SNAP 8-K

Snap Inc (SNAP)

8-K 2022-02-03 For: 2022-02-03

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Delaware	001-38017	45-5452795
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3000 31st Street Santa Monica, California		90405
(Address of Principal Executive Offices)		(Zip Code)

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

	SNAP INC.

Date: February 3, 2022	By:	/s/ Derek Andersen
		Derek Andersen
		Chief Financial Officer

	Three Months Ended December 31,						Percent			Twelve Months Ended December 31,						Percent
	2021			2020			Change			2021			2020			Change
(Unaudited)	(in thousands, except per share amounts)
Revenue	$	1,297,885		$	911,322			42	%	$	4,117,048		$	2,506,626			64	%
Operating loss	$	(25,127	)	$	(97,236	)		74	%	$	(702,069	)	$	(862,072	)		19	%
Net income (loss)	$	22,550		$	(113,099	)		120	%	$	(487,955	)	$	(944,839	)		48	%
Adjusted EBITDA⁽¹⁾	$	326,793		$	165,609			97	%	$	616,686		$	45,163			1,265	%
Net cash provided by (used in) operating activities	$	185,528		$	(52,545	)		453	%	$	292,880		$	(167,644	)		275	%
Free Cash Flow⁽²⁾	$	160,963		$	(68,992	)		333	%	$	223,005		$	(225,476	)		199	%
Diluted net income (loss) per share attributable to common stockholders	$	0.01		$	(0.08	)		118	%	$	(0.31	)	$	(0.65	)		52	%
Non-GAAP diluted net income (loss) per share⁽³⁾	$	0.22		$	0.09			135	%	$	0.50		$	(0.06	)		895	%

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2021			2020			2021			2020
Cash flows from operating activities
Net income (loss)	$	22,550		$	(113,099	)	$	(487,955	)	$	(944,839	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		34,863			22,811			119,141			86,744
Stock-based compensation		297,564			219,882			1,092,135			770,182
Amortization of debt discount and issuance costs		1,010			24,923			4,311			81,401
(Gains) losses on debt and equity securities, net		(65,525	)		—			(289,052	)		(10,250	)
Induced conversion expense related to convertible notes		—			—			41,538			—
Other		4,624			(18,958	)		8,643			2,963
Change in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable, net of allowance		(154,923	)		(212,508	)		(332,967	)		(255,818	)
Prepaid expenses and other current assets		(11,045	)		4,765			(26,607	)		(14,587	)
Operating lease right-of-use assets		12,041			10,633			47,258			38,940
Other assets		(5,476	)		(13,785	)		(10,916	)		(11,442	)
Accounts payable		36,149			8,926			53,579			20,374
Accrued expenses and other current liabilities		27,366			14,233			117,092			108,601
Operating lease liabilities		(14,029	)		(8,991	)		(49,294	)		(49,730	)
Other liabilities		359			8,623			5,974			9,817
Net cash provided by (used in) operating activities		185,528			(52,545	)		292,880			(167,644	)
Cash flows from investing activities
Purchases of property and equipment		(24,565	)		(16,447	)		(69,875	)		(57,832	)
Purchases of strategic investments		(7,650	)		(16,245	)		(41,160	)		(111,586	)
Cash paid for acquisitions, net of cash acquired		(134,324	)		(115,138	)		(310,915	)		(168,850	)
Purchases of marketable securities		(542,217	)		(947,707	)		(2,438,983	)		(3,524,599	)
Sales of marketable securities		12,000			16,117			379,555			389,974
Maturities of marketable securities		529,981			839,347			2,536,725			2,737,523
Other		(220	)		6,006			34,880			5,506
Net cash provided by (used in) investing activities		(166,995	)		(234,067	)		90,227			(729,864	)
Cash flows from financing activities
Proceeds from issuance of convertible notes, net of issuance costs		—			8,168			1,137,227			988,582
Purchase of capped calls		—			—			(86,825	)		(100,000	)
Proceeds from the exercise of stock options		2,916			—			14,671			34,209
Net cash provided by financing activities		2,916			8,168			1,065,073			922,791
Change in cash, cash equivalents, and restricted cash		21,449			(278,444	)		1,448,180			25,283
Cash, cash equivalents, and restricted cash, beginning of period		1,973,274			824,987			546,543			521,260
Cash, cash equivalents, and restricted cash, end of period	$	1,994,723		$	546,543		$	1,994,723		$	546,543
Supplemental disclosures
Cash paid for income taxes, net	$	9,105		$	1,013		$	25,333		$	3,692
Cash paid for interest	$	638		$	1,641		$	10,887		$	12,019
Supplemental disclosures of non-cash activities
Net change in accounts payable and accrued expenses and other current liabilities related to property and equipment additions	$	2,370		$	1,584		$	6,498		$	2,732

