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What changed in Snap Inc's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Snap Inc's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+445 added−394 removedSource: 10-K (2025-02-05) vs 10-K (2024-02-07)

Top changes in Snap Inc's 2024 10-K

445 paragraphs added · 394 removed · 341 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeInformation about Segment and Geographic Revenue Information about segment and geographic revenue is set forth in Notes 1 and 2 of the notes to our consolidated financial statements included in “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. Available Information Our website address is www.snap.com.
Biggest changeFor additional information about government regulation applicable to our business, see “Risk Factors” in Part I, Item 1A and “Legal Proceedings” in Part I, Item 3 in this Annual Report on Form 10-K. 11 Table of Contents Information about Geographic Revenue and Segments Information about geographic revenue and segments is set forth in Notes 2 and 19, respectively, of the notes to our consolidated financial statements included in “Financial Statements and Supplementary Data” in Part II, Item 8 in this Annual Report on Form 10-K.
Government Regulation We are subject to many federal, state, local, and foreign laws and regulations, including those related to privacy, rights of publicity, data protection, content regulation, intellectual property, health and safety, competition, protection of minors, consumer protection, employment, money transmission, import and export restrictions, gift cards, electronic funds transfers, anti-money laundering, advertising, algorithms, encryption, and taxation.
Government Regulation We are subject to many federal, state, local, and foreign laws and regulations, including those related to advertising, algorithms, anti-money laundering, competition, consumer protection, content regulation, data protection, electronic funds transfers, employment, encryption, gift cards, health and safety, import and export restrictions, intellectual property, communication, money transmission, privacy, protection of minors, rights of publicity, and taxation.
We focus on the health and well-being of our employees through programs and benefits that support their physical, emotional, and financial fitness. To attract and retain the best talent, we aim to offer challenging work in an environment that enables our employees to have a direct meaningful contribution to new and exciting projects.
We focus on the health and well-being of our employees through programs and benefits that support their physical, emotional, and financial fitness. To attract and retain the best talent, we offer challenging work in an environment that enables our employees to have a direct meaningful contribution to new and exciting projects.
It is possible that certain governments may seek to block or limit our products or otherwise impose other restrictions that may affect the accessibility or usability of any or all our products for an extended period of time or indefinitely. Not all of our products are available in all locations and may not be due to such laws and regulations.
It is possible that certain governments may seek to block or limit our products or otherwise impose other restrictions that may affect the accessibility or usability of any or all our products for an extended period of time or indefinitely. Due to such laws and regulations, our products may not be available in all locations.
We also provide developers a turnkey suite of tools and services that enable them to create AR Lenses and track the performance of those through analytics. Finally, developers can bring an inclusive mode of identity and expression to their apps and games with our Bitmoji for Developers APIs and SDKs.
We also provide developers a turnkey suite of tools and services that enable them to create AR Lenses and track the performance of those through analytics. Finally, developers can bring an inclusive mode of identity and expression to their apps and games with our Bitmoji for Developers APIs.
AR creators can use Lens Studio, our powerful desktop application designed for creators and developers, to build augmented reality experiences for Snapchatters. Spotlight creators can utilize our content creation tools to reach millions of Snapchatters and build their businesses through various monetization opportunities. Our Creator Marketplace connects both AR and Spotlight creators directly with our advertising partners.
AR creators can use Lens Studio, our powerful desktop application designed for creators and developers, to build Lenses and AR experiences for Snapchatters. Spotlight creators can utilize our content creation tools to reach millions of Snapchatters and build their businesses through various monetization opportunities. Our Creator Marketplace connects both AR and Spotlight creators directly with our advertising partners.
We also offer Public Profiles, as a way for our creator community and our advertising partners to memorialize and scale their content and AR Lenses on our platform. Spotlight : Spotlight showcases the best of Snapchat, helping people discover new creators and content in a personalized way.
We also offer Public Profiles as a way for our creator community and our advertising partners to memorialize and scale their content and AR Lenses on our platform. 6 Table of Contents Spotlight : Spotlight showcases the best of Snapchat, helping people discover new creators and content in a personalized way.
AR Lenses can be memorialized on Snapchat, through Public Profiles that aggregate content and lenses in a single, easy to find place. 7 Table of Contents Snap Ads : We let advertisers tell their stories the same way our users do, using full screen videos with sound.
AR Lenses can be memorialized on Snapchat, through Public Profiles that aggregate content and lenses in a single, easy to find place. Snap Ads : We let advertisers tell their stories the same way our users do, using full screen videos with sound.
The Discover section of this tab displays curated content based on a Snapchatter’s subscriptions and interests, and features news and 6 Table of Contents entertainment from both our creator community and publisher partners.
The Discover section of this tab displays curated content based on a Snapchatter’s subscriptions and interests, and features news and entertainment from both our creator community and publisher partners.
These ads appear within Snapchat’s curated content. Campaign Management and Delivery : We aim to continually improve the way these ad formats are purchased and delivered. We have invested heavily to build our self-serve advertising platform, which provides automated, sophisticated, and scalable ad buying and campaign management.
Campaign Management and Delivery : We aim to continually improve the way these ad formats are purchased and delivered. We have invested heavily to build our self-serve advertising platform, which provides automated, sophisticated, and scalable ad buying and campaign management.
We use Snapchat constantly, both at work and in our personal lives, and we handle user information with the same care that we want for our family, our friends, and ourselves. Competition We compete with other companies in every aspect of our business, particularly with companies that focus on mobile engagement and advertising.
We handle user information with the same care that we want for our family, our friends, and ourselves. Competition We compete with other companies in every aspect of our business, particularly with companies that focus on mobile engagement and advertising.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are filed with the SEC.
Available Information Our website address is www.snap.com. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to these reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act are filed with the SEC.
Stories : Stories are a fun way to stay connected with people you care most about. Stories feature content from a Snapchatter’s friends, our community, and our content partners. Friends Stories allow our community to express themselves in narrative form through photos and videos, shown in chronological order, to their friends.
Stories : Stories are a fun way to stay connected, and feature content from friends, our community, and our content partners. Friends Stories allow Snapchatters to express themselves in narrative form through photos and videos, shown in chronological order, to their friends.
Here we surface the most entertaining Snaps from our community all in one place, which becomes tailored to each Snapchatter over time based on their preferences and favorites. The Trending page allows Snapchatters to discover and engage with popular topics and genres. Additionally, we offer Snapchat+, our subscription product that provides subscribers access to exclusive, experimental, and pre-release features.
Here we surface the most entertaining Snaps from our community all in one place, which becomes tailored to each Snapchatter over time based on their preferences and favorites. The Trending page allows Snapchatters to discover and engage with popular topics and genres.
As of December 31, 2023, we had 5,289 full-time employees, of whom approximately 54% are in engineering roles involved in the design, development, support, and manufacture of new and existing products and processes. Climate Change: Our commitment to combating climate change remains unchanged. In 2021, we adopted science-based emissions reduction targets approved by the Science Based Targets Initiative.
As of December 31, 2024, we had 4,911 full-time employees, of whom approximately 52% are in engineering roles involved in the design, development, support, and manufacture of new and existing products and processes. Climate Change: Our commitment to combating climate change remains unchanged.
We believe that creating an inclusive environment where team members can grow, develop, and be their true selves is critical to attracting and retaining talent. Our compensation philosophies also align to that belief.
Human Capital : As part of our human capital resource objectives, we seek to recruit, retain, and incentivize our highly talented existing and future employees. We believe that creating an inclusive environment where team members can grow, develop, and be their true selves is critical to attracting and retaining talent. Our compensation philosophies also align to that belief.
Somewhere along the way, social media—by prioritizing virality and permanence—sapped conversations of this valuable context and choice. When we began to communicate online, we lost some of what made communication great: spontaneity, emotion, honesty—the full range of human expression that makes us human in the first place. We don’t think digital communication has to be this way.
When we began to communicate online, we lost some of what made communication great: spontaneity, emotion, honesty—the full range of human expression that makes us human in the first place. 9 Table of Contents We don’t think digital communication has to be this way. That’s why choice matters.
These partnerships have allowed us to scale quickly without upfront physical infrastructure costs, allowing us to focus our efforts on product innovation.
We currently partner with third party providers to support the infrastructure for our growing needs. These partnerships have allowed us to scale quickly without upfront physical infrastructure costs, allowing us to focus our efforts on product innovation.
In December 2014, the Federal Trade Commission resolved an investigation into some of our early practices by handing down a final order. That order requires, among other things, that we establish a robust privacy program to govern how we treat user data. During the 20-year lifespan of the order, we must complete biennial independent privacy audits.
That order requires, among other things, that we establish a robust privacy program to govern how we treat user data. During the 20-year lifespan of the order, we must complete biennial independent privacy audits.
Such reports and other information filed or furnished by us with the SEC are available free of charge on our website at investor.snap.com when such reports are available on the SEC’s website.
Such reports and other information filed or furnished by us with the SEC are available free of charge on our website at investor.snap.com when such reports are available on the SEC’s website. We use our website, including investor.snap.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.
Publisher partners can expand their audiences and monetize content through our Discover platform. In addition, we work with various telecommunications providers and original equipment manufacturers, particularly as we build our presence in new markets. Our Advertising Products We connect both brand and direct response advertisers to Snapchatters globally.
In addition, we work with various telecommunications providers and original equipment manufacturers, particularly as we build our presence in new markets. Our Advertising Products We connect both brand and direct response advertisers to Snapchatters globally. Our ad products are built on the same foundation that makes our consumer products successful.
We also enter into confidentiality and invention assignment agreements with our employees and contractors and sign confidentiality agreements with third parties.
We also enter into confidentiality and invention assignment agreements with our employees and 10 Table of Contents contractors and sign confidentiality agreements with third parties. Our internal controls are designed to restrict access to proprietary technology.
Our Partner Ecosystem Many elements and features of Snapchat are enhanced by our expansive partner ecosystem that includes developers, creators, publishers, and advertisers, among others.
Spectacles are available to professional and hobbyist developers through our Spectacle Developer Program to create AR experiences through Lens Studio, our free AR development and distribution tool. Our Partner Ecosystem Many elements and features of Snapchat are enhanced by our expansive partner ecosystem that includes developers, creators, publishers, and advertisers, among others.
For starters, we’ve written our Privacy Policy in plain language because we think it’s important that everyone understands exactly how we handle their information. Otherwise, it’s hard to make informed choices about how you communicate. We’ve also created a robust Safety and Privacy Hub where we show that context and choice are more than talking points.
When you read our Privacy Policy, we hope that you’ll notice how much we care about the integrity of personal communication. For starters, we’ve written our Privacy Policy in plain language because we think it’s important that everyone understands exactly how we handle their information. Otherwise, it’s hard to make informed choices about how you communicate.
Employees and Culture We seek to be a force for good through our products, our work to strengthen our communities, our efforts to make a positive impact on the planet, and our inclusive workplace. 8 Table of Contents Supporting Our Team : Our values at Snap are being kind, smart, and creative, and we put those values into action through how we support our team and how our team supports one another.
Employees and Culture We seek to be a force for good through our products, our work to strengthen our communities, our efforts to make a positive impact on the planet, and our inclusive workplace.
These laws and regulations are constantly evolving and may be interpreted, applied, created, or amended in a manner that could harm our business.
These laws and regulations are constantly evolving and may be interpreted, applied, created, or amended in a manner that could harm our business. Like other companies in our industry, we face increasingly heightened scrutiny from both the United States and foreign governments with respect to our compliance with laws and regulations.
While Snaps are deleted by default to mimic real-life conversations, users can save their creativity through a searchable collection of Memories stored on both their Snapchat account and their mobile device. A user can also create Snaps on our wearable devices, Spectacles. Spectacles connect seamlessly with Snapchat and capture photos and video from a human perspective.
While Snaps are deleted by default to mimic real-life conversations, Snapchatters can save their creativity through a searchable collection of Memories stored on both their Snapchat account and their mobile device. Visual Messaging : Visual Messaging is a fast, fun way to communicate with friends and family using AR, video, voice, messaging, and creative tools.
Advertising Technology : We constantly develop and expand our advertising products and technology. In an effort to provide a strong and scalable return on investment to our advertisers, our advertising technology roadmap centers around improving our delivery framework, measurement capabilities, and self-serve tools.
In an effort to provide a strong and scalable return on investment to our advertisers, our advertising technology roadmap centers around improving our delivery framework, measurement capabilities, and self-serve tools. 8 Table of Contents Large-scale Infrastructure : We spend considerable resources and investment on the underlying architecture that powers our products, such as optimizing the delivery of billions of videos to hundreds of millions of people around the world every day.
We provide monetizable opportunities through programs like the Snap Lens Network and Ghost, which provide grants to support AR product development across many industries. We also support our content creator community through a number of programs, including advertising revenue sharing on our mid-roll advertisements in Snap Stars ’ Stories.
We also support our content creator community through a number of programs, including advertising revenue sharing on our mid-roll advertisements in Snap Stars ’ Stories and Spotlight. Publisher partners can expand their audiences and monetize content through our Discover section.
That’s why choice matters. We build products and services that emphasize the context of a conversation—who, when, what, and where something is being said.
We build products and services that emphasize the context of a conversation—who, when, what, and where something is being said. If you don’t have the autonomy to shape the context of a conversation, the conversation will simply be shaped by the permanent feeds that homogenize online conversations.
Our internal controls are designed to restrict access to proprietary technology. 10 Table of Contents As of December 31, 2023, we had approximately 3,174 issued patents and approximately 3,111 filed patent applications in the United States and foreign countries relating to our camera platform and other technologies. Our issued patents will expire between 2024 and 2047.
As of December 31, 2024, we had approximately 4,169 issued patents and approximately 3,263 filed patent applications in the United States and foreign countries relating to our Snapchat, Lens Studio, Spectacles and Snap OS products, augmented reality, AI and machine learning, and other technologies. Our issued patents will expire between 2025 and 2047.
We use our website, including investor.snap.com, as a means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD. 11 Table of Contents Information contained in, or accessible through, the websites referred to in this Annual Report on Form 10-K is not incorporated into this filing.
