Snap Inc. 2023 День инвестора — Итоги

Today we hosted an Investor Day for financial analysts and institutional investors. For those who were able to join in person or tune in, it was a pleasure to share our vision with you. 

You can find the full transcript and slides on our Investor Relations website here. Below you can find some key stats and a summary of each executive speaker’s presentation.

• Our community has now grown to over 750 million monthly active users.

• At our current growth rate, we see a path for Snapchat to reach over 1 billion people in the next two to three years.

• In North America, we have grown to over 150 million monthly active users.

• Snapchatters in the US open the app nearly 40 times per day.

• Over 60% of Snapchatters who open Snapchat each day create Snaps.

• Over 70% of Snapchatters who download Snapchat engage with AR on their first day in the app.

• Time spent per Spotlight viewer now meaningfully exceeds the time spent watching Friend Stories per Story viewer.

• In just over six months after launching, Snapchat+ has reached over 2.5 million subscribers and an annual revenue run rate of over $100 million.

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Evan Spiegel, co-founder and CEO, began the day by discussing Snap’s vision, progress, and plans as a business, as well as our long-term opportunity and potential for the company:

“We’re very grateful that you’re here, and we’re excited to share more about our vision for Snap. Our long-term opportunity is enormous, but we’re tackling a few significant challenges at the moment — the volatile macroeconomic environment, platform policy changes, and increasing competition.”

“Our goal today is to give you confidence in our ability to address those challenges by providing our plans and our progress to date. We are also looking forward to sharing why we are so excited about the longer-term potential for our business.”

“While Snap is still a small business compared to many large technology companies, we’ve made a lot of progress, growing revenues to $4.6 billion in 2022. Our large, hard-to-reach audience, brand-safe environment, and innovative advertising platform have made us a valuable partner for businesses that want to reach the next generation.” 

“Today, we’re pleased to share that our community has now grown to over 750 million monthly active users. We reach more than 75% of 13- to 34 year-olds in over 20 countries, with these countries representing over 50% of the advertising market. Over 100 million daily active users have joined Snapchat since our last Investor Day, with our community now totaling more than 375 million daily active users.”

“On average, over 5 billion Snaps are created every day, the best of which our community submits to Spotlight. We are pleased with the rapid growth we’re seeing in time spent per Spotlight viewer, which now meaningfully exceeds the time spent watching Friend Stories per Story viewer.”

“When Bobby and I first started building Snapchat, we wanted to make communication better. We started by making it visual and ephemeral, using disappearing images to bring life into digital conversations. Since then, we’ve grown our business by identifying everyday human behaviors and working to make them better through design, innovation, and technology.”

“We have everything we need to build a successful business over the long term. A large and growing community, an innovative and engaging product that continues to evolve, a strong balance sheet with a track record of positive free cash flow, and a long-term vision for what we believe will be the most meaningful advancement in computing the world has ever seen: augmented reality.”

Jacob Andreou, SVP of Growth, explained Snap's plans to continue growing our global audience, increase Snapchatter engagement, and continue to drive long-term retention on Snapchat.

“We continue to expand our reach in highly monetizable markets, such as North America, where we have grown to over 150 million monthly active users.”

“At our current growth rate, we see a path for Snapchat to reach over 1 billion people in the next two to three years.”

“Our service provides a sticky, compelling use case — fast, easy, fun visual communication with friends and family — and we have a proven track record of growing our Snapchat community… We think about growth in terms of three inputs: adding new Snapchatters, growing their engagement, and retaining them over time.”

“Onboarding new Snapchatters at this important moment in their lives supports the long-term health of our community — we’ve found that when Snapchatters discover our service early on in their smartphone usage and start Snapping with their close friends, they are far more likely to remain daily active users on Snapchat.”

“Today, Snapchatters over 35 are connecting with Snapchat more than ever before, with both DAU and content time spent growth for this cohort outpacing overall DAU and content time spent growth. This supplements our strong retention of Snapchatters as they naturally ‘age with’ us, growing our reach into older demographics.”

“For the five years after a Snapchatter's first year on our service, annualized retention is approximately 90% on average. During critical moments in life — like starting at a new school, moving out on their own, or getting a new job — Snapchat offers a fast and fun way to connect with friends and deepen existing relationships, leading to strong engagement and retention across our service over time.”

“We’ve built a large, growing, and engaged community in many of the most valuable geographies in the world, with a demographic that is difficult to reach elsewhere. We’ve done this by delivering durable value for our community and retaining them at high levels, and we still have a significant opportunity ahead to grow our community in both our core demographics and markets, and in newer ones.”

