#1Snap Inc. Q1 2021 Earnings Slides April 22, 2021#2Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements regarding guidance, our future results of operations or financial condition, business strategy and plans, user growth and engagement, product initiatives, and objectives of management for future operations, and the impact of COVID-19 on our business and the economy as a whole, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "going to," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," or "would" or the negative of these words or other similar terms or expressions. You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this presentation on our current expectations and projections about future events and trends, including our financial outlook and the ongoing COVID-19 pandemic, that we believe may affect our business, financial condition, results of operations, and prospects. These forward-looking statements are subject to risks, uncertainties, and other factors, including those described in the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent annual report on Form 10-K filed with the SEC, which is available on the SEC's website at www.sec.gov. Additional information will be made available in our quarterly report on Form 10-Q for the quarter ended March 31, 2021 and other filings that we make from time to time with the SEC. In addition, the forward-looking statements in this presentation relate only to events as of the date on which the statements are made and are based on information available to us as of the date of this presentation. We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, including future developments related to the COVID-19 pandemic, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments. This presentation includes certain non-GAAP financial measures. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors' overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures is provided in the appendix of this presentation. 2#3First Quarter Financial Highlights Revenue Operating Performance Cash ● ● ● Revenue increased 66% YoY to $770 million. Average revenue per user increased 36% YoY to $2.74. Adjusted gross margin¹ remained flat at 47% compared to Q1 2020. Operating margin improved to (39)%, compared to (62)% in Q1 2020. Net loss was $(287) million, compared to $(306) million in Q1 2020. Adjusted EBITDA was $(2) million, compared to $(81) million in Q1 2020. Adjusted EBITDA margin² was 0%, compared to (18)% in Q1 2020. Operating cash flow improved $131 million YoY to $137 million. Free Cash Flow improved $131 million YoY to $126 million. Ending cash and marketable securities increased $475 million YoY to $2.6 billion. ¹Excludes stock-based compensation expense and other payroll related tax expense, depreciation and amortization, and certain other non-cash or non-recurring items impacting net income (loss) from time to time. 2We define Adjusted EBITDA margin as Adjusted EBITDA divided by GAAP revenue. See Appendix for reconciliation of net loss to Adjusted EBITDA. Numbers throughout presentation may not foot due to rounding. 3#4Business Highlights We have an active, engaged community: DAUS were 280 million in Q1 2021, an increase of 51 million, or 22%, year-over-year. ● ● We invested and innovated in our content offerings: In March, over 125 million Snapchatters used Spotlight, our newest platform surfacing the most entertaining Snaps from our community. We launched Spotlight in three new countries--India, Mexico, and Brazil--making it live in a total of 14 countries. We launched a record 321 new channels in Q1 2021 with over 150 partners from 12 countries. Over 75 million Snapchatters watched beauty-related content each month on Discover in Q1 2021. Over 20 million viewers have watched "Ryan Doesn't Know," our new Snap Original starring Ryan Reynolds. We launched our first local market Snap Original, "Phone Swap", in India. ● ● ● ● DAUS increased sequentially and year-over-year in each of North America, Europe, and Rest of World. DAUS increased sequentially and year-over-year on both iOS and Android platforms. For the first time, the majority of our DAUs for the quarter were on the Android version of our application. We invested and innovated in our camera and augmented reality platforms: The number of Snapchatters engaging daily with our augmented reality Lenses grew more than 40% year-over-year in Q1 2021. Over 260 million Snapchatters engaged with Valentine's Day Lenses over a two-week period. Lunar New Year Lenses reached over 125 million users. ● We released Lens Studio 3.4 with improved capabilities around hand tracking, 3D multi-body tracking, and full body segmentation and a new asset library of 3D models, materials, scripts, and presets to help creators build Lenses. On average, Lenses created by our community via Lens Studio accounted for more than 50% of daily Lens views. 