Information contained in, or accessible through, the websites referred to in this Annual Report on Form 10-K is not incorporated into this filing. Further, our references to website addresses are only as inactive textual references. 12 Table of Contents
This report is excerpted in our broader CitizenSnap Report that details the work we’re doing to support our communities, our planet, and our team, and is available on our website at www.snap.com. Human Capital : As part of our human capital resource objectives, we seek to recruit, retain, and incentivize our highly talented existing and future employees.
This report outlines our beliefs around the idea that an inclusive workplace and inclusive products are central to achieving that purpose. This report is excerpted in our broader CitizenSnap Report that details the work we’re doing to support our communities, our planet, and our team, and is available on our website at www.snap.com.
Violating existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively affect our financial condition and results of operations. Furthermore, foreign data protection, privacy, consumer protection, content regulation, and other laws and regulations are often more restrictive than those in the United States.
Any enforcement action related to this matter, or any violation of existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could negatively affect our financial condition and results of operations.
Our ad products are built on the same foundation that makes our consumer products successful. This means that we can take the things we learn while creating our consumer products and apply them to building innovative and engaging advertising products familiar to our community.
This means that we can take the things we learn while creating our consumer products and apply them to building innovative and engaging advertising products familiar to our community. 7 Table of Contents AR Ads : Advertising through Snap’s AR tools unlocks the ability to reach a unique audience in a highly differentiated way through AR Lenses.
In 2023 and 2022, we purchased renewable energy certificates covering all electricity consumed in our global operations for the years ended December 31, 2022 and 2021, respectively. Our Commitment to Privacy Our approach to privacy is simple: Be upfront, offer choices, and never forget that our community comes first.
Since then, we’ve maintained our carbon-neutral status each year through the purchase of carbon offsets for emissions attributable to us. Our Commitment to Privacy Our approach to privacy is simple: Be upfront, offer choices, and never forget that our community comes first.
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Our latest version of Spectacles, designed for creators, overlays AR Lenses directly onto the world. Visual Messaging : Visual Messaging is a fast, fun way to communicate with friends and family using augmented reality, video, voice, messaging, and creative tools.
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We are currently testing a new and simplified version of Snapchat referred to as Simple Snapchat, which organizes the tabs into three core experiences focused on communicating with friends, using the camera, and watching entertaining content. In addition to our core Snapchat product, we offer Snapchat+, our subscription service that provides subscribers access to exclusive, experimental, and pre-release features.
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AR Ads : Advertising through Snap’s AR tools unlocks the ability to reach a unique audience in a highly differentiated way through AR Lenses.
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Spectacles are our wearable AR glasses, which overlay computing over the world and extend the immersive AR Lenses experience beyond Snapchat. Spectacles are powered by Snap OS, a new purpose-built operating system with a natural interface that uses your hands and voice without the need for physical controllers.
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Large-scale Infrastructure : We spend considerable resources and investment on the underlying architecture that powers our products, such as optimizing the delivery of billions of videos to hundreds of millions of people around the world every day. We currently partner with third party providers to support the infrastructure for our growing needs.
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We provide monetizable opportunities through programs like the Snap Lens Network and Spectacles Lens Fund, which provide grants to support AR product development across many industries. We recognize and reward top performing Lenses through our Lens Creator Rewards program.
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Diversity, Equity, and Inclusion : Snap has long supported Diversity, Equity and Inclusion, or DEI, initiatives, and we have made progress on a number of fronts, including diversifying our board of directors and executive leadership, introducing new accountability around DEI outcomes, maintaining an allyship program to inspire a more inclusive culture, and enhancing our recruiting process to continue driving diverse hiring.
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These ads appear within Snapchat’s curated content. • Sponsored Snaps: Sponsored Snaps allow advertisers to communicate visually with the Snapchat community through sponsored messages within the chat tab. • Promoted Places: Promoted Places allow businesses to use the Snap Map to suggest sponsored places of interest to Snapchatters by highlighting the brand’s locations on the Snap Map with a promoted pin.
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To aid in our mission, we publish a Diversity Annual Report that discusses our goals with respect to diversity, equity, and inclusion efforts. This report outlines our beliefs around the idea that an inclusive workplace and inclusive products are central to achieving that purpose.
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Advertising Technology : We constantly develop and expand our advertising products and technology.
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Additionally, in 2021, we achieved carbon neutrality from our founding in 2011 through 2020. In 2023 and 2022, we maintained our carbon-neutral status by purchasing offsets to emissions attributable to Snap as of December 31, 2022 and 2021, respectively. We remain committed to achieve net negative carbon emissions by 2030.
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Supporting Our Team : Our values at Snap are being kind, smart, and creative, and we put those values into action through how we support our team and how our team supports one another.
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If you don’t have the autonomy to shape the context of a conversation, the conversation will simply be shaped by the permanent feeds that homogenize online conversations. 9 Table of Contents When you read our Privacy Policy, we hope that you’ll notice how much we care about the integrity of personal communication.
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Diversity, Equity, and Inclusion : Snap has long supported Diversity, Equity and Inclusion, or DEI, so that every team member uses their unique backgrounds, experiences, and abilities to build products that uplift the lived experiences of Snapchatters globally. To aid in our mission, we publish a Diversity Annual Report that discusses our diversity, equity, and inclusion strategy.
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In June 2014, we entered into a 10-year assurance of discontinuance with the Attorney General of Maryland implementing similar practices, including measures to prevent minors from creating accounts and providing annual compliance reports.
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In 2021, we adopted a set of science-based emissions reduction targets which were validated by the Science Based Targets Initiative. Additionally, in 2021, we achieved carbon neutrality with the purchase of carbon offsets for our historical operations from our founding in 2011 through 2020.
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Further, our references to website addresses are only as inactive textual references.
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Somewhere along the way, social media—by prioritizing virality and permanence—sapped conversations of this valuable context and choice.
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We’ve also created a robust Privacy, Safety, and Policy Hub where we show that context and choice are more than talking points.
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We are also currently, and may in the future be, subject to regulatory orders or consent decrees, including the consent order that we entered into with the U.S. Federal Trade Commission, or FTC, in December 2014, which resolved an investigation into some of our early practices.
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The FTC has continued to review our practices and in January 2025, announced the referral of a complaint to the Department of Justice, or the DOJ, pertaining to our deployment of our My AI feature and the allegedly resulting risk of harm to young users.
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Furthermore, foreign data protection, privacy, consumer protection, content regulation, and other laws and regulations are often more restrictive than those in the United States.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur advertising revenue could also be seriously harmed by many other factors, including: • diminished or stagnant growth, or a decline, in the total or regional number of DAUs on Snapchat; • our inability to deliver advertisements to all of our users due to legal restrictions or hardware, software, or network limitations; • a decrease in the amount of time spent on Snapchat, a decrease in the amount of content that our users share, or decreases in usage of our Camera, Visual Messaging, Map, Stories, and Spotlight platforms; • our inability to create new products that sustain or increase the value of our advertisements; • changes in our user demographics that make us less attractive to advertisers; • lack of ad creative availability by our advertising partners; • a decline in our available content, including if our content partners do not renew agreements, devote the resources to create engaging content, or provide content exclusively to us; • decreases in the perceived quantity, quality, usefulness, or relevance of the content provided by us, our community, or partners; • increases in resistance by users to our collecting, using, and sharing their personal data for advertising-related purposes; 14 Table of Contents • changes in our analytics and measurement solutions, including what we are permitted to collect and disclose under the terms of Apple’s and Google’s mobile operating systems, that demonstrate the value of our advertisements and other commercial content; • competitive developments or advertiser perception of the value of our products that change the rates we can charge for advertising or the volume of advertising on Snapchat; • product changes or advertising inventory management decisions we may make that change the type, size, frequency, or effectiveness of advertisements displayed on Snapchat or the method used by advertisers to purchase advertisements; • adverse legal developments relating to advertising, including changes mandated or prompted by legislation, regulation, executive actions, or litigation regarding the collection, use, and sharing of personal data for certain advertising-related purposes; • adverse media reports or other negative publicity involving us, our founders, our partners, or other companies in our industry; • advertiser or user perception that content published by us, our users, or our partners is objectionable; • the degree to which users skip advertisements and therefore diminish the value of those advertisements to advertisers; • changes in the way advertising is priced or its effectiveness is measured; • our inability, or perceived inability, to achieve an advertiser’s intended performance metric, measure the effectiveness of our advertising, or target the appropriate audience for advertisements; • our inability to access, collect, and disclose user’s personal data, including advertising or similar deterministic identifiers that new and existing advertisers may find useful; • difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our guidelines; • volatility in the equity markets, which may reduce our advertisers’ capacity or desire for aggressive advertising spending towards growth; and • the political, economic, and macroeconomic climate and the status of the advertising industry in general, including impacts related to labor shortages and disruptions, supply chain disruptions, banking instability, inflation, and as a result of war, terrorism, or armed conflict.
Biggest changeOur advertising revenue could also be seriously harmed by many other factors, including: • diminished or stagnant growth, or a decline, in the total or regional number of DAUs on Snapchat; • our inability to deliver advertisements to all of our users due to legal restrictions or hardware, software, or network limitations; • a decrease in the amount of time spent on Snapchat, a decrease in the amount of content that our users share, or decreases in usage of our Camera, Visual Messaging, Map, Stories, and Spotlight platforms; • our inability to create new products that sustain or increase the value of our advertisements; • changes in our user demographics that make us less attractive to advertisers; • lack of ad creative availability by our advertising partners; • a decline in our available content, including if our content partners do not renew agreements, devote the resources to create engaging content, or provide content exclusively to us; • decreases in the perceived quantity, quality, usefulness, or relevance of the content provided by us, our community, or partners; • decreases in user response rate to application notifications received from Snapchat, whether due to decreased user appreciation for notifications generally or changes in the manner notifications are delivered by mobile operating systems, which may decrease user engagement; 15 Table of Contents • increases in resistance by users to our collecting, using, and sharing their personal data for advertising-related purposes; • changes in our analytics and measurement solutions, including what we are permitted to collect and disclose under the terms of Apple’s and Google’s mobile operating systems, that demonstrate the value of our advertisements and other commercial content; • competitive developments or advertiser perception of the value of our products that change the rates we can charge for advertising or the volume of advertising on Snapchat; • product changes or advertising inventory management decisions we may make that change the type, size, frequency, or effectiveness of advertisements displayed on Snapchat or the method used by advertisers to purchase advertisements; • adverse legal developments relating to advertising, including changes mandated or prompted by legislation, regulation, executive actions, or litigation regarding the collection, use, and sharing of personal data for certain advertising-related purposes; • adverse media reports or other negative publicity involving us, our founders, our partners, or other companies in our industry; • advertiser or user perception that content published by us, our users, or our partners is objectionable; • the degree to which users skip advertisements and therefore diminish the value of those advertisements to advertisers; • changes in the way advertising is priced or its effectiveness is measured; • our inability, or perceived inability, to achieve an advertiser’s intended performance metric, measure the effectiveness of our advertising, or target the appropriate audience for advertisements , including due to metric estimates published by third parties that may differ from our own metrics ; • our inability to access, collect, and disclose user’s personal data, including advertising or similar deterministic identifiers that new and existing advertisers may find useful; • difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our guidelines; • volatility in the equity markets, which may reduce our advertisers’ capacity or desire for aggressive advertising spending towards growth; and • the political, economic, and macroeconomic climate and the status of the advertising industry in general, including impacts related to labor shortages and disruptions, supply chain disruptions, banking instability, tariffs implemented by the United States or other governments, inflation, and as a result of war, terrorism, or armed conflict.
Regulators in many of the countries in which we operate or have users are increasingly scrutinizing and regulating the collection, use, and sharing of personal data related to advertising, which could materially impact our revenue and seriously harm our business.
Regulators in many countries in which we operate or have users are increasingly scrutinizing and regulating the collection, use, and sharing of personal data related to advertising, which could materially impact our revenue and seriously harm our business.
Google and Amazon provide distributed computing infrastructure platforms for business operations, commonly referred to as a “cloud” computing service. We currently run the vast majority of our computing on Google Cloud and AWS and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google and AWS.
Google and Amazon provide distributed computing infrastructure platforms for business operations, commonly referred to as a “cloud” computing service. We currently run the vast majority of our computing on Google Cloud and AWS and have built our software and computer systems to use computing, storage capabilities, bandwidth, and other services provided by Google Cloud and AWS.
Even if the outcome of any such litigation or claim is favorable, defending against such lawsuits is costly and can impose a significant burden on management and employees. We may also receive unfavorable preliminary, interim, or final rulings in the course of litigation.
Even if the outcome of any such litigation or claim is favorable, defending against such lawsuits is costly and can impose a significant burden on management and employees. We may also receive unfavorable preliminary, interim, or final rulings in the course of litigation.
As a result, our Class A common stock is not eligible for stock indexes with these or similar restrictions. We cannot assure you that other stock indexes will not take a similar approach to FTSE Russell in the future.
As a result, our Class A common stock is not eligible for FTSE Russell or other stock indexes with these or similar restrictions. We cannot assure you that other stock indexes will not take a similar approach to FTSE Russell in the future.
For example, in November 2021, we, and certain of our officers, were named as defendants in a securities class-action lawsuit in federal court purportedly brought on behalf of purchasers of our Class A common stock.
For example, in November 2021, we, and certain of our officers, were named as defendants in a securities class-action lawsuit in federal court purportedly brought on behalf of purchasers of our Class A common stock.
There are many factors that could negatively affect user retention, growth, and engagement, including if: • users engage more with competing products instead of ours; • our competitors continue to mimic our products or improve on them; • we fail to introduce new and exciting products and services or those we introduce or modify are poorly received; • our products fail to operate effectively or compatibly on the iOS or Android mobile operating systems; • we are unable to continue to develop products that work with a variety of mobile operating systems, networks, and smartphones; • we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we display or the structure and design of our products; 12 Table of Contents • we are unable to combat bad actors, spam, or other hostile or inappropriate usage on our products; • there are changes in user sentiment about the quality or usefulness of our products in the short-term, long-term, or both; • there are concerns about the privacy implications, safety, or security of our products and our processing of personal data; • our content partners do not create content that is engaging, useful, or relevant to users; • our content partners decide not to renew agreements or devote the resources to create engaging content, or do not provide content exclusively to us; • advertisers and partners display ads that are untrue, offensive, or otherwise fail to follow our guidelines; • our products are subject to increased regulatory scrutiny or approvals, including from foreign privacy regulators, or there are changes in our products that are mandated or prompted by legislation, regulatory authorities, executive actions, or litigation, including settlements or consent decrees, that adversely affect the user experience; • technical or other problems frustrate the user experience or negatively impact users' trust in our service, including by providers that host our platforms, particularly if those problems prevent us from delivering our product experience in a fast and reliable manner, or cyberattacks, breaches, or other security incidents that compromise our sensitive user data; • we fail to provide adequate service to users, advertisers, or partners; • we do not provide a compelling user experience to entice users to use the Snapchat application on a daily basis, or our users don’t have the ability to make new friends to maximize the user experience; • we, our partners, or other companies in our industry segment are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; • we do not maintain our brand image or our reputation is damaged; or • our current or future products reduce user activity on Snapchat by making it easier for our users to interact directly with our partners.