	December 31, 2021			September 30, 2021			December 31, 2020
	(unaudited)			(unaudited)
Assets
Current assets
Cash and cash equivalents	$	1,993,809		$	1,972,358		$	545,618
Marketable securities		1,699,076			1,509,463			1,991,922
Accounts receivable, net of allowance		1,068,873			913,539			744,288
Prepaid expenses and other current assets		92,244			76,669			56,147
Total current assets		4,854,002			4,472,029			3,337,975
Property and equipment, net		202,644			189,946			178,709
Operating lease right-of-use assets		322,252			291,181			269,728
Intangible assets, net		277,654			261,131			105,929
Goodwill		1,588,452			1,484,108			939,259
Other assets		291,302			412,770			192,638
Total assets	$	7,536,306		$	7,111,165		$	5,024,238
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable	$	125,282		$	91,769		$	71,908
Operating lease liabilities		52,396			56,191			41,077
Accrued expenses and other current liabilities		674,108			660,536			554,342
Total current liabilities		851,786			808,496			667,327
Convertible senior notes, net		2,253,087			2,252,079			1,675,169
Operating lease liabilities, noncurrent		325,509			292,506			287,292
Other liabilities		315,756			317,968			64,474
Total liabilities		3,746,138			3,671,049			2,694,262
Commitments and contingencies
Stockholders’ equity
Class A non-voting common stock, $0.00001 par value. 3,000,000 shares authorized, 1,364,887, 1,349,890, and 1,248,010 shares issued and outstanding at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.		14			13			12
Class B voting common stock, $0.00001 par value. 700,000 shares authorized, 22,769, 23,636, and 23,696 shares issued and outstanding at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.		—			—			—
Class C voting common stock, $0.00001 par value. 260,888 shares authorized, 231,627, 231,627, and 231,627 shares issued and outstanding at December 31, 2021, September 30, 2021, and December 31, 2020, respectively.		2			2			2
Additional paid-in capital		12,069,097			11,737,338			10,200,141
Accumulated other comprehensive income (loss)		5,521			9,779			21,363
Accumulated deficit		(8,284,466	)		(8,307,016	)		(7,891,542	)
Total stockholders’ equity		3,790,168			3,440,116			2,329,976
Total liabilities and stockholders’ equity	$	7,536,306		$	7,111,165		$	5,024,238