Jack Brody, VP of Product, gave a deep dive into the Snapchat product itself and how we’re always looking to improve the Snapchatter experience.

“By focusing on meaningful communication between friends, we set ourselves apart from other platforms that center almost entirely on content consumption. This unique approach leads to high frequency usage, deep engagement, and resilient retention. For example, here in the US, Snapchatters open Snapchat nearly 40 times per day, on average. [And] over 60% of Snapchatters who open Snapchat each day create Snaps.”

“Today, 88% of Snapchatters who Snap or Chat to a friend will use the app every day for the next 7 days. And in the last year, the number of conversations between unique pairs of friends has grown by over 30%.”

“Over the past 10 years, we’ve leveraged the success of visual communication as the foundation on which to build more and more value for our community. To do this, we’ve taken things people love, want, and need to do daily and worked to make them better through design and technology. By continuing to focus on daily behaviors, we’ve built a service that has incredibly deep engagement and drives long-term retention.”

“Snapchatters love our Map, and over 300 million use it monthly. And because we offer a social map, not a navigation map, we have a very high frequency of use. Daily Map users open the map 6 times per day, on average, to see what their friends are up to and meet up.”

“AR is a key driver of our community growth, increasingly drawing new users to Snapchat. We see that over 70% of Snapchatters who download Snapchat engage with AR during their first day in the app.”

“To continue to improve the value of Friend Stories, we are focused on three primary initiatives. First, we are consistently improving our ranking and recommendation models to surface the most relevant Stories for Snapchatters.” 

“Second, we’re investing in tools to make it easier for Snapchatters to post to their Stories, in order to increase overall story availability among friends. The number of Snapchatters with at least one Friend Story available to view has increased by over 15% year-over-year.”

“Finally, we’re constantly adding new features to provide additional value. We recently launched Communities, a product for private groups in which members can add friends and post to a shared Campus Story. We started with colleges and high schools and will be rolling it out to more communities over time. We’ve now onboarded 1,400 colleges in the US, and will continue expanding to more universities around the world.”

“In the US, time spent per viewer for both Creator Stories and Spotlight have grown by large double-digit percentages in Q4 compared to last year. This is why we’re doubling down on creators… Spotlight is relatively new, yet its growth has been astounding. Spotlight already reaches over 300 million Snapchatters per month. In Q4, total time spent watching Spotlight more than doubled from the year prior, and Spotlight submissions are up nearly 20% over the same time frame.”

“All of this has made us uniquely positioned to build a subscription service that offers new, exclusive, and experimental features directly to this extremely passionate audience. We’ve done this with Snapchat+, our $3.99-a-month subscription service. Launched last July, we already serve over 2.5 million subscribers.”

Kenny Mitchell, Chief Marketing Officer, highlighted why Snapchat is so powerful for marketers, when brands should share their stories on the platform, and how advertisers can make their moments break through.

Why: “We’re the antidote to traditional social media because we’ve built a place where we can freely share our perfectly imperfect moments with those closest to us.”

“Snapchat is an authentic environment. A private environment. And best of all, it’s a happy environment. In fact, a staggering 91% of Snapchatters are happy when using Snapchat, and it is the happiest platform compared to our competitors.”

“Snapchat is where real relationships create an environment where brands have real influence… When Snap Ads show up alongside the stories of your friends and family, or when you are sent a Snap from a friend with a Starbucks Lens, you are more receptive to that message and the recommendation hits a bit different. This is why Snapchat Ads provide increased relevance vs. other platforms, resulting in Snapchatters being 45% more likely to recommend brands and 34% more likely to purchase products advertised.”

When: “Three key moments break through on Snapchat: Launches, Tentpoles, and Everyday Moments.”

“Snapchat is the #1 platform where people enjoy sharing what their daily life is actually like — moments both big and small. In fact, nearly 40% of our top days on Snapchat in key markets aren't associated with a major holiday or moment. This connects well for brands with an always-on strategy. As our community shares their daily rhythms, brands too can bring joy to their potential consumers in small but impactful ways.”

How: “Put simply, brands advertise in two ways on Snapchat: with full-screen video formats and immersive augmented reality. These are attention-driving ad formats that also drive performance, and they are always high quality and engaging.”

“Take Snapchat’s vertical videos: They earn 5x more attention compared to the Social Video norm. That’s because Snapchat enables brands to tell their story in a brand-safe, curated, trustworthy environment where, as we noted, Snapchatters are happy and more receptive to messages.”