There are many factors that could negatively affect user retention, growth, and engagement, including if: • users engage more with competing products instead of ours; • our competitors continue to mimic our products or improve on them; • we fail to introduce new and exciting products and services or those we introduce or modify are poorly received; • our products fail to operate effectively or compatibly on the iOS or Android mobile operating systems; • we are unable to continue to develop products that work with a variety of mobile operating systems, networks, and smartphones; • we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of advertisements that we display or the structure and design of our products; • we are unable to combat bad actors, spam, or other hostile or inappropriate usage on our products; 13 Table of Contents • there are changes in user sentiment about the quality or usefulness of our products in the short-term, long-term, or both; • there are concerns about the privacy implications, safety, or security of our products and our processing of personal data; • our content partners do not create content that is engaging, useful, or relevant to users; • our content partners decide not to renew agreements or devote the resources to create engaging content, or do not provide content exclusively to us; • advertisers and partners display ads that are untrue, offensive, or otherwise fail to follow our guidelines; • our products are subject to increased regulatory scrutiny or approvals, including from foreign privacy regulators, or there are changes in our products that are mandated or prompted by legislation, regulatory authorities, executive actions, or litigation, including settlements or consent decrees, that adversely affect the user experience; • technical or other problems frustrate the user experience or negatively impact users’ trust in our service, including by providers that host our platforms, particularly if those problems prevent us from delivering our product experience in a fast and reliable manner, or cyberattacks, breaches, or other security incidents that compromise our sensitive user data; • we fail to provide adequate service to users, advertisers, or partners; • we do not provide a compelling user experience to entice users to use the Snapchat application on a daily basis, or our users don’t have the ability to make new friends to maximize the user experience; • we, our partners, or other companies in our industry segment are the subject of adverse media reports or other negative publicity, some of which may be inaccurate or include confidential information that we are unable to correct or retract; • we do not maintain our brand image or our reputation is damaged; or • our current or future products reduce user activity on Snapchat by making it easier for our users to interact directly with our partners.
Our financial condition and results of operations in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: • our ability to maintain and grow our user base and user engagement; • the development and introduction of new or redesigned products or services by us or our competitors; • the ability of our cloud service providers to scale effectively and timely provide the necessary technical infrastructure to offer our service; • our ability to attract and retain advertisers in a particular period; • seasonal or other fluctuations in spending by our advertisers and product usage by our users, each of which may change as our product offerings evolve or as our business grows or as a result of unpredictable events such as labor shortages and disruptions, supply chain disruptions, banking instability, inflationary pressures, or geo-political conflicts; • restructuring or other charges and unexpected costs or other operating expenses; • the number of advertisements shown to users; • the pricing of our advertisements and other products; • the effectiveness, and our ability to demonstrate to advertisers the effectiveness, of our advertisements; • the diversification and growth of revenue sources beyond current advertising; • increases in marketing, sales, research and development, and other operating expenses that we may incur to grow and expand our operations and to remain competitive; • our ability to maintain operating margins, cash provided by operating activities, and Free Cash Flow; • our ability to accurately forecast consumer demand for our physical products and adequately manage inventory; • system failures or security incidents, and the costs associated with such incidents and remediations; • inaccessibility of Snapchat, or certain features within Snapchat, due to third-party or governmental actions; • stock-based compensation expense; • our ability to effectively incentivize our workforce; 28 Table of Contents • adverse litigation judgments, settlements, or other litigation-related costs, or product recalls; • changes in the legislative or regulatory environment, including with respect to privacy, rights of publicity, content, data protection, intellectual property, health and safety, competition, protection of minors, consumer protection, employment, money transmission, import and export restrictions, gift cards, electronic funds transfers, anti-money laundering, advertising, algorithms, encryption, and taxation, enforcement by government regulators, including fines, orders, sanctions, or consent decrees, or the issuance of executive orders or other similar executive actions that may adversely affect our revenues or restrict our business; • new privacy, data protection, and security laws and other obligations and increased regulatory scrutiny on our or our competitors’ data processing activities and privacy and information security practices, including through enforcement actions potentially resulting in large penalties or other severe sanctions and increased restrictions on the data processing activities and personal data transfers critical to the operation of our current business model; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • fluctuations in the market values of our portfolio investments and interest rates or impairments of any assets on our consolidated balance sheet; • changes in our effective tax rate; • announcements by competitors of significant new products, licenses, or acquisitions; • our ability to make accurate accounting estimates and appropriately recognize revenue for our products; • our ability to meet minimum spending commitments in agreements with our infrastructure providers; • changes in accounting standards, policies, guidance, interpretations, or principles; • the effect of war or other armed conflict on our workforce, operations, or the global economy; and • changes in domestic and global business or macroeconomic conditions, including as a result of inflationary pressures, banking instability, geo-political conflicts, terrorism, or responses to these events.
Our financial condition and results of operations in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: • our ability to maintain and grow our user base and user engagement; • the development and introduction of new or redesigned products or services by us or our competitors; • the ability of our cloud service providers to scale effectively and timely provide the necessary technical infrastructure to offer our service; • our ability to attract and retain advertisers in a particular period; • seasonal or other fluctuations in spending by our advertisers and product usage by our users, each of which may change as our product offerings evolve or as our business grows or as a result of unpredictable events such as labor shortages and disruptions, supply chain disruptions, banking instability, inflationary pressures, or geo-political conflicts; • restructuring or other charges and unexpected costs or other operating expenses; • the number of advertisements shown to users; • the pricing of our advertisements and other products; • the effectiveness, and our ability to demonstrate to advertisers the effectiveness, of our advertisements; • the diversification and growth of revenue sources beyond current advertising; • increases in marketing, sales, research and development, and other operating expenses that we may incur to grow and expand our operations and to remain competitive; • our ability to maintain operating margins, cash provided by operating activities, and Free Cash Flow; • our ability to accurately forecast consumer demand for our physical products and adequately manage inventory; • system failures or security incidents, and the costs associated with such incidents and remediations; • inaccessibility of Snapchat, or certain features within Snapchat, due to third-party or governmental actions; • stock-based compensation expense; • our ability to effectively incentivize our workforce; • adverse litigation judgments, settlements, or other litigation-related costs, or product recalls; • changes in the legislative or regulatory environment, including with respect to privacy, rights of publicity, content, data protection, intellectual property, communication, health and safety, competition, protection of minors, consumer protection, employment, money transmission, import and export restrictions, gift cards, electronic funds transfers, anti-money laundering, advertising, algorithms, encryption, and taxation, enforcement by government regulators, including fines, orders, sanctions, tariffs, or consent decrees, or the issuance of executive orders or other similar executive actions that may adversely affect our revenues or restrict our business; 30 Table of Contents • new privacy, data protection, and security laws and other obligations and increased regulatory scrutiny on our or our competitors’ data processing activities and privacy and information security practices, including through enforcement actions potentially resulting in large penalties or other severe sanctions and increased restrictions on the data processing activities and personal data transfers critical to the operation of our current business model; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • fluctuations in the market values of our portfolio investments and interest rates or impairments of any assets on our consolidated balance sheet; • changes in our effective tax rate; • announcements by competitors of significant new products, licenses, or acquisitions; • our ability to make accurate accounting estimates and appropriately recognize revenue for our products; • our ability to meet minimum spending commitments in agreements with our infrastructure providers; • changes in accounting standards, policies, guidance, interpretations, or principles; • the effect of war or other armed conflict on our workforce, operations, or the global economy; and • changes in domestic and global business or macroeconomic conditions, including as a result of inflationary pressures, banking instability, geo-political conflicts, tariffs, terrorism, or responses to these events.
In the event the conditions for optional conversion of the 2025 Notes, 2026 Notes, 2027 Notes, or 2028 Notes by holders are met before the close of business on the business day immediately preceding February 1, 2025, May 1, 2026, February 1, 2027, or December 1, 2027, respectively, holders of the applicable Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.
In the event the conditions for optional conversion of the 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, or 2030 Notes by holders are met before the close of business on the business day immediately preceding February 1, 2025, May 1, 2026, February 1, 2027, December 1, 2027, or May 1, 2030, respectively, holders of the applicable Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.
In addition, the privacy of teens’ personal data collected online, and use of commercial websites, online services, or other interactive platforms, generally, are also becoming increasingly scrutinized. Regulations focused on online safety and protection of teens’ privacy online have and may in the future require us to change our services and incur costs to do so.
In addition, the privacy of teens’ personal data collected online, and use of commercial websites, applications, online services, or other interactive platforms, generally, are also becoming increasingly scrutinized. Regulations focused on online safety and protection of teens’ privacy online have and may in the future require us to change our services and incur costs to do so.
Additionally, because we have team members internationally, we are exposed to political, social, and economic instability in additional countries and regions. Our products are highly technical and may contain undetected software vulnerabilities, bugs, or hardware errors, which could manifest in ways that could seriously harm our reputation and our business. Our products are highly technical and complex.
Additionally, because we have team members internationally, we are exposed to political, social, and economic instability in additional countries and regions. Our products are highly technical and may contain undetected software vulnerabilities, bugs, hardware errors, or defects, which could manifest in ways that could seriously harm our reputation and our business. Our products are highly technical and complex.
We believe that our ability to compete effectively depends on many factors, many of which are beyond our control, including: • the usefulness, novelty, performance, and reliability of our products compared to our competitors’ products; • the number and demographics of our DAUs; • the timing and market acceptance of our products, including developments and enhancements of our competitors’ products; • our ability to monetize our products and services, including new products and services; • the availability of our products to users; • the effectiveness of our advertising and sales teams; • the effectiveness of our advertising products; • our ability to establish and maintain advertisers’ and partners’ interest in using Snapchat; • the frequency, relative prominence, and type of advertisements displayed on our application or by our competitors; • the effectiveness of our customer service and support efforts; • the effectiveness of our marketing activities; • actual or proposed legislation, regulation, executive actions, or litigation, including settlements and consent decrees, some of which may have a disproportionate effect on us; • acquisitions or consolidation within our industry segment; • our ability to attract, retain, and motivate talented team members, particularly engineers, designers, and sales personnel; • our ability to successfully acquire and integrate companies and assets; • the security, or perceived security, of our products and data protection measures compared to our competitors' products; • our ability to cost-effectively manage and scale our operations; and • our reputation and brand strength relative to our competitors.
We believe that our ability to compete effectively depends on many factors, many of which are beyond our control, including: • the usefulness, novelty, performance, and reliability of our products compared to our competitors’ products; • the number and demographics of our DAUs; • the timing and market acceptance of our products, including developments and enhancements of our competitors’ products; • our ability to monetize our products and services, including new products and services; • the availability of our products to users; • the effectiveness of our advertising and sales teams; • the effectiveness of our advertising products; • our ability to establish and maintain advertisers’ and partners’ interest in using Snapchat; • the frequency, relative prominence, and type of advertisements displayed on our application or by our competitors; • the effectiveness of our customer service and support efforts; • the effectiveness of our marketing activities; • actual or proposed legislation, regulation, executive actions, or litigation, including settlements and consent decrees, some of which may have a disproportionate effect on us; • acquisitions or consolidation within our industry segment; • our ability to attract, retain, and motivate talented team members, particularly engineers, designers, and sales personnel; 22 Table of Contents • our ability to successfully acquire and integrate companies and assets; • the security, or perceived security, of our products and data protection measures compared to our competitors’ products; • our ability to cost-effectively manage and scale our operations; and • our reputation and brand strength relative to our competitors.
Moreover, individuals are also becoming increasingly aware of and resistant to the collection, use, and sharing of personal data in connection with advertising. Individuals are becoming more aware of options and certain rights related to consent and other options to opt-out of such data processing, including through media attention about privacy and data protection.
Moreover, individuals are also increasingly aware of and resistant to the collection, use, and sharing of personal data in connection with advertising. Individuals are more aware of options and certain rights related to consent and other options to opt-out of such data processing, including through media attention about privacy and data protection.
We are currently, and expect to be in the future, party to lawsuits contending that we should be legally responsible to content created by our users or harms experienced by our users. These lawsuits can be expensive and time-consuming. If resolved adversely, these lawsuits and claims could seriously harm our business.
We are currently, and expect to be in the future, party to lawsuits contending that we should be legally responsible for content created by our users or harms experienced by our users. These lawsuits can be expensive and time-consuming. If resolved adversely, these lawsuits and claims could seriously harm our business.
Our ability to comply with these covenants may be affected by events beyond our control, and breaches of these covenants could result in a default under the Credit Facility and any future financial agreements into which we may enter.
Our ability to comply with these covenants may be affected by events beyond our control, and breaches of these covenants could result in a default under our Credit Facility and any future financial agreements into which we may enter.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place despite their contractual representations to implement such measures and our third-party service provider vetting process.
Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place despite their contractual representations to implement such measures and our third-party provider vetting process.
For example, there may be individuals attempt to create accounts for malicious purposes, including at scale, even though we forbid that in our Terms of Service and Community Guidelines.
For example, there may be individuals who attempt to create accounts for malicious purposes, including at scale, even though we forbid that in our Terms of Service and Community Guidelines.
