make areas snapping how of we features. Snapchat+ the I development, at think as look road differentiated of and

think a be will also that year. this price I increases. So will for be And some priority there room

but Snapchat+. have value and they're lot I of the about plan a annual here folks month $X.XX indicated getting in from the think think is I a U.S.

another in longer avenue growing So terms be of ARPU the over term. that may

founder mean, been to innovation creativity. a long-term really to I think innovation pertains technology DeepSeek, would how can just drive and not the the inspiring just I the a As that the in moat there. say and lines it the I capital of made business along I -- first, see constraints really comment way it's is love

definitely so development going are our was going exciting commoditized And further that these are validates it efficient and become of an that time I to industry. the for think and continue obviously, But more a to to over lot view just models to become more run.

have So impact over hopefully, for that the will term. us longer some

I the of experimentation source think just right with sort phase now, their we're in early of some work. open

Operator

Our comes from next with Shmulik Bernstein. question Mark

Unknown Analyst

be where ] color provide answer resolution [ do Mark one we'll nimble, you dialing stores? from around app in expect in is year? This what think on the you you you've went And TikTok engagement soon. Shmulik. way hopefully, will dark Snapchat? advertiser seen Can about And simple since get does and on to an another behavior Louisa for TikTok it or priorities But it the way the on how most affect any

Evan Spiegel

the so ], much Louisa thanks [ question. for

were some think picked imperfect guess, -- experiment. changes of of sort I been up. the an They've I

diversifying hard engagement say across some time. can period app are creators for benefiting So is planning environment they many went various too the draw conclusions of thinking of the engagement that base would fan I goes contingency of I think the spend. to we platforms Snapchat. saw their and the with about how on overall our brief And lift the really uncertainty business. are who build I advertisers most very their we're trying from including same diversified certainly, for focused when that mean, not dark

helping support So priority and creators for this a uncertainty. period is just advertisers big we of during sure really us make

post in why creators improving And Snapchat. we creation XX% mean of I we've overall public actually to on posting for in a think working in QX, And month that X billion on time seeing spending we're flywheel. been particular, increase Snapchat. reached creators of the a that's I a lot number just

public the and ecosystem really in So growing nice is healthy content a way.

our And just it our we're focus going when strategy so to participation. there to continue and comes

Operator

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

Daniel Salmon

and just to into medium-sized small- more. dig love growth I'd Evan, advertisers

to in beyond a leverage the and of Snap manager Snap ad part expand letter it contributor a team a get Promote, bit big growth, build and biggest Could bit remains noted ad revenue Promote helping accounts you to what in full more the more just about start You talk that. was that is to XXXX little the them sophisticated little on the platform. you'd a go-to-market about products quarter Any other to really picking -- up you in Snap And other up straight group of ticking team bit that help last the talked see general how that into or help initiatives list highlight that ad strongly? sort that. facilitate little that goes Promote then to accelerate that you growth doing

Derek Andersen

Dan, it's Derek speaking. I'll take that one.

focus a here There's advertisers for of area seeing automated, get segment. make a to that the specifically with SMB a It's segment. for big year. last And go-to-market are we sort over combination easier been performant DR our ad done them that buying First, we are including products, what more the lot the are to really improvements made our a to we're SMB with SMB pleased the simplify ad the lot operations optimizing of we've elements work experience, it started. then of

Advertisers can in Tealium CAPI including, and Datahash, growing and segment, CAPI have to example, LiveRamp easy from fast performance integrate particular, really number the partners that it Snowflake, benefited improved for benefit and deliver. to from our integration in of the SMB make

more and in growth. a the from the of in the than noted, key for is segment advertiser also as within it right advertisers contributed SMB part this really QX. you Promote, to driver It easy folks the makes Snap to app started doubling active year-over-year get

got on build a robust the pretty of road To SMB momentum, way map for on clients. we've this enhancements

feature, budget results we'll will optimization Just across ad in the there, QX new smart budgets example sets adjust campaign advertiser. as to best deliver an which testing our the be automatically for

And so that's a big part of it.

but note deliver and of more help also the road just in ahead, the segment. investments in to not some looking map, at that in also to the investments we're the You specifically scale product our resources SMB year advertising

been hopefully, forward. about success little a that gives of and bit driving there investing you color what's So be going the we'll how

