Snap public IPO finally gives insight into Snapchat’s financials and user numbers

Snap Inc., the maker of visual messaging app Snapchat, has released its initial public offering (IPO) filing through the Securities and Exchange Commission. The document finally offers an insight into the workings of one of the most secretive tech companies.

Just over five years since its launch, the Snapchat app reached 158 million global daily active users as of December 31, 2016, a year-over-year growth of 48 percent. The majority of that figure is made up of North American users, which totaled 68 million in its fourth quarter 2016, an increase of 40 percent over the previous year. Europe is Snapchat’s second biggest region with 52 million users, and in the rest of the world the app has amassed 39 million users — although that figure was stagnant in its most recent quarter.

Snap has refrained from providing monthly active users (MAUs) in its filing. This could be because it does not want to attract unfavorable comparisons with bigger rivals Facebook (1.86 billion MAUs) and Instagram (600 million MAUs).

snapchat snap public ipo users

On average, Snapchatters share more than 2.5 billion snaps per day and visit the app around 18 times daily, spending 25 to 30 minutes on the app. In comparison, Facebook announced in April that users spend over 50 minutes across its suite of apps (including its flagship social network, Messenger, and Instagram — but not WhatsApp), which have an accumulative user base of almost 3.5 billion members. One thing is clear: Snapchat boasts an engaged fan base.

In terms of total revenue, Snap Inc. lists $404.5 million in 2016, up by over 600 percent from $58 million a year earlier. The company earned a net loss of $514.6 million last year.

“We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability,” it said in the filing.

The worrying revelation has already seen analysts compare the company to another platform that struggled to build upon the hype generated by its IPO, namely Twitter. “To me, Snap is Twitter 2.0 — a company with a good growth rate that is losing a ton of cash, coupled with a massive valuation,” Brian Hamilton, co-founder of private company analysis firm Sageworks, told CNN.

The vast majority of Snap’s revenue ($400 million) came from advertising, including its skippable, full-screen Snap ads and sponsored creative tools (sponsored lenses and geofilters).

Further breaking down its revenue, Snapchat earns on average a dollar from each of its 158 million global users. In its fourth quarter, Snapchat earned an average revenue of $2.15 per North American user — comparatively, its earnings from European users ($0.28) and the rest of the world ($0.15) during the same period didn’t even come close.

As its filing proves, the previous year was a huge period in Snap’s growth. In terms of product innovation it released over a dozen updates to its Snapchat app, including group chat, voice and video calling, Bitmoji, and Memories, among others.

snapchat spectacles guide
Snap’s first hardware device, dubbed “Spectacles”

In September, Snap unveiled its first-ever hardware device in the form of its snap-recording sunglasses: Spectacles. At the same time, it began branding itself as a “camera company” focused on “reinventing the camera.”

Snap also aggressively expanded its workforce in 2016, opening new offices in London, Los Angeles, and China (despite being banned in the country). By the end of 2016, Snap employed 1,859 staff members.

Snap is still expected to go public in March, with a valuation estimated between $25-$30 billion, making it the highest U.S. tech IPO since Chinese e-commerce giant Alibaba Group Holding Ltd. debuted at $168 billion in 2014.

The company, co-founded in 2011 by Evan Spiegel, Bobby Murphy and Reggie Brown, hopes to raise $3 billion from the nonvoting shares it is offering as part of its IPO. It fittingly chose “SNAP” as its NYSE ticker symbol.

Product Review

With both style and substance, the ‘budget’ iPhone XR is the iPhone to buy

Apple’s iPhone XS and XS Max are flagship smartphones that do everything and anything. The iPhone XR is more interesting, because while it looks as futuristic as its siblings, it’s also less expensive and more stylish.
Product Review

It's got game. But the Razer Phone 2 is still crippled by its camera

The Razer Phone 2 will impress with its gaming prowess and 120Hz screen. But if you care at all about taking pictures on your phone, skip it. While Razer has improved the camera, it’s still short of the competition.

Huawei and Leica’s monochrome lens is dead, so we celebrate its life

The Huawei Mate 20 and Mate 20 Pro do not have a dedicated monochrome camera lens, unlike the P20 Pro, and various Huawei and Leica phones before it. It's the end of an era, and also the start of a new one, as Leica has worked on its…
Social Media

Twitter has sorted out those weird notifications it was sending

Twitter started churning out weird notifications of seemingly nonsensical letters and numbers to many of its users on Tuesday morning. The bizarre incident even prompted Twitter boss Jack Dorsey to get involved.
Smart Home

Amazon has an even dozen new smart devices. Here’s how to order

Amazon's hardware announcement meant a whole bunch of new Amazon Alexa gadgets. From a microwave to stereo equipment, here is the complete list of devices that were announced, as well as reviews for some.

The best accounting software for your small business

Small business owners looking for accounting software have a variety of options at their disposal. And this guide will help them find the best solutions, from Quickbooks Online and Freshbooks to AccountEdge and Zoho Books.
Home Theater

Facebook might be planning a streaming box for your TV that watches you back

Facebook is reportedly working on a piece of streaming media hardware for your living room with a built-in camera for video calls, something people may not want given the company's recent controversies.

Goodbye, Essential? Android creator’s startup cuts nearly a third of its staff

Essential has cut as much as 30 percent of its workforce, suggesting that it may be in more trouble than previously thought. The news comes a few months after the company reportedly canceled a follow-up to the Essential Phone.

Apple’s 2020 MacBooks could ditch Intel processors, arrive with ‘ARM Inside’

If you're buying a MacBook in 2020, be on the lookout for a new "ARM Inside" banner. Apple is reportedly working on transitioning away from Intel processors for its MacOS lineup in favor of new custom A-series ARM-based silicon.
Movies & TV

MoviePass saga: Parent company investigated for allegedly misleading investors

Troubled subscription-based movie service MoviePass is making headlines on a daily basis lately, and not in a good way. Here's a timeline of events for the company once described as Netflix for movie theaters.
Social Media

Some major Facebook investors want to oust Zuckerberg after scandals

After multiple scandals, Facebook investors are proposing founder and CEO Mark Zuckerberg leave his position as chairman. The group says that making the position independent would remove Zuckerberg's "unchecked corporate power."

Here are the 5 best Salesforce alternatives and competitors

Salesforce has taken the customer relationship management, or CRM, world by storm. But these five alternatives, including Freshsales, Microsoft Dynamics 365, and Zoho CRM, are solid options if you're looking beyond Salesforce.

Google may charge up to $40 per Android device for app suite following EU ruling

Google announced that it will be charging Android device manufacturers in Europe a licensing fee to use its apps and services. The announcement is part of an effort to comply with new European Commission regulations.
Smart Home

SiriusXM, Amazon team up for two Echo Dot deals with freebies

Amazon and SiriusXM partnered on two joint promotions. New SiriusXM subscribers can receive a free Amazon Echo Dot. People who already own an Echo device can sign up for new SiriusXM subscription with the first three months free.