The market price of our Class A common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our user growth, retention, engagement, revenue, or other operating results; • variations between our actual operating results and the expectations of investors and the financial community; • the accuracy of our financial guidance or projections; • any forward-looking financial or operating information we may provide, any changes in this information, or our failure to meet expectations based on this information; • actions of investors who initiate or maintain coverage of us, changes in financial estimates by any investors who follow our company, or our failure to meet these estimates or the expectations of investors; • significant acquisitions or divestitures of our stock by investors, whether voluntarily or to comply with regulatory or other requirements; • whether our capital structure is viewed unfavorably, particularly our non-voting Class A common stock and the significant voting control of our co-founders; • additional shares of our common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales, including if we issue shares to satisfy equity-related tax obligations; • stock repurchase programs undertaken by us; • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • announcements by us or estimates by third parties of actual or anticipated changes in the size of our user base or the level of user engagement; • changes in operating performance and stock market valuations of technology companies in our industry segment, including our partners and competitors; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole, inflationary pressures, banking instability, war or other armed conflict, terrorism, or responses to these events; • lawsuits threatened or filed against us; • developments in new legislation and pending lawsuits, executive actions, or regulatory actions, including interim or final rulings by judicial or regulatory bodies, whether such developments may impact us or our competitors; and • other events or factors, including those resulting from war, incidents of terrorism, pandemics, or responses to these events.
The market price of our Class A common stock may fluctuate or decline significantly in response to numerous factors, many of which are beyond our control, including: • actual or anticipated fluctuations in our user growth, retention, engagement, revenue, or other operating results; • variations between our actual operating results and the expectations of investors and the financial community; • the accuracy of our financial guidance or projections; • any forward-looking financial or operating information we may provide, any changes in this information, or our failure to meet expectations based on this information; • actions of investors who initiate or maintain coverage of us, changes in financial estimates by any investors who follow our company, or our failure to meet these estimates or the expectations of investors; • significant acquisitions or divestitures of our stock by investors, whether voluntarily or to comply with regulatory or other requirements; • whether our capital structure is viewed unfavorably, particularly our non-voting Class A common stock and the significant voting control of our co-founders; • additional shares of our common stock being sold into the market by us or our existing stockholders, or the anticipation of such sales, including if we issue shares to satisfy equity-related tax obligations; • stock repurchase programs, or repurchases of the Convertible Notes, undertaken by us; 46 Table of Contents • announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • announcements by us or estimates by third parties of actual or anticipated changes in the size of our user base or the level of user engagement; • changes in operating performance and stock market valuations of technology companies in our industry segment, including our partners and competitors; • price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole, inflationary pressures, banking instability, war or other armed conflict, terrorism, or responses to these events; • lawsuits threatened or filed against us; • developments in new legislation and pending lawsuits, executive actions, or regulatory actions, including interim or final rulings by judicial or regulatory bodies, whether such developments may impact us or our competitors; and • other events or factors, including those resulting from war, incidents of terrorism, pandemics, or responses to these events.
Other laws to which we are or may become subject further regulate behavioral, interest-based, or targeted advertising, making certain online advertising activities more difficult and subject to additional scrutiny.
Other laws to which we are or may become subject further regulate contextual, behavioral, interest-based, or targeted advertising, making certain online advertising activities more difficult and subject to additional scrutiny.
Such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.
Such rights include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.
Laws and regulations focused on privacy, security, and data protection, including data breach notification laws, personal data privacy laws, consumer protection laws, wiretapping laws, and other similar laws have imposed obligations on companies that collect personal data from users, including providing specific disclosures in privacy notices, expanding the requirements for handling personal data, requiring consents to process personal data in certain circumstances, and affording residents with certain rights concerning their personal data.
Laws and regulations focused on privacy, security, and data protection, including data breach notification laws, personal data privacy laws, consumer protection laws, wiretapping laws, invasion of privacy laws, and other similar laws have imposed obligations on companies that collect personal data from users, including providing specific disclosures in privacy notices, expanding the requirements for handling personal data, requiring consents to process personal data in certain circumstances, and affording residents with certain rights concerning their personal data.
The processing of personal data for personalized advertising continues to be under increased scrutiny from regulators, which includes ongoing regulatory action against large technology companies like ours, the outcomes of which may be uncertain and subject to appeal. These laws may prohibit us and our customers from targeting advertising to teens based on the profiling of personal data.
The processing of personal data for personalized advertising continues to be under increased scrutiny from regulators, which includes ongoing regulatory action against large technology companies like ours, the outcomes of which may be uncertain and subject to appeal. These laws may prohibit us and our customers from advertising to teens, including based on the profiling of personal data.
If there is no lawful manner for us to transfer personal data, or if the requirements for a legally compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors, and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.
If there is no lawful manner for us to transfer personal data, or if the requirements for a legally compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors, and other third parties, and injunctions against our processing or transferring 27 Table of Contents of personal data necessary to operate our business.
As we continue to adapt and update our business model and priorities, we may make additional restructurings, reprioritizations, or reductions in the future.
As we continue to adapt and update our business model and priorities, we may make additional restructurings, reprioritizations, or workforce reductions in the future.
As we continue to adapt and update our business model and priorities, we may make additional restructurings, reprioritizations, or reductions in the future.
As we continue to adapt and update our business model and priorities, we may make additional restructurings, reprioritizations, or workforce reductions in the future.
Most of that information, however, will be reported in other public filings. For example, any disclosures required by Part III of Form 10-K as well as disclosures required by the NYSE for the year ended December 31, 2023 that are customarily included in a proxy statement are instead included in our Annual Report.
Most of that information, however, will be reported in other public filings. For example, any disclosures required by Part III of Form 10-K as well as disclosures required by the NYSE for the year ended December 31, 2024 that are customarily included in a proxy statement are instead included in our Annual Report.
The counterparties to these hedging positions or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock or purchasing or selling our Class A common stock in secondary market transactions prior to the maturity of the Convertible Notes (and are likely to do so during any observation period related to a conversion of Convertible Notes or following any repurchase of Convertible Notes by us on any fundamental change repurchase date or otherwise).
The counterparties to these hedging positions or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to our Class A common stock or purchasing or selling our Class A common stock in secondary market transactions prior to the maturity of the Convertible Notes (and are likely to do so 48 Table of Contents during any observation period related to a conversion of Convertible Notes or following any repurchase of Convertible Notes by us on any fundamental change repurchase date or otherwise).
Our operating results may be negatively affected if we are required to pay additional sales and use tax, value added tax, or other transaction taxes, and we could be subject to liability with respect to all or a portion of past or future sales.
Our operating results may be negatively affected if we are required to pay additional sales and use tax, value added tax, digital services tax, or other transaction taxes, and we could be subject to liability with respect to all or a portion of past or future sales.
If we were to receive a claim of non-compliance with the terms of any of our open source licenses, we may be required to publicly release certain portions of our proprietary source code or expend substantial time and resources to re-engineer some or all of our software, which may divert resources away from our product development efforts and, as a result, adversely affect our business.
If we were to 33 Table of Contents receive a claim of non-compliance with the terms of any of our open source licenses, we may be required to publicly release certain portions of our proprietary source code or expend substantial time and resources to re-engineer some or all of our software, which may divert resources away from our product development efforts and, as a result, adversely affect our business.
Many of these obligations are subject to change and uncertain interpretation, and our actual or perceived failure to comply with 25 Table of Contents such obligations could result in investigations, claims (including class actions), mass arbitration demands, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, or other adverse consequences, any of which could seriously harm our business.
Many of these obligations are subject to change and to uncertain interpretation, and our actual or perceived failure to comply with such obligations could result in investigations, claims (including class actions), mass arbitration demands, changes to our business practices, increased cost of operations, and declines in user growth, retention, or engagement, or other adverse consequences, any of which could seriously harm our business.
If we were to elect to satisfy tax withholding and remittance obligations in whole or in part by drawing on our revolving credit facility, our interest expense and principal repayment requirements could increase significantly, which could seriously harm our business. There are numerous risks associated with our internal and contract manufacturing of our physical products and components.
If we were to elect to satisfy tax withholding and remittance obligations in whole or in part by drawing on our revolving credit facility, or Credit Facility, our interest expense and principal repayment requirements could increase significantly, which could seriously harm our business. 40 Table of Contents There are numerous risks associated with our internal and contract manufacturing of our physical products and components.
If a court were to find either exclusive forum provision in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. Item 1B. Unresolved Staff Comments. None.
If a court were to find either exclusive forum provision in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business. 51 Table of Contents Item 1B. Unresolved Staff Comments. None.
Although we believe that Snapchat reaps significant long-term benefits from increased user engagement with content on Snapchat provided by our partners, these benefits may not offset the possible loss of advertising revenue, in which case our business could be seriously harmed. If events occur that damage our brand or reputation, our business may be seriously harmed.
Although we believe that Snapchat reaps significant long-term benefits from increased user engagement with content on Snapchat provided by our partners, these benefits may not offset the possible loss of advertising revenue, in which case our business could be seriously harmed. 34 Table of Contents If events occur that damage our brand or reputation, our business may be seriously harmed.
In addition, as our international operations and sales continue to grow, we are subject to a variety of risks inherent in doing business internationally, including: • political, social, and economic instability, including war and other armed conflict, and significant political developments or disruptions in foreign jurisdictions, such as the ongoing legal and regulatory changes in the United Kingdom as a result of the withdrawal of the United Kingdom from the European Union; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy, rights of publicity, content, data protection, cybersecurity, intellectual property, health and safety, competition, protection of minors, consumer protection, employment, money transmission, import and export restrictions, gift cards, electronic funds transfers, anti-money laundering, advertising, algorithms, encryption, and taxation, and unexpected changes in laws, regulatory requirements, and enforcement; • potential damage to our brand and reputation due to compliance with local laws, including potential censorship and requirements to provide user information to local authorities; • fluctuations in currency exchange rates; • higher levels of credit risk and payment fraud; • complying with tax requirements of multiple jurisdictions; • enhanced difficulties of integrating any foreign acquisitions; • complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining agreements that set minimum salaries, benefits, working conditions, and termination requirements; • complying with a variety of foreign disclosure and reporting obligations, including those related to environmental, social, and corporate governance impacts and security breaches; • reduced protection for intellectual-property rights in some countries; • difficulties in staffing and managing global operations and the increased travel, infrastructure, and compliance costs associated with multiple international locations; • regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash; • import and export restrictions and changes in trade regulation; 37 Table of Contents • complying with statutory equity requirements; • complying with the U.S.
In addition, as our international operations and sales continue to grow, we are subject to a variety of risks inherent in doing business internationally, including: • political, social, and economic instability, including war and other armed conflict, and significant political developments or disruptions in foreign jurisdictions; • risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy, rights of publicity, content, data protection, cybersecurity, intellectual property, communication, health and safety, competition, protection of minors, consumer protection, employment, money transmission, import and export restrictions, gift cards, electronic funds transfers, anti-money laundering, advertising, algorithms, encryption, and taxation, and unexpected changes in laws, regulatory requirements, and enforcement; • potential damage to our brand and reputation due to compliance with local laws, including potential censorship and requirements to provide user information to local authorities; • fluctuations in currency exchange rates; • higher levels of credit risk and payment fraud; • complying with tax requirements of multiple jurisdictions; • enhanced difficulties of integrating any foreign acquisitions; • complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining agreements that set minimum salaries, benefits, working conditions, and termination requirements; • complying with a variety of foreign disclosure and reporting obligations, including those related to environmental, social, and corporate governance impacts and security breaches; • reduced protection for intellectual-property rights in some countries; • difficulties in staffing and managing global operations and the increased travel, infrastructure, and compliance costs associated with multiple international locations; • regulations that might add difficulties in repatriating cash earned outside the United States and otherwise preventing us from freely moving cash; • import and export restrictions and changes in trade regulation; • complying with statutory equity requirements; • complying with the U.S.
As a result of our capital structure, holders are not obligated to disclose changes in ownership of our Class A common stock, so there can be no assurance that you, or we, will be notified of any such changes. Our directors and officers are required to file reports under Section 16 of the Exchange Act.
As a result of our capital structure, holders are not 45 Table of Contents obligated to disclose changes in ownership of our Class A common stock, so there can be no assurance that you, or we, will be notified of any such changes. Our directors and officers are required to file reports under Section 16 of the Exchange Act.
We may not be able to engage in any of these activities or on desirable terms, which could result in a default on our debt obligations. In addition, our existing and future debt agreements, including the Convertible Notes and 40 Table of Contents Credit Facility, may contain restrictive covenants that may prohibit us from adopting any of these alternatives.
We may not be able to engage in any of these activities or on desirable terms, which could result in a default on our debt obligations. In addition, our existing and future debt agreements, including the Convertible Notes and Credit Facility, may contain restrictive covenants that may prohibit us from adopting any of these alternatives.
In addition, other lawsuits allege that the design of our platform and those of our competitors is addictive and harmful to minor users’ mental health. Other plaintiffs have argued that we should be legally responsible for fentanyl overdoses or poisoning if communications about a drug transaction occurred on our platform.
In addition, other lawsuits allege that the design of our platform and those of our competitors is addictive and harmful to minor users’ mental health. Other plaintiffs have argued that we should be 37 Table of Contents legally responsible for fentanyl overdoses or poisoning if communications about a drug transaction occurred on our platform.
Some of these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these mechanisms to lawfully transfer personal data in the future.
Some of these mechanisms are, or may in the future be, subject to legal challenges, and there is no assurance that we can satisfy or rely on these mechanisms to lawfully transfer personal data in the future.
We therefore may be at heightened risk of regulatory scrutiny, as regulators focus their attention on data processing activities of companies like us, and any changes in the regulatory framework or enforcement actions, whether against us or our competitors, could require us to fundamentally change our business model, and seriously harm our business.
We therefore are at heightened risk of regulatory scrutiny, as regulators focus their attention on data processing activities of companies like us, and any changes in the regulatory framework or enforcement actions, whether against us or our competitors, could require us to fundamentally change our business model, and seriously harm our business.
As a result, our financial performance and ability to grow revenue could be seriously harmed if: • we fail to increase or maintain DAUs, especially in regions where we have higher monetization; • our user growth outpaces our ability to monetize our users, including if we don’t attract sufficient advertisers or if our user growth occurs in markets that are not as monetizable; • we fail to increase or maintain the amount of time spent on Snapchat, the amount of content that our users share, or the usage of our Camera, Visual Messaging, Map, Stories, and Spotlight platforms; • partners and users do not create sufficient engaging content for users or partners do not renew their agreements with us; 29 Table of Contents • we fail to attract sufficient advertisers to utilize our self-serve platform to make the best use of our advertising inventory; • advertisers do not continue to introduce engaging advertisements; • advertisers reduce their advertising on Snapchat; • we fail to maintain good relationships with advertisers or attract new advertisers, or demonstrate to advertisers the effectiveness of advertising on Snapchat; or • the content on Snapchat does not maintain or gain popularity.