Operator

with Our comes next from Jefferies. question James Heaney

James Heaney

that QX What factored user early of Is it your quarter? just say of is Snapchat. right later occur if rollout -- and too we're Simple that to revenue growth now into results in kind to for and fair it could relates the it anything guide be or meaningfully to impacting as the maybe

Derek Andersen

question. for Thanks the

either around Simple those Snapchat, revenue some rolling learning it testing sort for and earlier, of As guide, really things to that the of there's pertains both mentioned Simple and Evan growth and user experience. we're really the Snapchat. around as and We're factored out of thoughtful, the that material into being to nothing optimize

And SMB about in more not in both in the terms earlier a global growth engagement recently. the either on how that I momentum thinking the the the seeing growth some the seeing we're about factor in quarter. of so coming the the community we're overall, or that It's of in strength the DR that mentioned the business growth really side revenue big really that's we're just and momentum

forward. going bit, continue a learn So little to hopefully, test we'll that and and helps

Operator

comes next Research. Shweta with Our Wolfe question from Khajuria

Shweta Khajuria

Okay.

Let try please. me two,

you across of trends, that verticals. on saw the you generally trends just brand is overall anything to demand that was strength? DR? both you see it one comment on specifically please that environment was Could or And in that demand first The for as out and muted then jumped terms you

And more X question how earlier, is most? year think those was your are the years, compute then about cost. how a about let you'd realize I or realize in them you compute costs asked next And the but efficiency me this time. try over to or you on gains one bit And thinking positioned it When gains? think you where years my X are second

Derek Andersen

speaking. we've Thanks question. for is best we're the This the specifically, a Derek market On product seeing out get verticals in is that results really really we great fit. there built verticals, what where

really of very And it's and rolled with been last in X.X new for broadening that you driver good Purchase and results optimization been there. the about DR example, and out health we the seeing year. a if Optimization, So and particular Pixel course, business CPG think, over retail, wellness out X-X that's big of the from we're since years

progress As market fit of then improvements to make the we testing other some availability, through out able to expand. we've see been rolling and the on product general optimizations,

number for really sort we midyear for example, based and of well architecture on seeing new stack and 'XX a of work verticals. app-based around that our we're added optimizations enhanced So ML more of product

verticals. So year-over-year work example, XX% we're our in purchase we than growth And and saw gaming, app financial seeing for our optimizations for e-com retail with services QX. more that

able really we're rolling improved progress more different as progress. more helps of and make so optimizations applicability make in stack that ad against to our verticals us more to out the And those expand

cloud-first ourselves from. these making to one And way the and think as seen out is base to our costs, And with really then things you're products efficient. allows over to about able to SKUs and the there. having be what efficiently able think really one, and Number wonderful quickly to use us then very quickly. move our go behind better really and cloud couple time. over we've that utilization to in I is of teams as our based what then optimize being it's us hard quickly, about partners not the compute see between code our model on getting that it to infrastructure I we migrate a fixed order to seeing possible. that On been come And long are more community good you're own at get what term is a of infrastructure innovating better being commitments roll And have off very things in

scale be grow for more [ seen us, SKUs own on and DAU thing as per our through helping recently. we that early own that then as would both ] our rates most improvements for really and commoditized, we've estimate able and that I what other seeing infra think our to and bring is the well. of they the to scale and in course, we're going QX results take pricing the as our And those you're advanced of advantage become in we're the is And able indicated QX down. we

with over we're the teams for be best using our optimize that possible structure our a most vigilant work is to SKUs the here key to to market efficient constantly to stack. just that time key and and in in have on the pricing So really order infrastructure pushing the code

Operator

Gawrelski Fargo. from comes Wells question next with Ken Our

Kenneth Gawrelski

Two questions, please, on the ad side.