4#5Business Highlights (Continued) We strengthened our capabilities to drive improved outcomes for advertisers: We partnered with the fitness company Sweat to launch a full body Lens to track body movement while exercising in order to recommend optimal form to Snapchatters. ● ● ● ● We partnered with Gucci to launch the first sponsored LiDAR Lens which projected a 3D camping site around the user to promote the The North Face x Gucci collaboration. ● We partnered with American Eagle to launch a sponsored Lens which displayed different types of American Eagle jeans in AR and included specific fits, washes, and the option to click to purchase. We expanded our partner ecosystem: We announced a partnership with Samsung, which will feature popular Snapchat Lenses in the native camera application on select new smartphones. We launched a multi-year partnership with digital music distributor DistroKid allowing artists who control their own music publishing to instantly distribute on Snapchat. We announced a partnership with newspaper publisher Gannett, which will promote our advertising solutions to the company's network of more than 100,000 small business advertisers across the US and Canada. In March, we acquired Fit Analytics, a sizing technology company that powers solutions for retailers and brands. We launched our largest Camera Kit integration to date with Moj, a leading short-video platform in India, giving Moj creators access to Snapchat's Lens Carousel directly inside the Moj app. We launched Crazy Run in February as part of a multi-title partnership with game developer Gismart, and the game has already reached seven million players. LO 5#6Revenue by Geography (in millions, unaudited) GLOBAL $561 Q4'19 EUROPE 2 $92 Q4'19 $462 Q1'20 $76 Q1'20 $454 Q2'20 $79 Q2'20 +66% $679 Q3'20 +49% $102 Q3'20 $911 Q4'20 $142 Q4'20 $770 Q1'21 $114 Q1'21 NORTH AMERICA ¹ $382 Q4'19 $87 $316 REST OF WORLD Q4'19 Q1'20 $70 Q1'20 $307 Q2'20 $69 Q2'20 +75% $493 Q3'20 +46% $83 Q3'20 $659 Q4'20 Q1'21 REVENUE INCREASED 66% YOY TO $770 MILLION TRAILING TWELVE MONTHS REVENUE INCREASED 51% YOY TO $2.8 BILLION $111 Q4'20 Total revenue for geographic reporting is apportioned to each region based on our determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This allocation is consistent with how we determine ARPU. ¹North America includes Mexico, the Caribbean, and Central America. ŽEurope includes Russia and Turkey. Numbers throughout presentation may not foot due to rounding. $553 Q1'21 $103 Q1'21 6#7Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL 218 Q4'19 EUROPE 2 67 Q4'19 229 Q1'20 70 Q1'20 238 Q2'20 71 Q2'20 +22% 249 Q3'20 +9% 72 Q3'20 265 Q4'20 74 Q4'20 280 Q1'21 77 Q1'21 NORTH AMERICA ¹ 86 Q4'19 64 88 REST OF WORLD Q4'19 Q1'20 71 Q1'20 90 Q2'20 77 Q2'20 +5% GLOBAL DAU INCREASED 51 MILLION, OR 22%, YOY 90 Q3'20 +57% 87 Q3'20 92 Q4'20 99 Q4'20 93 Q1'21 111 Q1'21 We define a Daily Active User, or DAU, as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. We calculate average Daily Active Users for a particular quarter by adding the number of DAUs on each day of that quarter and dividing that sum by the number of days in that quarter. ¹North America includes Mexico, the Caribbean, and Central America. 2Europe includes Russia and Turkey. Numbers throughout presentation may not foot due to rounding. 7#8Average Revenue Per User (ARPU) (unaudited) GLOBAL $2.58 Q4'19 EUROPE 2 $1.37 Q4'19 $2.02 Q1'20 $1.09 Q1'20 $1.91 Q2'20 $1.10 Q2'20 +36% $2.73 Q3'20 +36% $1.43 Q3'20 $3.44 Q4'20 $1.91 Q4'20 $2.74 Q1'21 $1.48 Q1'21 NORTH AMERICA¹ $4.42 Q4'19 $1.35 $3.57 REST OF WORLD Q4'19 Q1'20 $1.00 Q1'20 $3.40 Q2'20 $0.89 Q2'20 +66% GLOBAL ARPU INCREASED 36% YOY NORTH AMERICA ARPU INCREASED 66% YOY $5.49 Q3'20 -7% $0.95 Q3'20 $7.19 Q4'20 $1.11 Q4'20 $5.94 Q1'21 $0.93 Q1'21 We define ARPU as quarterly revenue divided by the average Daily Active Users. For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on our determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. ¹North America includes Mexico, the Caribbean, and Central America. 2Europe includes Russia and Turkey. Numbers throughout presentation may not foot due to rounding. 