As a result, our financial performance and ability to grow revenue could be seriously harmed if: • we fail to increase or maintain DAUs, especially in regions where we have higher monetization; • our user growth outpaces our ability to monetize our users, including if we don’t attract sufficient advertisers or if our user growth occurs in markets that are not as monetizable; • we fail to increase or maintain the amount of time spent on Snapchat, the amount of content that our users share, or the usage of our Camera, Visual Messaging, Map, Stories, and Spotlight platforms; • partners and users do not create sufficient engaging content for users or partners do not renew their agreements with us; • we fail to attract sufficient advertisers to utilize our self-serve platform to make the best use of our advertising inventory; • advertisers do not continue to introduce engaging advertisements; • advertisers reduce their advertising on Snapchat; • we fail to maintain good relationships with advertisers or attract new advertisers, or demonstrate to advertisers the effectiveness of advertising on Snapchat; • the content on Snapchat does not maintain or gain popularity; or 31 Table of Contents • we fail to attract prospective subscribers to Snapchat+, retain existing subscribers, or effectively continue to monetize Snapchat+.
In addition, cyber threat actors have also increased the complexity of their attempts to compromise user accounts, despite our defenses and detection mechanisms to prevent these account takeovers.
In addition, cyber threat actors have also increased the complexity of their attempts to compromise user and advertiser accounts, despite our defenses and detection mechanisms designed to prevent these account takeovers.
We also rely on third parties for other technology related services, including certain artificial intelligence functions. Any disruption or failure in the services we receive from these providers could harm our ability to handle existing or increased traffic and could seriously harm our business. Any financial or other difficulties these providers face may seriously harm our business.
We also rely on third parties for other technology related services, including certain AI functions. Any disruption or failure in the services we receive from these providers could harm our ability to handle existing or increased traffic and could seriously harm our business. Any financial or other difficulties these providers face may seriously harm our business.
We also are or may in the future be subject to many federal, state, local, and foreign laws and regulations, including those related to privacy, rights of publicity, content, data protection, artificial intelligence, intellectual property, health and safety, competition, protection of minors, consumer protection, employment, money transmission, import and export restrictions, gift cards, electronic funds transfers, anti-money laundering, advertising, algorithms, encryption, and taxation.
We also are and may in the future be subject to many federal, state, local, and foreign laws and regulations, including those related to privacy, rights of publicity, content, data protection, AI, intellectual property, health and safety, competition, protection of minors, consumer protection, employment, money transmission, import and export restrictions, gift cards, electronic funds transfers, anti-money laundering, advertising, algorithms, encryption, and taxation.
As a result, our user growth, retention, and engagement may be seriously harmed, and we may not be able to maintain or grow our revenue as anticipated and our business could be seriously harmed. 32 Table of Contents Our users may increasingly engage directly with our partners and advertisers instead of through Snapchat, which may negatively affect our revenue and seriously harm our business.
As a result, our user growth, retention, and engagement may be seriously harmed, and we may not be able to maintain or grow our revenue as anticipated and our business could be seriously harmed. Our users may increasingly engage directly with our partners and advertisers instead of through Snapchat, which may negatively affect our revenue and seriously harm our business.
As of December 31, 2023, Mr. Spiegel and Mr. Murphy control over 99% of the voting power of our capital stock, and Mr. Spiegel alone may exercise voting control over our outstanding capital stock. Mr. Spiegel and Mr. Murphy voting together, or in many instances, Mr.
As of December 31, 2024, Mr. Spiegel and Mr. Murphy control over 99% of the voting power of our capital stock, and Mr. Spiegel alone may exercise voting control over our outstanding capital stock. Mr. Spiegel and Mr. Murphy voting together, or in many instances, Mr.
If these or other matters continue in the future or we need to enter into licensing arrangements, which may not be available to us or on terms favorable to us, it may increase our costs and decrease the value of our products, and our business could be seriously harmed.
If these or 36 Table of Contents other matters continue in the future or we need to enter into licensing arrangements, which may not be available to us or on terms favorable to us, it may increase our costs and decrease the value of our products, and our business could be seriously harmed.
We may not successfully evaluate or use the acquired products, technology, and personnel, or accurately forecast the financial impact of an acquisition or investment transaction, including accounting charges. We may also incur unanticipated liabilities and litigation exposure that we assume as a result of acquiring companies.
We may not successfully evaluate or use the acquired products, technology, and personnel, or accurately forecast the financial impact of an acquisition or 39 Table of Contents investment transaction, including accounting charges. We may also incur unanticipated liabilities and litigation exposure that we assume as a result of acquiring companies.
In addition, we could become subject to investigations by the NYSE, the SEC, and other regulatory authorities, which could require additional financial and management resources. The requirements of being a public company have and may continue to strain our resources, result in more litigation, and divert management’s attention.
In addition, we could become subject to investigations by the NYSE, the SEC, and other regulatory authorities, which could require additional financial and management resources. The requirements of being a public company have and may continue to strain our resources, result in more litigation, and divert management ’ s attention.
While it remains uncertain whether Pillar One will be adopted, based on these thresholds, we currently expect to be outside the scope of the Pillar One proposals, though we anticipate that we will be subject to Pillar One in the future if it is ultimately adopted and if our global revenue exceeds the Pillar One thresholds.
While it remains uncertain whether Pillar One will be adopted, based on these thresholds, we currently 43 Table of Contents expect to be outside the scope of the Pillar One proposals, though we anticipate that we will be subject to Pillar One in the future if it is ultimately adopted and if our global revenue exceeds the Pillar One thresholds.
The owners and operators of such mobile operating systems and application stores, primarily Google and Apple, each have approval authority over whether to feature our core products on their application stores and make available to consumers third-party products that compete with ours.
The owners and operators of such mobile operating systems and application stores, primarily Google and Apple, each have approval authority over whether to feature our core products on their application stores and make available to 16 Table of Contents consumers third-party products that compete with ours.
Snapchat, our other products, or products we may introduce in the future, may contain undetected software bugs, hardware errors, and other vulnerabilities. These bugs and errors can manifest in any number of ways in our products, including through diminished performance, security vulnerabilities, malfunctions, or even permanently disabled products.
Snapchat, our other products, or products we may introduce in the future, may contain undetected software bugs, hardware errors, and other vulnerabilities. These bugs and errors can manifest in any number of ways in our products, including through diminished performance, security vulnerabilities, 35 Table of Contents malfunctions, or even permanently disabled products.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable privacy, security, or data protection obligations, we could face significant consequences, including government enforcement actions (such as investigations, claims, audits, and penalties), litigation (including class-action litigation) and mass arbitration demands, additional reporting requirements 27 Table of Contents or oversight, bans on processing personal data, negative publicity, and orders to destroy or not use personal data.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable privacy, security, or data protection obligations, we could face significant consequences, including government enforcement actions (such as investigations, claims, audits, and penalties), litigation (including class-action litigation) and mass arbitration demands, additional reporting requirements or oversight, bans on processing personal data, negative publicity, and orders to destroy or not use or transfer personal data.
Although we believe that these decisions will benefit the aggregate user experience and improve our financial performance over the long term, we may experience disruptions or declines in our DAUs or user activity broadly or concentrated on certain portions of our application.
Although we believe that these decisions will benefit the aggregate user experience and improve our 20 Table of Contents financial performance over the long term, we may experience disruptions or declines in our DAUs or user activity broadly or concentrated on certain portions of our application.
It is possible that we may fail to effectively scale and grow our technology infrastructure to accommodate these increased demands, or that improving our current technology infrastructure will require significant resources and delay or hinder the development of other products or services.
It is possible that we may fail to effectively scale and grow our technology infrastructure to 32 Table of Contents accommodate these increased demands, or that improving our current technology infrastructure will require significant resources and delay or hinder the development of other products or services.
In addition, we have reserved shares for issuance under our equity incentive plans. We may also issue shares of our Class A common stock or securities convertible into our Class A common stock from time to time in connection with a financing, acquisition, investment, or otherwise.
In addition, we have reserved shares for issuance under our equity incentive plans. We may also issue shares of our Class A common stock or securities convertible into our Class A common stock from time to time in 49 Table of Contents connection with a financing, acquisition, investment, or otherwise.
In addition, ongoing changes to privacy and data protection laws and mobile operating systems have made it more 20 Table of Contents difficult for us to target and measure advertisements effectively, and advertisers may prioritize the solutions of larger, more established companies.
In addition, ongoing changes to privacy and data protection laws and mobile operating systems have made it more difficult for us to target and measure advertisements effectively, and advertisers may prioritize the solutions of larger, more established companies.
We may not be able to manage growth and expansion effectively, which could damage our brand, result in significant costs, and seriously harm our business. For example, in August 2022, we undertook a broad strategic reprioritization to focus on our top priorities, improve cost efficiencies, and drive toward profitability and positive free cash flow.
We may not be able to manage growth and expansion effectively, which could damage our brand, result in significant costs, and seriously harm our business. For example, in recent years we undertook a broad strategic reprioritization to focus on our top priorities, improve cost efficiencies, and drive toward profitability and positive free cash flow.
Any such changes could 33 Table of Contents disrupt our operations, increase costs, make it harder to service our users or customers, adversely impact employee retention, hiring and morale, negatively impact our reputation, or distract management, any of which could seriously harm our business.
Any such changes could disrupt our operations, increase costs, make it harder to service our users or customers, adversely impact employee retention, hiring and morale, negatively impact our reputation, or distract management, any of which could seriously harm our business.
If we elect to settle our conversion obligation in shares of our Class A common stock or a combination of cash and shares of our Class A common stock, any sales in the public market of our Class A common stock issuable on such conversion could adversely affect prevailing market prices of our Class A common stock.
If we elect to settle our conversion obligation in shares of our Class A common stock or a combination of cash and shares of our Class A common stock, any 47 Table of Contents sales in the public market of our Class A common stock issuable on such conversion could adversely affect prevailing market prices of our Class A common stock.
As of December 31, 2023, we had recorded a total of $1.8 billion of goodwill and intangible assets, net related to our acquisitions.
As of December 31, 2024, we had recorded a total of $1.8 billion of goodwill and intangible assets, net related to our acquisitions.
The implementation and enforcement, including through private rights of action, of these increasingly complex, onerous, or divergent laws and regulations, and the introduction, interpretation, or revision of any new such laws or regulations, with respect to privacy, security, data protection, and our industry are uncertain and may further complicate compliance efforts, lead to fragmentation of the service, and may increase legal risk and compliance costs for us and our third-party partners.
The implementation and enforcement, including through private rights of action, of these increasingly complex, onerous, or divergent laws and regulations, and the introduction, interpretation, or revision of any new such laws or regulations, with respect to privacy, security, data protection, and our industry are uncertain and may further complicate compliance efforts, lead to fragmentation of the service, increase legal risk and compliance costs for us and our third-party partners, or decrease the perceived usefulness of our service to our users and advertisers.
Some open 31 Table of Contents source licenses contain express requirements or impose conditions, which may be triggered under certain circumstances, with respect to the exploitation of proprietary source code or other intellectual property by users of open source software.
Some open source licenses contain express requirements or impose conditions, which may be triggered under certain circumstances, with respect to the exploitation of proprietary source code or other intellectual property by users of open source software.
If we are subject to additional taxes and determine to offset such increased costs by collecting and remitting such taxes from our customers, or otherwise passing those costs through to our customers, companies may be discouraged from purchasing our products and solutions.
If we are subject to additional taxes, including digital services taxes, and determine to offset such increased costs by collecting and remitting such taxes from our customers, or otherwise passing those costs through to our customers, companies may be discouraged from purchasing our products and solutions.
Vulnerabilities could be exploited and result in a security or privacy incident. If any of these or similar events occur, our or our third-party partners’ sensitive information and information technology systems could be accessed, acquired, modified, destroyed, lost, altered, encrypted, or disclosed in an unauthorized, unlawful, accidental, or other improper manner, resulting in a security incident or other interruption.
If any of these or similar events occur, our or our third-party partners’ sensitive information and information technology systems could be accessed, acquired, modified, destroyed, lost, altered, encrypted, or disclosed in an unauthorized, unlawful, accidental, or other improper manner, resulting in a security incident or other interruption.
If we are unable to consummate key acquisition transactions essential to our corporate strategy, it may limit our ability to grow or compete effectively and our business may be seriously harmed. 38 Table of Contents If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings, which could seriously harm our business.
If we are unable to consummate key acquisition transactions essential to our corporate strategy, it may limit our ability to grow or compete effectively and our business may be seriously harmed. If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings, which could seriously harm our business.
Item 1A. Risk Factors. You should carefully consider the risks and uncertainties described below, together with all the other information in this Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes.
Item 1A. Risk Factors. You should carefully consider the risks and uncertainties described below, together with all the other information in this Annual Report on Form 10-K, including “Management ’ s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes.
Moreover, in emerging international markets, where mobile devices often lack large storage capabilities, we may compete with other applications for the limited space available on a user’s mobile device. We also face competition from traditional and online media businesses for advertising budgets.
Moreover, in emerging international markets, where mobile devices often lack large storage capabilities, we may compete with other applications for the limited 21 Table of Contents space available on a user’s mobile device. We also face competition from traditional and online media businesses for advertising budgets.
We implement measures in our user registration process and through other technical measures 24 Table of Contents to prevent, detect, and suppress that behavior, although we have not determined the number of such accounts, or the effectiveness of such measures.
We implement measures in our user registration process and through other technical measures to prevent, detect, and suppress that behavior, although we have not determined the number of such accounts, or the effectiveness of such measures.
It is possible that changes or interpretations under the Tax Cuts and Jobs Act, the IRA, or other tax legislation could increase our future tax liability, which could in turn adversely impact our business and future profitability.
It is possible that changes or interpretations under the Tax Cuts and Jobs Act, the IRA, or other tax legislation, or the enactment of new tax legislation, could increase our future tax liability, which could in turn adversely impact our business and future profitability.