“Brands are finding real success [with our AR Lenses]. For example, Snapchat’s augmented reality Lenses garnered 4x more attention than Dentsu’s benchmark.”

“Snapchat is uniquely poised to help brands deliver on their long-term goals while delivering short-term results. We connect them to the right audience through a powerful and creative suite of advertising solutions. All that helps CMOs like me sleep better at night.”

Jerry Hunter, Chief Operating Officer, discussed in detail how we are evolving both engineering and sales to drive performance for our advertisers.

“Our priority for accelerating revenue growth is simple: to deliver measurable value and positive business outcomes for our advertising partners, with greater emphasis on direct response performance in the near term.”

“To gain share of the very large and growing pie of digital ad dollars, we’re going to focus on a few things… 1) provide advertisers with a large and engaged audience that is difficult to reach elsewhere, 2) offer compelling, performant ad formats in a brand-safe environment, and 3) provide an ad platform capable of optimizing campaigns to deliver attractive return on ad spend for our advertising partners.”

“We are investing aggressively in optimization, measurement, and ad ranking in particular, to drive measurable advertiser outcomes more efficiently. In this way, we believe we can increase CPM and increase ROI simultaneously.”

“Our primary focus in the near term is direct response advertising, or DR. Today, DR represents approximately two-thirds of our ad business and has continued to grow at a faster rate than our brand-oriented business. We believe DR is resilient because it provides the most measurable ROI for advertisers, who need a high degree of confidence in their spend.”

“​​To overcome the limitations imposed by the platform policy changes in a privacy-safe manner, we are updating and improving our ad platform across three key areas: 1) investing in observability and measurement, 2) improving engagement and conversions quality, and 3) increasing the volume of high-quality engagements and conversions.”

“Conversions API adoption has been growing nicely, and the majority of our revenue is now measured using signals from Conversions API, Pixel integrations, SKAN, or MMPs.”

“More than 30% of revenue is measured through Estimated Conversions, which encompasses both web-based DR advertisers and app-based DR advertisers via SKAN.”

“We are working to enhance the quality of engagement and conversions… These changes will provide advertisers with better last-click conversion performance, and Snapchatters with better post-click experiences. For example, for campaigns optimized toward engagement, reach, and leads, improved click quality has led to a 40% increase in post-click view time, and a nearly 15% rise in the Google Analytics session match rate. And our ML model updates designed to deliver more relevant ads has led to a more than 40% improvement in ad view time, and a 25% increase in non-bounce rates.” 

“To fully realize our AR advertising opportunity, we are now identifying ways to grow the ecosystem – partnering with media agencies like WPP, Publicis, and Denstu to find new, scaleable ways to integrate AR into brands’ go-to-market strategies. And we are making it easier than ever to create, manage, and deploy AR advertising – through acquisitions like Vertebrae, which provides a backend system to create, manage, and deploy 3D and AR assets.”

“As we think over the medium-term about continuing to grow our average revenue per user, we’ll be looking at different ways to help advertisers reach Snapchatters across more of our platforms, like the Snap Map, and, of course, opening up more inventory by monetizing Spotlight, which is growing very rapidly.”

“While the Engineering and Product teams have been bringing revenue-generating features to the market, we haven’t had a tight feedback loop with our customers. These are technical implementations that usually need tuning and modification to ensure our customers are getting the best results. By investing in processes and teams that make the feedback loop tight, we have been able to improve the product more quickly.”

“If there is one point you should take away, it is that we are evolving our ad platform, and while it’s early days, we are already seeing strong results.”

Bobby Murphy, co-founder and Chief Technology Officer, explained how we are accelerating our lead in augmented reality, how each of our investments in AR fit together, and why we are so excited about the future of AR.

“We believe augmented reality represents the next major shift in computing. AR allows us to weave digital experiences into the world around us, evolving the way we use computing in our daily lives.”

“Our AR products and services are driving major impact at scale today — on average, over 250 million people engage with augmented reality every single day on Snapchat. Our community plays with AR Lenses billions of times per day on average. And our AR creator community has built over 3 million Lenses using our Lens Studio software.”

“This unique position has allowed us to develop a lead in augmented reality over the last decade by leveraging one of the world’s most-used cameras, developing advanced technology and tools, and growing a vibrant AR creator ecosystem.”

“As we look ahead to the next five years, we'll build upon our early success with Camera Kit and create a business beyond Snapchat by allowing companies, developers, and entrepreneurs to solve their business needs through AR.”