8#9Adjusted Cost of Revenue¹ ADJUSTED COST OF REVENUE AS A % OF REVENUE 44% Q4'19 53% 56% Q1'20 53% 47% Q2'20 - 1 PPT 47% 42% Q3'20 41% 58% Q4'20 53% 59% Q1'21 COST OF REVENUE COMPOSITION² (in millions, unaudited) Infrastructure Costs Advertising Partner & Other Costs 47% Total Non-GAAP Exclusions¹ $247 $50 Total GAAP Cost of Revenue $40 $157 $253 Adjusted Gross Margin¹ ¹Excludes stock-based compensation expense and other payroll related tax expense, depreciation and amortization, and certain other non-cash or non-recurring items impacting net income (loss) from time to time. 2In Q1 2021, we updated the presentation of our cost of revenue composition. Numbers throughout presentation may not foot due to rounding. Q4'19 $6 $246 $47 $36 $163 Q1'20 $7 $253 $243 $46 $33 $163 Content & Developer Partner Costs Q2'20 $8 $250 ADJUSTED GROSS MARGIN¹ IMPROVED 1 PPT YOY +64% $285 $71 $40 $174 Q3'20 $8 $293 $377 $141 $54 $182 Q4'20 $9 $386 $404 $179 $51 $174 Q1'21 $8 $413 9#10Adjusted Operating Expenses¹ ADJUSTED OPERATING EXPENSES AS A % OF REVENUE 48% Q4'19 64% Q1'20 68% Q2'20 -17 PPT 50% Q3'20 40% Q4'20 48% Q1'21 Total Non-GAAP Exclusions1 OPERATING EXPENSES COMPOSITION (in millions, unaudited) Research and Development Sales and Marketing General and Administrative $271 $81 $96 $94 Q4'19 $290 $298 Total GAAP Operating Expenses $561 ¹Excludes stock-based compensation expense and other payroll related tax expense, depreciation and amortization and certain other non-cash or non-recurring items impacting net income (loss) from time to time. Refer to Appendix for a description of non-recurring items, including securities class actions legal charges. Numbers throughout presentation may not foot due to rounding. $102 $93 $103 Q1'20 $198 $495 $307 $87 $100 $120 Q2'20 $207 $514 +23% $338 $91 $111 $135 Q3'20 $216 $553 ADJUSTED OPERATING EXPENSES AS A % OF REVENUE DECREASED 17 PPT YOY $369 $104 $124 $141 Q4'20 $254 $623 $367 $107 $113 $147 Q1'21 $294 $661 10#11Net Loss & Adjusted EBITDA¹ (dollars in millions, unaudited) NET LOSS Q4'19 (43)% $(241) Net Loss Margin Q1'20 (66)% $(306) Q2'20 (72)% $(326) Q3'20 (29)% $(200) Q4'20 (12)% $(113) Q1'21 (37)% $(287) Adjusted EBITDA Leverage³ 2 We define Adjusted EBITDA margin as Adjusted EBITDA divided by GAAP revenue. ³We define Adjusted EBITDA leverage as the year-over-year change in Adjusted EBITDA divided by the year-over-year change in GAAP revenue. Numbers throughout presentation may not foot due to rounding. ADJUSTED EBITDA Q4'19 $42 8% 54% Adjusted EBITDA Margin² Q1'20 (18)% $(81) 30% Q2'20 (21)% $(96) (25)% Q3'20 ADJUSTED EBITDA WAS $(2) MILLION IN Q1 2021 TRAILING TWELVE MONTHS ADJUSTED EBITDA WAS $125 MILLION $56 8% 42% Q4'20 $166 18% 35% Q1'21 0% $(2) ¹We define Adjusted EBITDA as net income (loss), excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense and other payroll related tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time. See Appendix for reconciliation of net loss to Adjusted EBITDA. 26% 11#12Diluted Net Loss Per Share & Common Shares Outstanding Plus Shares Underlying Stock-Based Awards (in millions, except per share data, unaudited) DILUTED NET LOSS PER SHARE ¹ Q4'19 $(0.17) Q1'20 $(0.21) Q2'20 $(0.23) Q3'20 $(0.14) Q4'20 $(0.08) ¹Diluted net loss per share is calculated using weighted average shares outstanding during the period. 2Shares underlying stock-based awards include restricted stock units, restricted stock awards, and outstanding stock options. Numbers throughout presentation may not foot due to rounding. Q1'21 $(0.19) YOY Change COMMON SHARES OUTSTANDING PLUS SHARES UNDERLYING STOCK-BASED AWARDS Common Shares Outstanding Shares Underlying Stock-Based Awards² 1,576 160 1,416 Q4'19 4.6% 1,589 149 1,440 Q1'20 2.9% 1,616 153 1,464 Q2'20 DILUTED NET LOSS PER SHARE IMPROVED $0.02 YOY 4.1% 1,624 139 1,485 Q3'20 3.7% 1,630 127 1,503 Q4'20 3.5% 1,629 110 1,519 Q1'21 2.6% 12#13Operating Cash Flow and Free Cash Flow¹ (in millions, unaudited) FCF YOY Change Q4'19 $(67) $(9) $(76) 49% Q1'20 $6 $(11) $(5) 94% Q2'20 $(67) $(16) $(82) 20% Cash Provided by (Used in) Operating Activities Q3'20 $(55) $(15) $(70) 17% 'We define Free Cash Flow as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. See Appendix for reconciliation of net cash provided by (used in) operating activities to Free Cash Flow. Operating cash flow and free cash flow in Q4'20 includes a $98 million payment for non-recurring legal charges related to the securities class action in 2019. Numbers throughout presentation may not foot due to rounding. Q4'20 $(53) $(16) $(69) 9% FREE CASH FLOW IMPROVED $131 MILLION YOY, FIRST QUARTER OF POSITIVE FREE CASH FLOW AS A PUBLIC COMPANY Capital Expenditures Q1'21 $137 $(11) $126 2,835% 13#14Financial Guidance The following forward-looking statements reflect our expectations for the second quarter of 2021 as of April 22, 2021, and are subject to substantial uncertainty. This guidance assumes constant foreign currency rates and, among other things, that no business acquisitions, investments, restructurings, or legal settlements are concluded in the quarter. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed in "Forward-Looking Statements & Non-GAAP Financial Measures." Q2 2021 Outlook • Revenue is estimated to be between $820 million and $840 million, compared to $454 million in Q2 2020. ● • Adjusted EBITDA is estimated to be between $(20) million and breakeven, compared to $(96) million in Q2 2020. 14#15Appendix#16Non-GAAP Financial Measures Reconciliation (in thousands, unaudited) Free Cash Flow Reconciliation Net cash provided by (used in) operating activities Less: Purchases of property and equipment Free Cash Flow¹ Adjusted EBITDA Reconciliation Net loss Add (deduct): Interest income Interest expense Other (income) expense, net Income tax (benefit) expense Depreciation and amortization Stock-based compensation expense Payroll and other tax expense related to stock-based compensation Securities class actions legal charges Adjusted EBITDA² $ $ $ December 31, 2019 (66,842) $ (9,093) (75,935) $ December 31, 2019 $ (240,704) $ (10,463) 14,775 (17,536) 332 20,620 166,655 8,628 100,000 42,307 $ March 31, 2020 6,283 $ (10,891) (4,608) $ March 31, 2020 (305,936) $ (8,589) 15,113 12,389 659 21,204 172,049 11,874 (81,237) $ June 30, 2020 Three Months Ended (66,554) $ (15,767) (82,321) $ June 30, 2020 Three Months Ended (325,951) $ (4,768) 24,727 (3,575) (1,041) 20,925 186,171 7,942 September 30, 2020 (95,570) $ (54,828) $ (14,727) (69,555) $ September 30, 2020 (199,853) $ (2,801) 28,212 5,669 909 21,804 192,080 10,341 56,361 $ December 31, 2020 (52,545) $ (16,447) (68,992) $ December 31, 2020 (113,099) $ (1,969) 29,176 (29,471) 18,127 22,811 219,882 20,152 165,609 $ March 31, 2021 136,886 (10,851) 126,035 March 31, 2021 (286,882) (1,137) 5,031 (22,058) 1,440 23,498 237,073 41,326 (1,709) ¹ We define Free Cash Flow as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. 2We define Adjusted EBITDA as net income (loss), excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense and other payroll related tax expense; and certain other non-cash or non-recurring items impacting net income (loss) from time to time. Securities class actions legal charges related to a preliminary agreement to settle the securities class actions that arose following our IPO. Charges recorded are net of amounts directly covered by insurance. These charges are non-recurring and not reflective of underlying trends in our business. Numbers throughout presentation may not foot due to rounding. 1#17Non-GAAP Financial Measures Reconciliation (Continued) (in thousands, except per share amounts, unaudited) Non-GAAP net income (loss) reconciliation Net loss Amortization of intangible assets Stock-based compensation expense Payroll and other tax expense related to stock-based compensation Securities class actions legal charges Income tax adjustments Non-GAAP net income (loss)¹ Weighted-average common shares - Diluted Non-GAAP diluted net income (loss) per share reconciliation GAAP diluted net loss per share Non-GAAP adjustment to net loss Non-GAAP diluted net income (loss) per share¹ $ S $ S December 31, 2019 (240,704) $ 7,067 166,655 8,628 100,000 289 41,935 1,409,519 December 31, 2019 $ (0.17) $ 0.20 0.03 $ March 31, 2020 (305,936) $ 7,980 172,049 11,873 (59) (114,093) $ 1,426,305 March 31, 2020 (0.21) $ 0.13 (0.08) $ June 30, 2020 Three Months Ended (325,951) $ 7,378 186,171 7,942 86 (124,374) $ 1,447,022 June 30, 2020 September 30, 2020 Three Months Ended (0.23) $ 0.14 (0.09) $ (199,853) $ 8,422 192,080 10,341 388 11,378 1,466,420 September 30, 2020 $ (0.14) $ 0.15 0.01 $ December 31, 2020 (113,099) $ 9,727 219,882 20,152 (511) 136,151 $ 1,484,277 December 31, 2020 (0.08) $ 0.17 0.09 $ March 31, 2021 (286,882) 10,445 237,073 41,326 1,501,636 March 31, 2021 589 2,551 ¹ We define Non-GAAP Net income (loss) as net income (loss); excluding amortization of intangible assets; stock-based compensation expense and other payroll related tax expense; certain other non-cash or non-recurring items impacting net income (loss) from time to time; and related income tax adjustments. Non- recurring items include securities class actions legal charges described in the preceding slide. Non-GAAP Net Loss and weighted average diluted shares are then