Substantially all of our revenue is generated from third parties advertising on Snapchat. For the years ended December 31, 2023, 2022, and 2021, advertising revenue accounted for approximately 96%, 99%, and 99% of our total revenue, respectively.
Substantially all of our revenue is generated from third parties advertising on Snapchat. For the years ended December 31, 2024, 2023, and 2022, advertising revenue accounted for approximately 91%, 96%, and 99% of our total revenue, respectively.
In the future, as our international operations increase, or more of our revenue agreements or operating expenses are denominated in currencies other than the U.S. dollar, these impacts may become material.
In the future, as our international operations increase, or more of our revenue agreements or operating expenses are denominated in currencies other than the 38 Table of Contents U.S. dollar, these impacts may become material.
Global economic and business activities continue to face widespread macroeconomic uncertainties, including labor shortages and disruptions, supply chain disruptions, banking instability, inflation, and recession risks, which may continue for an extended period, and some of which have adversely impacted, and may continue to adversely impact, many aspects of our business.
Global economic and business activities have in the past and may continue to face widespread macroeconomic uncertainties, including labor shortages and disruptions, supply chain disruptions, banking instability, tariffs, inflation, and recession risks, which may continue for an extended period, and some of which have adversely impacted, and may continue to adversely impact, many aspects of our business.
If we cannot effectively compete, our user engagement may decrease, which could make us less attractive to users, advertisers, and partners and seriously harm our business. 21 Table of Contents We have incurred operating losses in the past, and may not be able to attain and sustain profitability.
If we cannot effectively compete, our user engagement may decrease, which could make us less attractive to users, advertisers, and partners and seriously harm our business. We have incurred operating losses in the past, and may not be able to attain and sustain profitability.
We had 414 million daily active users, or DAUs, on average in the quarter ended December 31, 2023. We view DAUs as a critical measure of our user engagement, and adding, maintaining, and engaging DAUs have been and will continue to be necessary.
We had 453 million daily active users, or DAUs, on average in the quarter ended December 31, 2024. We view DAUs as a critical measure of our user engagement, and adding, maintaining, and engaging DAUs have been and will continue to be necessary.
Companies in the mobile, camera, communication, media, internet, and other technology-related industries own large numbers of patents, copyrights, trademarks, trade secrets, and other intellectual property rights, and frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights.
Companies in the mobile, camera, communication, media, internet, artificial intelligence, augmented reality, and other technology-related industries own large numbers of patents, copyrights, trademarks, trade secrets, and other intellectual property rights, and frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights.
Our advertising customers range from small businesses to well-known brands, and may include advertising resellers. Many of our customers spend a relatively small portion of their overall advertising budget with us, but some customers have devoted meaningful budgets that contribute more significantly to our total revenue.
Our advertising customers range from small businesses to well-known brands, including advertising resellers. Many of our customers spend a relatively small portion of their overall advertising budget with us, but some customers have devoted meaningful budgets that contribute more significantly to our total revenue.
Because we store, process, and use data, some of which contains personal data, we are subject to complex and evolving federal, state, local and foreign laws, regulations, executive actions, rules, contractual obligations, policies, and other obligations regarding privacy, data protection, content, the use of artificial intelligence, and other matters.
Because we store, process, and use data, some of which contains personal data, we are subject to complex and evolving federal, state, local and foreign laws, regulations, executive actions, rules, contractual obligations, policies, and other obligations regarding privacy, data protection, content regulation, and other matters.
Such disclosures are costly and the failure to comply with these legal requirements could lead to adverse consequences. Governments and regulatory agencies (including the Securities and Exchange Commission, or the SEC) have and may continue to enact new disclosure requirements for cybersecurity events.
Such disclosures and related actions are costly and the failure to comply with applicable legal requirements could lead to adverse consequences. Governments and regulatory agencies (including the Securities and Exchange Commission, or the SEC) have and may continue to enact new disclosure requirements for cybersecurity events.
These exclusive forum provisions may limit a stockholder’s ability to bring an action in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us 49 Table of Contents and our directors, officers, and other employees.
These exclusive forum provisions may limit a stockholder’s ability to bring an action in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers, and other employees.
Expanding and operating in international markets requires significant resources and management attention. If we are not successful in expanding and operating our business in international markets, we may incur significant costs, damage our brand, or need to lay off team members in those markets, any of which may seriously harm our business.
If we are not successful in expanding and operating our business in international markets, we may incur significant costs, damage our brand, or need to lay off team members in those markets, any of which may seriously harm our business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+4 added−1 removed4 unchanged
Biggest changeWe conduct penetration testing on a periodic basis, and have established an external bug bounty program to allow security researchers to help identify vulnerabilities and weaknesses in our controls and configurations in our systems. We also maintain a vendor risk management program designed to identify and mitigate potential risks associated with third-party suppliers and business partners.
Biggest changeWe conduct penetration testing or other application security testing on a periodic basis, and have established an external bug bounty program to allow security researchers to help identify vulnerabilities and weaknesses in our controls and configurations in our systems.
The incident response team assesses the severity and priority of incidents on a rolling basis, with escalations of cybersecurity incidents provided to our management team by our CISO and General Counsel (or their designees) and escalations of certain cybersecurity incidents as appropriate to our board of directors.
The incident response team assesses the severity and priority of reported incidents on a rolling basis, with escalations of cybersecurity incidents provided to our management team by our CISO and General Counsel (or their designees) and escalations of certain cybersecurity incidents as appropriate to our board of directors.
If a cybersecurity incident is determined to be a material cybersecurity incident, our Security Incident Response Policy and associated plans define the process to file a report regarding the incident with the SEC.
If a cybersecurity incident is determined to be a material cybersecurity incident, our Security Incident Response Policy and associated plans define the process to file a report regarding the incident with the SEC. Mr.
These processes vary in scope and maturity across the business and are processes we work to continually improve. Our risk management approach is supplemented by external and internal enterprise risk management audits, which are designed to test the effectiveness of our security controls.
These processes vary in scope and maturity across the business and are processes we work to improve. Our risk management approach is supplemented by external and internal enterprise risk management audits, which are designed to test the effectiveness of our controls.
Our CISO, Jim Higgins, has over 30 years of experience in the technology sector, including senior leadership roles in product security, information security engineering, and cloud enterprise. Mr. Higgins assisted the Linux Foundation in starting the Open Source Security Foundation to help increase awareness and promote technical solutions to address 50 Table of Contents validation of Open Source software. Mr.
Our CISO, Jim Higgins, has over 30 years of experience in the technology sector, including senior leadership roles in product security, information security engineering, and cloud enterprise. Mr. Higgins assisted the Linux Foundation in starting the Open Source Security Foundation to help increase awareness and promote technical solutions to address validation of Open Source software. Mr.
The material cybersecurity threats identified through these processes are managed by our CISO and, where appropriate, our risk and compliance committee, in consultation with management. Together, they identify responsive actions for inclusion in our annual strategic planning, or earlier resolution depending on the nature of the risk.
The material cybersecurity threats identified through these processes are managed by our CISO and are escalated to senior management and our risk and compliance committee, in each case where appropriate. Together, they identify responsive actions for inclusion in our annual strategic planning, or earlier resolution depending on the nature of the risk.
In addition, the chair of our audit committee meets with our CISO on a quarterly basis to discuss cybersecurity threats and incidents, as well as the business’s approach to responding to them. Our incident response plans also provide that our board of directors and audit committee are also notified in the event of a material cybersecurity incident.
In addition, the chair of our audit committee meets with our CISO periodically to discuss cybersecurity threats and incidents, as well as the business’s approach to responding to them. Our incident response plans also provide that our board of directors and audit committee will be notified in the event of certain cybersecurity incidents.
This program includes pre-engagement diligence, use of contractual cybersecurity and notification provisions, and ongoing monitoring of vendors, as appropriate. We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional service firms (including legal counsel), threat intelligence services, and cybersecurity consultants.
We use third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including for example professional service firms (including legal counsel), threat intelligence services, and cybersecurity consultants.
Higgins has worked in information security at Chevron, Eastman Kodak, and Google, and, mostly recently, spent two years as the CISO of Block, Inc. (formerly Square).
Higgins has worked in information security at Chevron, Eastman Kodak, and Google, and, mostly recently, spent two years as the CISO of Block, Inc. (formerly Square). Our CISO also regularly meets with our CEO and other senior management, including as part of the cybersecurity incident response process.
A report to the alias triggers our Security Incident Response Policy and associated plans, which has defined roles for our cross-functional incident response team.
A reported incident triggers our Security Incident Response Policy or 52 Table of Contents associated plans, which has defined roles for our cross-functional incident response team to investigate, contain, eradicate, and remediate the incident.
Our CISO, and where necessary our management team and risk and compliance committee, are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents, through our security incident response process. We maintain internal aliases, which employees may use to identify a cybersecurity or privacy threat or incident, for escalation, investigation, containment, and remediation.
Our CISO, and where appropriate our management team and risk and compliance committee, are informed about and monitor the prevention, detection, mitigation, and remediation of identified cybersecurity incidents, through our security incident response process. We maintain internal and external channels and signals to receive reports of cybersecurity or privacy threats or incidents.
Removed
Our CISO also regularly meets with our CEO and other members of our management team (or their designees), including our General Counsel, Chief Financial Officer, Chief Communications Officer, and Senior Vice President of Engineering, including as part of the cybersecurity incident response process.
Added
We also maintain a vendor risk management program designed to identify and mitigate potential risks associated with third-party suppliers and business partners. This program includes pre-engagement diligence, use of contractual cybersecurity and incident notification provisions, and ongoing monitoring of vendors, as appropriate. We also conduct employee training on data protection, including cybersecurity, among other topics.
Added
Higgins recently announced his intention to depart our company effective February 21, 2025 and, as a result, Eric Young, our Senior Vice President of Engineering, will act as our interim CISO while we conduct a search for a permanent replacement. Mr.
Added
Young has more than 25 years of experience working in the technology industry across a diverse range of business sectors and since June 2023 has overseen Mr. Higgins and our engineering security team, which comprises personnel with a broad range of experience in cybersecurity, information technology, and risk management. During Mr. Young’s tenure at Snap, Mr.
Added
Young has been involved in our approach in assessing, identifying, and managing security incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our corporate headquarters are located in Santa Monica, California, where we occupy approximately 718,000 square feet. As of December 31, 2023, our global facilities totaled an aggregate of approximately 1.8 million square feet of leased office space. We also maintain offices in multiple locations in North America and internationally in Europe, Asia, and Australia.
Biggest changeItem 2. Properties. Our corporate headquarters are located in Santa Monica, California, where we occupy approximately 718,000 square feet. As of December 31, 2024, our global facilities totaled an aggregate of approximately 1.9 million square feet of leased office space. We also maintain offices in multiple locations in North America and internationally in Europe, Asia, and Australia.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

4 edited+3 added−4 removed8 unchanged
Biggest changeNumerous school districts have filed public nuisance claims based on similar allegations, which also have been consolidated in either the MDL or JCCP. We believe we have meritorious defenses to these lawsuits, and continue to defend them vigorously, but litigation is inherently uncertain and an unfavorable outcome could seriously harm our business.
Biggest changeNumerous school districts and other municipalities have filed public nuisance claims based on similar allegations, which also have been consolidated in either the MDL or JCCP, and we have received similar claims in Canada and Israel. The Nevada Attorney General and New Mexico Attorney General have also filed lawsuits against us in their respective state courts making similar allegations.
We believe we have meritorious defenses to these lawsuits, and plan to continue to defend them vigorously, but litigation is inherently uncertain and an unfavorable outcome could seriously harm our business.
We believe we have meritorious defenses to these lawsuits, and continue to defend them vigorously, but litigation is inherently uncertain and an unfavorable outcome could seriously harm our business.
Regardless of final outcomes, however, any such proceedings, claims, inquiries, and investigations may nonetheless impose a significant burden on management and employees and may come with costly defense costs or unfavorable preliminary and interim rulings. Item 4. Mine Safety Disclosures. Not applicable. 52 Table of Contents PART II
Regardless of final outcomes, however, any such proceedings, claims, inquiries, and investigations may nonetheless impose a significant burden on management and employees and may come with costly defense costs or unfavorable preliminary and interim rulings. Item 4. Mine Safety Disclosures. Not applicable. 54 Table of Contents PART II
District Court for the Northern District of California (“MDL”) or a California Judicial Council Coordinated Proceeding (“JCCP”) pending in the Complex Division of the Los Angeles County Superior Court. On October 13, 2023, the court in the JCCP litigation issued a ruling dismissing some of the claims against us, but allowing the plaintiffs’ negligence claim to proceed.
District Court for the Northern District of California, or MDL, or a California Judicial Council Coordinated Proceeding, or JCCP, pending in the Complex Division of the Los Angeles County Superior Court.
Removed
On August 2, 2022, we, and certain of our directors, were named as defendants in a class-action lawsuit in Delaware Chancery Court purportedly brought on behalf of Class A stockholders, alleging that a transaction between our co-founders and us, in which our co-founders agreed to employment agreements and we agreed to amend our certificate of incorporation and issue a stock dividend if certain conditions were met, was not advantageous to the stockholders, constituted a breach of fiduciary duty, and should have been put to a vote of the Class A stockholders.
Added
We are also subject to government investigations and inquiries from multiple regulators concerning the use of our products and features, and the alleged mental and physical health and safety impacts on teen users in particular.
Removed
In June 2023, we entered into a Stipulation of Compromise and Settlement to settle and dismiss the lawsuit, with prejudice, subject to approval by the court and the satisfaction of various conditions. The parties entered an amended Stipulation of Compromise and Settlement in December 2023.
Added
We believe we have meritorious defenses to these lawsuits, and plan to continue to defend them vigorously, but litigation is inherently uncertain and an unfavorable outcome could seriously harm our business. 53 Table of Contents On January 16, 2025, the FTC referred a complaint against us to the DOJ that pertains to our deployment of our My AI feature and the allegedly resulting risks of harm to young users.
Removed
The settlement would, among other things, modify the conditions for the issuance of the stock dividend.
Added
We believe we have meritorious defenses to any legal proceedings that may arise out of this complaint, and plan to continue to defend them vigorously, but any legal proceedings that may arise out of this complaint are inherently uncertain and an unfavorable outcome could seriously harm our business.