“AR is a massive part of our mobile Snapchat experience today, and over time, we see even greater opportunities for new hardware to bring it into another dimension. This is what is driving our development of Spectacles, our wearable AR device. Wearables are an important long-term opportunity, and we are seeing incredible early progress, with super-engaged early creators, rapidly advancing technology, and an increasingly clear view of how to develop the best, most usable, and most compelling AR device.”

Derek Andersen, Chief Financial Officer, spoke about the financial progress we have made since our last Investor Day and discussed our plans to accelerate revenue growth for Snap in the years ahead. 

“Two years ago, we laid out a plan to achieve 60% gross margins over the medium term, or within two to three years. I am proud to share that we exceeded this goal ahead of schedule, and did so even while increasing our user growth and despite the headwinds on revenue.”

“We invested heavily in operating expenses in 2021 as topline growth remained elevated. But, as growth slowed in 2022, we moved quickly to reprioritize our cost structure to reduce our expected future annual adjusted operating costs by $450 million and our total cash cost structure by $500 million. We’ve now executed this reprioritization over the last six months and expect to realize the full benefit of these cost reductions in Q1 of 2023.”

“In 2021, we entered into exchange agreements with our debt holders to early convert more than $1.1 billion of our outstanding convertible notes into shares of Class A common stock when our shares were trading at approximately $64. This reduced our outstanding debt to approximately $3.7 billion as of now, with a weighted average coupon of just 24 basis points and weighted average maturity date more than four years into the future. Conservative and opportunistic management of our balance sheet, along with achieving positive free cash flow generation for two consecutive years, put us in a position to responsibly deploy $1.0 billion of capital to repurchase our own shares at historically low valuation levels. We repurchased shares equivalent to 6.7% of our common shares outstanding as of December 31, 2022. As a result of these efforts, the rate of growth in our fully diluted share count went from 3.4% in 2020, to 1.2% in 2021, to 0.2% in 2022 after adjusting for the early conversions I noted earlier.”

“As we look forward, we believe we have cleared a path to deliver Adjusted EBITDA profitability and positive FCF, even at low rates of topline revenue growth. While we are proud of the work we’ve done in this regard — and believe it is a critical input to establishing a higher floor under our enterprise value — it does not reflect our ambitions for our business. To achieve the full financial potential of our business, we must accelerate topline revenue growth.”

“In the near term, we are focused on improving our direct response advertising platform to better capitalize on our already-immense reach and depth of engagement. We are making significant progress in this regard through deeper integrations with larger clients, improved click-through performance, and retraining our models to focus on measurable performance.”

“Over the medium term, we believe that our track record of innovation positions us well to expand our ARPU opportunity and diversify our revenue sources over time. For example, Snapchat+ presents an entirely new source of revenue for Snap, and just six months since launch, it has reached more than 2.5 million subscribers and an annual revenue run rate of over $100 million.”

“Before we finish up, I’d like to take a step back and bring together the broader picture of what the team has presented today as well as some of the most critical points we hope you’ll take away with you.

• The first is that we are well on our way to building a community of 1 billion monthly active users, with our core product of visual communication delivering significant reach into some of the most valuable markets in the world, and a young demographic that is difficult to reach elsewhere.

• Second, we have reprioritized our investments to ensure that our top strategic priorities are fully funded and have a clear path to deliver Adjusted EBITDA profitability and positive free cash flow even at lower rates of revenue growth.

• Third, we are executing against our plan to improve our DR business in order to take share, even in a challenging operating environment.

• Fourth, we are innovating to drive growth in content engagement and are encouraged to see this strategy delivering clear results as demonstrated by the progress we are making with Spotlight, Creator Stories, and Community Stories.

• Fifth, we are making rapid progress toward diversifying our revenue sources, as evidenced by the remarkable early growth of Snapchat+.

• Last, we believe that AR will drive the next computing platform, and that our combination of leading AR technology, a well-established creator ecosystem, and a community deeply engaged with AR experiences, positions us well to be a leader in the next computing platform transition.”

“Before we wrap up our presentation today, I would like to leave you with one final thought, which is that the most critical input to delivering on all of the strategic initiatives we laid out here today is innovation. That includes innovating on our products, our advertising platform, and the future of AR. We believe that our demonstrated track record of innovation over the last 12 years positions us well to deliver on this for our community, our partners, and our investors.”

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This summary includes forward-looking statements. Any statement that refers to expectations, projections, guidance, or other characterizations of future events, is a forward-looking statement based on our assumptions 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 our filings with the SEC. 

This summary includes both GAAP and non-GAAP measures. Reconciliations between the two can be found in the materials on our Investor Relations website. Please also refer to our filings with the SEC to understand how we calculate our metrics.