used to calculate Non-GAAP diluted net Income (loss) per share. Numbers throughout presentation may not foot due to rounding. (0.19) 0.19 0.00 2#18Note Regarding User Metrics and Other Data We define a Daily Active User, or DAU, as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. We calculate average DAUs for a particular quarter by adding the number of DAUs on each day of that quarter and dividing that sum by the number of days in that quarter. DAUs are broken out by geography because markets have different characteristics. We define average revenue per user, or ARPU, as quarterly revenue divided by the average DAUS. For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on our determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This allocation differs from our components of revenue disclosure in the notes to our consolidated financial statements, where revenue is based on the billing address of the advertising customer. Unless otherwise stated, statistical information regarding our users and their activities is determined by calculating the daily average of the selected activity for the most recently completed quarter. While these metrics are determined based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations globally. For example, there may be individuals who have unauthorized or multiple Snapchat accounts, even though we forbid that in our Terms of Service and implement measures to detect and suppress that behavior. We have not determined the number of such multiple accounts. Changes in our products, infrastructure, mobile operating systems, or metric tracking system, or the introduction of new products, may impact our ability to accurately determine active users or other metrics and we may not determine such inaccuracies promptly. We also believe that we don't capture all data regarding each of our active users. Technical issues may result in data not being recorded from every user's application. For example, because some Snapchat features can be used without internet connectivity, we may not count a DAU because we don't receive timely notice that a user has opened the Snapchat application. This undercounting may increase as we grow in Rest of World markets where users may have poor connectivity. We do not adjust our reported metrics to reflect this underreporting. We believe that we have adequate controls to collect user metrics, however, there is no uniform industry standard. We continually seek to identify these technical issues and improve both our accuracy and precision, including ensuring that our investors and others can understand the factors impacting our business, but these and new issues may continue in the future, including if there continues to be no uniform industry standard. Some of our demographic data may be incomplete or inaccurate. For example, because users self-report their dates of birth, our age-demographic data may differ from our users' actual ages. And because users who signed up for Snapchat before June 2013 were not asked to supply their date of birth, we may exclude those users from our age demographics or estimate their ages based on a sample of the self-reported ages that we do have. If our active users provide us with incorrect or incomplete information regarding their age or other attributes, then our estimates may prove inaccurate and fail to meet investor expectations. 3#19Note Regarding User Metrics and Other Data (Continued) In the past we have relied on third-party analytics providers to calculate our metrics, but today we rely primarily on our analytics platform that we developed and operate. We count a DAU only when a user opens the application and only once per user per day. We believe this methodology more accurately measures our user engagement. We have multiple pipelines of user data that we use to determine whether a user has opened the application during a particular day, and becoming a DAU. This provides redundancy in the event one pipeline of data were to become unavailable for technical reasons, and also gives us redundant data to help measure how users interact with our application. If we fail to maintain an effective analytics platform, our metrics calculations may be inaccurate. We regularly review, have adjusted in the past, and are likely in the future to adjust our processes for calculating our internal metrics to improve their accuracy. As a result of such adjustments, our DAUs or other metrics may not be comparable to those in prior periods. Our measures of DAUs may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology or data used. 4