Removed
While we continue to believe we have meritorious defenses to the lawsuit, we understand 51 Table of Contents that litigation is inherently uncertain and have agreed to the settlement to resolve the disputes, avoid the costs and risks of further litigation, and avoid unwarranted distractions to our management.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−2 removed5 unchanged
Biggest changeThe stock price performance of the following graph is not necessarily indicative of future stock price performance. Item 6. Reserved. Not required. 54 Table of Contents
Biggest changeThe stock price performance of the following graph is not necessarily indicative of future stock price performance.
Recent Sale of Unregistered Securities and Use of Proceeds None. 53 Table of Contents Stock Performance Graph This performance graph shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of Snap Inc. under the Securities Act.
Recent Sale of Unregistered Securities and Use of Proceeds None. 55 Table of Contents Stock Performance Graph This performance graph shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or incorporated by reference into any filing of Snap Inc. under the Securities Act.
The graph assumes that $100 was invested at the market close on December 31, 2018 in our Class A common stock, the S&P 500 Index, and the NYSE Composite, and data for the S&P 500 Index and the NYSE Composite assumes reinvestment of any dividends.
The graph assumes that $100 was invested at the market close on December 31, 2019 in our Class A common stock, the S&P 500 Index, and the NYSE Composite, and data for the S&P 500 Index and the NYSE Composite assumes reinvestment of any dividends.
The following graph shows a comparison, for the five years ended December 31, 2023, of the cumulative total return for our Class A common stock, the Standard & Poor’s 500 Stock Index ( “ S&P 500 Index ” ), and the NYSE Composite.
The following graph shows a comparison, for the five years ended December 31, 2024, of the cumulative total return for our Class A common stock, the Standard & Poor’s 500 Stock Index ( “ S&P 500 Index ” ), and the NYSE Composite.
Holders of Record As of December 31, 2023, there were 937 stockholders of record of our Class A common stock. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Holders of Record As of December 31, 2024, there were 902 stockholders of record of our Class A common stock. Because many of our shares of Class A common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
The closing price of our Class A common stock as of December 31, 2023 was $16.93 per share as reported on the NYSE. As of December 31, 2023, there were 74 stockholders of record of our Class B common stock and two stockholders of record of our Class C common stock.
The closing price of our Class A common stock as of December 31, 2024 was $10.77 per share as reported on the NYSE. As of December 31, 2024, there were 73 stockholders of record of our Class B common stock and two stockholders of record of our Class C common stock.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table summarizes stock repurchase activity for the three months ended December 31, 2023 (in thousands, except per share data): Total Number of Shares Purchased (1) Average Price Per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Program (1) Approximate Dollar Value of Shares that May Yet be Repurchased Under the Program (1) October 1 - October 31, 2023 7,891 $ 9.46 7,891 $ 425,437 November 1 - November 30, 2023 10,532 $ 10.90 10,532 $ 310,790 December 1 - December 31, 2023 — $ — — $ 310,790 Total 18,423 18,423 (1) In October 2023, our board of directors authorized a stock repurchase program of up to $500.0 million of our Class A common stock.
Added
Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no purchases of equity securities by the issuer or any “affiliated purchasers” (as defined in Rule 10b-18(a)(3) the Exchange Act) during the three months ended December 31, 2024.
Removed
During the fourth quarter of 2023, we repurchased 18.4 million shares of our Class A common stock for an aggregate of $189.4 million, including costs associated with the repurchases. As of December 31, 2023, the remaining availability under the stock repurchase authorization was $310.8 million. (2) Average price paid per share includes costs associated with the repurchases.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+32 added−13 removed42 unchanged
Biggest changeSome of these limitations are that: • Free Cash Flow does not reflect our future contractual commitments; • Adjusted EBITDA excludes certain recurring, non-cash charges such as depreciation of fixed assets and amortization of acquired intangible assets and, although these are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future; • Adjusted EBITDA excludes stock-based compensation expense and payroll and other tax expense related to stock-based compensation, which have been, and will continue to be for the foreseeable future, significant recurring expenses in our business and an important part of our compensation strategy; and • Adjusted EBITDA excludes income tax benefit (expense). 68 Table of Contents The following table presents a reconciliation of Free Cash Flow to net cash provided by (used in) operating activities, the most comparable GAAP financial measure, for each of the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Free Cash Flow reconciliation: Net cash provided by (used in) operating activities $ 246,521 $ 184,614 $ 292,880 Less: Purchases of property and equipment (211,727) (129,306) (69,875) Free Cash Flow $ 34,794 $ 55,308 $ 223,005 The following table presents a reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure, for each of the periods presented: Year Ended December 31, 2023 2022 2021 (in thousands) Adjusted EBITDA reconciliation: Net loss $ (1,322,485) $ (1,429,653) $ (487,955) Add (deduct): Interest income (168,394) (58,597) (5,199) Interest expense 22,024 21,459 17,676 Other (income) expense, net 42,414 42,529 (240,175) Income tax (benefit) expense 28,062 28,956 13,584 Depreciation and amortization 159,999 186,434 119,141 Stock-based compensation expense 1,319,783 1,353,283 1,092,135 Payroll and other tax expense related to stock-based compensation 39,324 44,213 107,479 Restructuring charges (1) 40,850 188,949 — Adjusted EBITDA $ 161,577 $ 377,573 $ 616,686 (1) Restructuring charges in 2023 relating to the wind down of our AR Enterprise business were composed primarily of cash severance, stock-based compensation expense, and charges related to the revision of the useful lives and disposal of certain acquired intangible assets.
Biggest changeThe following table presents a reconciliation of Free Cash Flow to net cash provided by (used in) operating activities, the most comparable GAAP financial measure, for each of the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands) Free Cash Flow reconciliation: Net cash provided by (used in) operating activities $ 413,480 $ 246,521 $ 184,614 Less: Purchases of property and equipment (194,826) (211,727) (129,306) Free Cash Flow $ 218,654 $ 34,794 $ 55,308 72 Table of Contents The following table presents a reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP financial measure, for each of the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands) Adjusted EBITDA reconciliation: Net loss $ (697,856) $ (1,322,485) $ (1,429,653) Add (deduct): Interest income (153,466) (168,394) (58,597) Interest expense 21,552 22,024 21,459 Other (income) expense, net 16,846 42,414 42,529 Income tax (benefit) expense 25,630 28,062 28,956 Depreciation and amortization 154,459 159,999 186,434 Stock-based compensation expense 1,031,621 1,319,783 1,353,283 Payroll and other tax expense related to stock-based compensation 37,768 39,324 44,213 Restructuring charges (1) 72,051 40,850 188,949 Adjusted EBITDA $ 508,605 $ 161,577 $ 377,573 (1) Restructuring charges in 2024 are primarily related to cash severance, stock-based compensation expense, and other charges associated with the 2024 restructuring.
Sales and Marketing Expenses Sales and marketing expenses consist primarily of personnel-related costs, including salaries, benefits, commissions, and stock-based compensation expense for our employees engaged in sales and sales support, business development, media, marketing, corporate partnerships, and customer service functions.
Sales and Marketing Expenses Sales and marketing expenses primarily consist of personnel-related costs, including salaries, benefits, commissions, and stock-based compensation expense for our employees engaged in sales and sales support, business development, media, marketing, corporate partnerships, and customer service functions.
Interest expense for all periods consists primarily of amortization of debt issuance costs and contractual interest expense.
Interest expense for all periods primarily consists of amortization of debt issuance costs and contractual interest expense.
Our financing activities for the year ended December 31, 2023 consisted primarily of $189.4 million of repurchases of our Class A common stock and $270.4 million of deferred payments for acquisitions completed in prior periods.
Our financing activities for the year ended December 31, 2023 primarily consisted of $189.4 million of repurchases of our Class A common stock and $270.4 million of deferred payments for acquisitions completed in prior periods.
Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to domestic income, use of tax credits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.
Our effective tax rates will vary depending on changes in the valuation of our deferred tax assets and liabilities, the relative proportion of foreign to domestic income, use of tax credits, and changes in tax laws.
Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors,” “Note Regarding Forward-Looking Statements,” and “Note Regarding User Metrics and Other Data.” The following generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Annual Report on Form 10-K, particularly in “Risk Factors,” “Note Regarding Forward-Looking Statements,” and “Note Regarding User Metrics and Other Data.” The following generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This differs from the presentation of our revenue by geography in the notes to our consolidated financial statements, where revenue is based on the billing address of the advertising customer. 57 Table of Contents Quarterly Average Revenue per User Global North America (1) Europe (2) (1) North America includes Mexico, the Caribbean, and Central America.
This differs from the presentation of our revenue by geography in the notes to our consolidated financial statements, where revenue is based on the billing address of the advertising customer. 60 Table of Contents Quarterly Average Revenue per User Global North America (1) Europe (2) (1) North America includes Mexico, the Caribbean, and Central America.
Effective March 2022, we halted advertising sales to Russian and Belarusian entities. 58 Table of Contents Rest of World Results of Operations Components of Results of Operations Revenue We generate substantially all of our revenue through the sale of our advertising products, which primarily include Snap Ads and AR Ads, referred to as advertising revenue.
Effective March 2022, we halted advertising sales to Russian and Belarusian entities. 61 Table of Contents Rest of World Results of Operations Components of Results of Operations Revenue We generate substantially all of our revenue through the sale of our advertising products, which primarily include Snap Ads and AR Ads, referred to as advertising revenue.
Our investing activities in the year ended December 31, 2023 consisted primarily of maturities of marketable securities of $2.4 billion and sales of marketable securities of $459.5 million, partially offset by purchases of marketable securities of $2.0 billion and purchases of property and equipment of $211.7 million.
Our investing activities for the year ended December 31, 2023 primarily consisted of maturities of marketable securities of $2.4 billion and sales of marketable securities of $459.5 million, partially offset by purchases of marketable securities of $2.0 billion and purchases of property and equipment of $211.7 million.
Should any of these estimates and assumptions change, it could have a material impact on our results of operations, financial position, and cash flows. Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining our uncertain tax positions.
Should any of these estimates and assumptions change, it could have a material impact on our results of operations, financial position, and cash flows. 74 Table of Contents Income Taxes We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in determining our uncertain tax positions.
We believe that we can be successful in our current operating environment, with various macroeconomic factors impacting our business, by rigorously prioritizing our investments and continuing to engage our community with our products while driving success for our advertising partners. However, the impact of this strategic reprioritization is difficult to predict.
We believe that we can be successful in our current operating environment, with various macroeconomic factors impacting our business, by rigorously prioritizing our investments and continuing to engage our community with our products while driving success for our advertising partners. However, the impact of our strategic reprioritization and recent restructurings is difficult to predict.
We believe that both Free Cash Flow and Adjusted EBITDA provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics used by our management for financial and operational decision-making.
We believe that both Free Cash Flow and Adjusted EBITDA provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater 71 Table of Contents transparency with respect to key metrics used by our management for financial and operational decision-making.
Loans bear interest, at our option, at a rate equal to (i) a term secured overnight financing rate, or SOFR, plus 0.75% or the 65 Table of Contents base rate, if selected by us, for loans made in U.S. dollars, (ii) the Sterling overnight index average plus 0.7826% for loans made in Sterling, or (iii) foreign indices as stated in the credit agreement plus 0.75% for loans made in other permitted foreign currencies.
Loans bear interest, at our option, at a rate equal to (i) a term secured overnight financing rate, or SOFR, plus 0.75% or the base rate, if selected by us, for loans made in U.S. dollars, (ii) the Sterling overnight index average plus 0.7826% for loans made in Sterling, or (iii) foreign indices as stated in the credit agreement plus 0.75% for loans made in other permitted foreign currencies.
Demand has also been disrupted by recent changes we made to our advertising platform, and, in the future, we may 55 Table of Contents continue to experience adverse impacts to our revenue growth as a result of these changes.
Demand has also been disrupted by recent changes we made to our advertising platform, and, in the future, we may continue to experience adverse impacts to our revenue growth as a result of these changes.
We monetize our business primarily through advertising. Our advertising products include Snap Ads and AR Ads. We measure our business using ARPU because it helps us understand the rate at which we are monetizing our daily user base. ARPU was $3.29 in the fourth quarter of 2023, compared to $3.47 in the fourth quarter of 2022.
We monetize our business primarily through advertising. Our advertising products include Snap Ads and AR Ads. We measure our business using ARPU because it helps us understand the rate at which we are monetizing our daily user base. ARPU was $3.44 in the fourth quarter of 2024, compared to $3.29 in the fourth quarter of 2023.
The net proceeds from the issuance of the 2025 Notes were $888.6 million, net of debt issuance costs and the 2025 Capped Call Transactions discussed further in Note 7. The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.
The net proceeds from the issuance of the 2025 Notes were $888.6 million, net of debt issuance costs and the 2025 Capped Call Transactions discussed further in Note 7 in our consolidated financial statements. The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.
The net proceeds from the issuance of the 2026 Notes were $1.15 billion, net of debt issuance costs and the 2026 Capped Call Transactions discussed further in Note 7. The 2026 Notes mature on August 1, 2026 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.
The net proceeds from the issuance of the 2026 Notes were $1.15 billion, net of debt issuance costs and the 2026 Capped Call Transactions discussed further in Note 7 in our consolidated financial statements. The 2026 Notes mature on August 1, 2026 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.
We expect to continue to experience increased competition, which may result in reduced advertising demand, and could adversely affect our revenue growth, pricing, business, financial condition, and results of operations.
We expect to continue to experience increased competition, which may result in reduced advertising demand, and 57 Table of Contents could adversely affect our revenue growth, pricing, business, financial condition, and results of operations.
For a discussion of the limitations associated with using Adjusted EBITDA rather than GAAP measures and a reconciliation of this measure to net loss, see “Non-GAAP Financial Measures.” Liquidity and Capital Resources Cash, cash equivalents, and marketable securities were $3.5 billion as of December 31, 2023, primarily consisting of cash on deposit with banks and highly liquid investments in U.S. government and agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper.
For a discussion of the limitations associated with using Adjusted EBITDA rather than GAAP measures, and a reconciliation of this measure to net loss, see “Non-GAAP Financial Measures.” Liquidity and Capital Resources Capital Resources Cash, cash equivalents, and marketable securities were $3.4 billion as of December 31, 2024, primarily consisting of cash on deposit with banks and highly liquid investments in U.S. government and agency securities, money market funds, corporate debt securities, certificates of deposit, commercial paper, and publicly traded equity securities.