	Q3 2020			Q4 2020			Q1 2021			Q2 2021			Q3 2021			Q4 2021
Cash Flows and Shares
Net cash provided by (used in) operating activities	$	(54,828	)	$	(52,545	)	$	136,886		$	(101,086	)	$	71,552		$	185,528
Net cash provided by (used in) operating activities - YoY (year-over-year)		28	%		21	%		(2,079	)%		(52	)%		231	%		453	%
Net cash provided by (used in) operating activities - TTM (trailing twelve months)	$	(181,941	)	$	(167,644	)	$	(37,041	)	$	(71,573	)	$	54,807		$	292,880
Purchases of property and equipment	$	(14,727	)	$	(16,447	)	$	(10,851	)	$	(14,623	)	$	(19,836	)	$	(24,565	)
Purchases of property and equipment - YoY		86	%		81	%		—			(7	)%		35	%		49	%
Purchases of property and equipment - TTM	$	(50,478	)	$	(57,832	)	$	(57,792	)	$	(56,648	)	$	(61,757	)	$	(69,875	)
Free Cash Flow	$	(69,555	)	$	(68,992	)	$	126,035		$	(115,709	)	$	51,716		$	160,963
Free Cash Flow - YoY		17	%		9	%		2,835	%		(41	)%		174	%		333	%
Free Cash Flow - TTM	$	(232,419	)	$	(225,476	)	$	(94,833	)	$	(128,221	)	$	(6,950	)	$	223,005
Common shares outstanding		1,484,716			1,503,333			1,519,001			1,576,744			1,605,153			1,619,283
Common shares outstanding - YoY		7	%		6	%		6	%		8	%		8	%		8	%
Shares underlying stock-based awards		138,914			126,287			110,190			104,516			92,726			82,814
Shares underlying stock-based awards - YoY		(21	)%		(21	)%		(26	)%		(31	)%		(33	)%		(34	)%
Total common shares outstanding plus shares underlying stock-based awards		1,623,630			1,629,620			1,629,191			1,681,260			1,697,879			1,702,097
Total common shares outstanding plus shares underlying stock-based awards - YoY		4	%		3	%		3	%		4	%		5	%		4	%

Results of Operations
Revenue	$	678,668		$	911,322		$	769,584		$	982,108		$	1,067,471		$	1,297,885
Revenue - YoY		52	%		62	%		66	%		116	%		57	%		42	%
Revenue - TTM	$	2,156,193		$	2,506,626		$	2,813,732		$	3,341,682		$	3,730,485		$	4,117,048
Revenue by region⁽¹⁾
North America	$	492,928		$	659,163		$	552,972		$	701,735		$	786,917		$	932,077
North America - YoY		56	%		73	%		75	%		129	%		60	%		41	%
North America - TTM	$	1,497,347		$	1,774,481		$	2,011,803		$	2,406,798		$	2,700,787		$	2,973,701
Europe	$	102,480		$	141,608		$	113,619		$	152,268		$	153,121		$	208,912
Europe - YoY		49	%		54	%		49	%		94	%		49	%		48	%
Europe - TTM	$	349,486		$	399,221		$	436,342		$	509,975		$	560,616		$	627,920
Rest of World	$	83,260		$	110,551		$	102,993		$	128,105		$	127,433		$	156,896
Rest of World - YoY		35	%		27	%		46	%		86	%		53	%		42	%
Rest of World - TTM	$	309,360		$	332,924		$	365,587		$	424,909		$	469,082		$	515,427
Operating loss	$	(167,864	)	$	(97,236	)	$	(303,606	)	$	(192,512	)	$	(180,824	)	$	(25,127	)
Operating loss - YoY		27	%		62	%		(6	)%		38	%		(8	)%		74	%
Operating loss - Margin		(25	)%		(11	)%		(39	)%		(20	)%		(17	)%		(2	)%
Operating loss - TTM	$	(1,018,432	)	$	(862,072	)	$	(879,314	)	$	(761,218	)	$	(774,178	)	$	(702,069	)
Net income (loss)	$	(199,853	)	$	(113,099	)	$	(286,882	)	$	(151,664	)	$	(71,959	)	$	22,550
Net income (loss) - YoY		12	%		53	%		6	%		53	%		64	%		120	%
Net income (loss) - TTM	$	(1,072,444	)	$	(944,839	)	$	(925,785	)	$	(751,498	)	$	(623,604	)	$	(487,955	)
Adjusted EBITDA	$	56,361		$	165,609		$	(1,709	)	$	117,403		$	174,199		$	326,793
Adjusted EBITDA - YoY		233	%		291	%		98	%		223	%		209	%		97	%
Adjusted EBITDA - Margin⁽²⁾		8	%		18	%		—			12	%		16	%		25	%
Adjusted EBITDA - TTM	$	(78,139	)	$	45,163		$	124,691		$	337,664		$	455,502		$	616,686