First, talked new pressure kind funnel a that same see has brand food the in the do of continued there categories the opportunities category to Or and opportunities? broadened out? side? on upper beverage And side, little bit that similar? continuing past. from where potential see a upper Are roughly perspective? about funnel the the you there weakness you Are categories in Could there. on talk about are does you But brand that you

on The period lower in progress number doubling of of of increase one, for full to and is, Could side second may funnel rate the the question is about direct be those response getting on momentum the run on advertisers that nice there see advertisers. typical volume terms a that from continued the volume what talk because side, ramp great. the we kind side just increase? the then lower on funnel you And the should

Derek Andersen

the for thanks question. Ken,

specifically, to funnel the it and of weakness oriented business it funnel the upper advertisers. As of larger number source small the continues pertains upper a in be of there concentrated to relatively sort

positive that from agencies focused in I and product hearing we're accelerating one, we're progress in this products. Sponsored think Snaps and and on feedback have terms make focus early growth by to real realized incremental encouraged reach category those specifically, reignite the innovation, our advertisers of the on is, clients being there rollout able in our we're number of and the

partners to to ahead. of So looking solution more forward the available over that year course the making

We're enhanced integrations for and by platform brands support, and also prioritizing easier agencies client tools. support offering large measurement advanced

multichannel So reach. visibility as for and metrics agencies such to we example, with planning tools and the a have VideoAmp to incremental then provide launched agencies plans that to measurement reach, media key year, last build enable with partnership

keep we're to business the leaning focus the our road are leaning be so focus just those for our I and places going priority important improved And performance to of into the think able real into deliver those map. around diversifying advertisers. it's and innovations to that to order also maintain in

to think as category that So business, resources the invest of focused this to have direct a faster, Snapchat+, on think what over much SMB around on business down more doubling build the the around that the advertisers. that second course, into continuing and I our it's it's a growth the is sort diversified. to I of like in more seeing momentum dichotomy down between the important resilient, response continue we momentum important and of And we'd that your to seeing doubling with we're with we're question on category see ramps as And more growth and lower our funnel. time, performance-based so gets drivers think on that that the grow and customer we lot active we're about the seeing

exciting, smaller from is they account of start being once even grow that tool in customers, overall revenue, to able from an course, We're the come that driven advertisers. really folks medium is there. double then than which segment really But you or the to by excited that regard. to and growth into And is that see perspective again were Promote active as more the a advertiser very more seeing are going either Snap helpful out we in

really getting started. is there key about of the ease And

stack helping advertisers automated ability tooling improved choose measurement really solution a results, difference out that's makes of to where and realize helping So them and choose the the automated that's the because gate, rate of course, good ad the then, with the line, campaign advertisers going see DR returns up, right active us really going and right set and over to advertising the the them key expense retain we the need that's ROI, be on folks have be their continue in to that for their growing in time. order that delivering and top to grow spend growing to the optimization

upper So lower funnel. both hopefully, context seeing little there what we're that gives the a around on the you and

Operator

last comes Deepak Our Fitzgerald. Cantor with question from Mathivanan

Deepak Mathivanan

questions. product ad Two

DR DR iterations fast campaigns about of seeing drive companies Sponsored some Snaps? How ads. others deploy can First ramp strong. one We're the deploy think very for the products? do Meta that about looks to beyond you for strategy Snaps. of kind ad on relevance areas ad GPUs advertisers additional this second you are compute How And kind like The then seeing to Snap for reach and the adoption products? of on the Can improve like performance XXXX? go-to-market their Sponsored in talk and our you creative opportunity of year on this early

Evan Spiegel

the for much so Thanks Yes. question.

have and seeing really by the is there. execution Sponsored which we're for In been And feeling excited terms I thoughtful, why sort native really the for think of a really Snaps, has reasons of folks what creative snaps. about of experience made one we're is, who sponsored received organic advertisers

that a us, for high and look thoughtful we as maintains for Sponsored do that demand at think really we way want I to that's relevance. bar So a scaling for in out Snaps,

got holding our we've starting bar wide bring our a we'll creatives to relevance of and GBB, we be significant as product for advertisers Purchase quite Pixel So really auction. where and high range with a of that diversity

be and will We've to there other that. that expand the already some then, been preliminary doing first of from learn course, over we'll testing time. So step, GBBs and

focus investments machine to business, As our learning in it company. advertising for pertains is for certainly the this area huge our a

benefits models things smaller business like these experimenting lot ad of been corpus from investments drive techniques our making we've the models content need to business, But ads across is company. the Our definitely to recommend of community. business course, themes relevance. corpus really other benefit we even than broader addition our fresher to much the content our well sequence and a some other that larger platform as We're of ML advertising like in much improved and though, the to of with models

Operator

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

now disconnect. may You

Snap (SNAP) 4 Feb 252024 Q4 Earnings call transcript