Macroeconomic factors such as labor shortages and disruptions, supply chain disruptions, inflation, changes in interest and foreign currency exchange rates, banking instability, and other risks and uncertainties continue to cause logistical challenges, increased input costs, and inventory constraints for our advertisers, which in turn may cause our advertisers to halt or decrease advertising spending on our platform.
Macroeconomic factors such as labor shortages and disruptions, supply chain disruptions, inflation, changes in interest and foreign currency exchange rates, banking instability, tariffs, war and other armed conflict, and other risks and uncertainties have in the past and may continue to cause logistical challenges, increased input costs, and inventory constraints for our advertisers, which in turn may cause our advertisers to halt or decrease advertising spending on our platform.
Free Cash Flow 2023 compared to 2022 Free Cash Flow was $34.8 million for the year ended December 31, 2023, compared to $55.3 million for the year ended December 31, 2022. Free Cash Flow in all periods was composed of net cash provided by operating activities, resulting primarily from net loss, adjusted for non-cash items and changes in working capital.
Free Cash Flow Free Cash Flow was $218.7 million for the year ended December 31, 2024, compared to $34.8 million for the year ended December 31, 2023. Free Cash Flow in all periods was composed of net cash provided by operating activities, resulting primarily from net loss, adjusted for non-cash items and changes in working capital.
Net Cash Provided by (Used in) Investing Activities 2023 compared to 2022 Net cash provided by investing activities was $571.0 million for the year ended December 31, 2023, compared to net cash used in investing activities of $1.1 billion for the year ended December 31, 2022.
Net Cash Provided by (Used in) Investing Activities Net cash used in investing activities was $717.1 million for the year ended December 31, 2024, compared to net cash provided by investing activities of $571.0 million for the year ended December 31, 2023.
Discussion of historical items and year-to-year comparisons between 2022 and 2021 that are not included in this discussion can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 1, 2023.
Discussion of historical items and year-to-year comparisons between 2023 and 2022 that are not included in this discussion can be found in “Management ’ s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 7, 2024.
The Credit Facility also contains an annual commitment fee of 0.10% on the daily undrawn balance of the facility. As of December 31, 2023, we had $49.6 million in the form of outstanding standby letters of credit, with no amounts outstanding under the Credit Facility.
The Credit Facility also contains an annual commitment fee of 0.10% on the daily undrawn balance of the facility. As of December 31, 2024, we had $80.7 million in the form of outstanding standby letters of credit, with no amounts outstanding under the Credit Facility.
Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We determine collectability by performing ongoing credit evaluations and monitoring customer accounts receivable balances. Sales tax, including value added tax, is excluded from reported revenue.
Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We determine collectability by performing ongoing credit evaluations and monitoring customer accounts receivable balances.
Overview of Full Year 2023 Results Our key user metrics and financial results for fiscal year 2023 are as follows: User Metrics • Daily Active Users, or DAUs, increased 10% year-over-year to 414 million in Q4 2023. • Average revenue per user, or ARPU, was $3.29 in Q4 2023, compared to $3.47 in Q4 2022.
Overview of Full Year 2024 Results Our key user metrics and financial results for fiscal year 2024 are as follows: User Metrics • Daily Active Users, or DAUs, increased 9% year-over-year to 453 million in Q4 2024. • Average revenue per user, or ARPU, was $3.44 in Q4 2024 compared to $3.29 in Q4 2023.
The sale price requirement for conversion was not satisfied as of December 31, 2023 and as a result, the 2025 Notes will not be eligible for optional conversion during the first quarter of 2024.
The sale price requirement for conversion was not satisfied as of December 31, 2024 and as a result, the 2030 Notes will not be eligible for optional conversion during the first quarter of 2025. As of December 31, 2024, the outstanding principal of the 2030 Notes was $750.0 million.
Cost of revenue also includes facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs. Research and Development Expenses Research and development expenses consist primarily of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our engineers, designers, and other employees engaged in the research and development of our products.
Research and Development Expenses Research and development expenses primarily consist of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our engineers, designers, and other employees engaged in the research and development of our products. Research and development expenses also include facilities and other supporting overhead costs, including depreciation and amortization. Research and development costs are expensed as incurred.
Net Cash Provided by (Used in) Financing Activities 2023 compared to 2022 Net cash used in financing activities was $458.8 million for the year ended December 31, 2023, compared to net cash provided by financing activities of $306.7 million for the year ended December 31, 2022.
Net Cash Provided by (Used in) Financing Activities Net cash used in financing activities was $428.6 million for the year ended December 31, 2024, compared to net cash used in financing activities of $458.8 million for the year ended December 31, 2023.
Trends in User Metrics We define a DAU as a registered Snapchat user who opens the Snapchat application at least once during a defined 24-hour period. We define ARPU as quarterly revenue divided by the average DAUs.
Trends in User Metrics We define a DAU as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at least once during a defined 24-hour period. We define ARPU as quarterly revenue divided by the average DAUs.
Snap Ads may be subject to revenue sharing arrangements between us and the content partner. We also generate revenue from subscriptions and sales of hardware products, net of allowances for returns.
Snap Ads may be subject to revenue sharing arrangements between us and the content partner. We also generate revenue from subscriptions and sales of hardware products. Sales of hardware products are reported net of allowances for returns. Cost of Revenue Cost of revenue includes payments for infrastructure, content and developer partner costs, and advertiser partner and other costs.
In April 2020, we entered into a purchase agreement for the sale of an aggregate of $1.0 billion principal amount of convertible senior notes due in 2025, of which $284.1 million remains outstanding as of December 31, 2023.
In April 2020, we entered into a purchase agreement for the sale of an aggregate of $1.0 billion principal amount of convertible senior notes due in 2025.
In August 2019, we entered into a purchase agreement for the sale of an aggregate of $1.265 billion principal amount of convertible senior notes due in 2026, of which $838.5 million remains outstanding as of December 31, 2023.
In August 2019, we entered into a purchase agreement for the sale of an aggregate of $1.265 billion principal amount of convertible senior notes due in 2026.
See “Non-GAAP Financial Measures” for additional information and a reconciliation of net loss to Adjusted EBITDA. 60 Table of Contents Discussion of Results of Operations The following table sets forth our consolidated statements of operations data: Year Ended December 31, 2023 2022 2021 (in thousands) Consolidated Statements of Operations Data: Revenue $ 4,606,115 $ 4,601,847 $ 4,117,048 Costs and expenses (1) (2) : Cost of revenue 2,114,117 1,815,342 1,750,246 Research and development 1,910,862 2,109,800 1,565,467 Sales and marketing 1,122,092 1,118,746 792,764 General and administrative 857,423 953,265 710,640 Total costs and expenses 6,004,494 5,997,153 4,819,117 Operating loss (1,398,379) (1,395,306) (702,069) Interest income 168,394 58,597 5,199 Interest expense (22,024) (21,459) (17,676) Other income (expense), net (42,414) (42,529) 240,175 Loss before income taxes (1,294,423) (1,400,697) (474,371) Income tax benefit (expense) (28,062) (28,956) (13,584) Net loss $ (1,322,485) $ (1,429,653) $ (487,955) Adjusted EBITDA (3) $ 161,577 $ 377,573 $ 616,686 (1) Stock-based compensation expense included in the above line items: Year Ended December 31, 2023 2022 2021 (in thousands) Stock-based compensation expense: Cost of revenue $ 9,555 $ 12,288 $ 17,221 Research and development 893,026 970,746 740,130 Sales and marketing 255,688 203,092 164,241 General and administrative 165,735 201,661 170,543 Total $ 1,324,004 $ 1,387,787 $ 1,092,135 (2) Depreciation and amortization expense included in the above line items: Year Ended December 31, 2023 2022 2021 (in thousands) Depreciation and amortization expense: Cost of revenue $ 12,751 $ 24,235 $ 19,711 Research and development 106,278 98,041 62,159 Sales and marketing 26,161 67,169 21,772 General and administrative 23,251 12,728 15,499 Total $ 168,441 $ 202,173 $ 119,141 (3) See “Non-GAAP Financial Measures” in this Annual Report on Form 10-K for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP. 61 Table of Contents The following table sets forth the components of our consolidated statements of operations data for each of the periods presented as a percentage of revenue: Year Ended December 31, 2023 2022 2021 Consolidated Statements of Operations Data: Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 46 39 43 Research and development 41 46 38 Sales and marketing 24 24 19 General and administrative 19 21 17 Total costs and expenses 130 130 117 Operating loss (30) (30) (17) Interest income 4 1 — Interest expense (1) — — Other income (expense), net (1) (1) 6 Loss before income taxes (28) (30) (12) Income tax benefit (expense) (1) (1) — Net loss (29) % (31) % (12) % Revenue Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Revenue $ 4,606,115 $ 4,601,847 $ 4,117,048 $ 4,268 — % $ 484,799 12 % 2023 compared to 2022 Revenue for the year ended December 31, 2023 increased $4.3 million compared to the same period in 2022.
See “Non-GAAP Financial Measures” for additional information and a reconciliation of net loss to Adjusted EBITDA. 63 Table of Contents Discussion of Results of Operations The following table sets forth our consolidated statements of operations data: Year Ended December 31, 2024 2023 2022 (in thousands) Consolidated Statements of Operations Data: Revenue $ 5,361,398 $ 4,606,115 $ 4,601,847 Costs and expenses (1) (2) : Cost of revenue 2,474,237 2,114,117 1,815,342 Research and development 1,691,683 1,910,862 2,109,800 Sales and marketing 1,063,675 1,122,092 1,118,746 General and administrative 919,097 857,423 953,265 Total costs and expenses 6,148,692 6,004,494 5,997,153 Operating loss (787,294) (1,398,379) (1,395,306) Interest income 153,466 168,394 58,597 Interest expense (21,552) (22,024) (21,459) Other income (expense), net (16,846) (42,414) (42,529) Loss before income taxes (672,226) (1,294,423) (1,400,697) Income tax benefit (expense) (25,630) (28,062) (28,956) Net loss $ (697,856) $ (1,322,485) $ (1,429,653) Adjusted EBITDA (3) $ 508,605 $ 161,577 $ 377,573 (1) Stock-based compensation expense included in the above line items: Year Ended December 31, 2024 2023 2022 (in thousands) Stock-based compensation expense: Cost of revenue $ 6,034 $ 9,555 $ 12,288 Research and development 683,830 893,026 970,746 Sales and marketing 216,672 255,688 203,092 General and administrative 134,487 165,735 201,661 Total $ 1,041,023 $ 1,324,004 $ 1,387,787 (2) Depreciation and amortization expense included in the above line items: Year Ended December 31, 2024 2023 2022 (in thousands) Depreciation and amortization expense: Cost of revenue $ 6,110 $ 12,751 $ 24,235 Research and development 99,656 106,278 98,041 Sales and marketing 19,947 26,161 67,169 General and administrative 32,361 23,251 12,728 Total $ 158,074 $ 168,441 $ 202,173 (3) See “Non-GAAP Financial Measures” in this Annual Report on Form 10-K for more information and for a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in accordance with GAAP. 64 Table of Contents The following table sets forth the components of our consolidated statements of operations data for each of the periods presented as a percentage of revenue: Year Ended December 31, 2024 2023 2022 Consolidated Statements of Operations Data: Revenue 100 % 100 % 100 % Costs and expenses: Cost of revenue 46 46 39 Research and development 32 41 46 Sales and marketing 20 24 24 General and administrative 17 19 21 Total costs and expenses 115 130 130 Operating loss (15) (30) (30) Interest income 3 4 1 Interest expense (1) (1) — Other income (expense), net — (1) (1) Loss before income taxes (13) (28) (30) Income tax benefit (expense) — (1) (1) Net loss (13) % (29) % (31) % Revenue Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Revenue $ 5,361,398 $ 4,606,115 $ 4,601,847 $ 755,283 16 % $ 4,268 — % 2024 compared to 2023 Revenue for the year ended December 31, 2024 increased $755.3 million compared to the same period in 2023.
Free Cash Flow also 67 Table of Contents included purchases of property and equipment of $211.7 million for the year ended December 31, 2023, compared to $129.3 million for the year ended December 31, 2022.
Free Cash Flow also included purchases of property and equipment of $194.8 million for the year ended December 31, 2024, compared to $211.7 million for the year ended December 31, 2023.
Financial Results • Revenue was $4.6 billion in 2023, compared to $4.6 billion in 2022. • Total costs and expenses were $6.0 billion in 2023, compared to $6.0 billion in 2022. • Net loss was $1.3 billion in 2023, compared to $1.4 billion in 2022 . • Adjusted EBITDA was $161.6 million in 2023, compared to $377.6 million in 2022. • Diluted net loss per share was $(0.82) in 2023, compared to $(0.89) in 2022. • Cash provided by operating activities was $246.5 million in 2023, compared to $184.6 million in 2022. • Free Cash Flow was $34.8 million in 2023 , compared to $55.3 million in 2022 . • Cash, cash equivalents, and marketable securities were $3.5 billion as of December 31, 2023.
Financial Results • Revenue was $5.4 billion, compared to $4.6 billion in the prior year, an increase of 16% year-over-year. • Total costs and expenses were $6.1 billion, compared to $6.0 billion in the prior year. • Net loss was $0.7 billion, compared to $1.3 billion in the prior year . • Adjusted EBITDA was $508.6 million, compared to $161.6 million in the prior year. • Diluted net loss per share was $(0.42), compared to $(0.82) in the prior year. • Cash provided by operating activities was $413.5 million, compared to $246.5 million in the prior year. • Free Cash Flow was $218.7 million, compared to $34.8 million in the prior year. • Cash, cash equivalents, and marketable securities were $3.4 billion as of December 31, 2024.
Cost of Revenue Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Cost of Revenue $ 2,114,117 $ 1,815,342 $ 1,750,246 $ 298,775 16 % $ 65,096 4 % 2023 compared to 2022 Cost of revenue for the year ended December 31, 2023 increased $298.8 million compared to the same period in 2022.
Cost of Revenue Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Cost of Revenue $ 2,474,237 $ 2,114,117 $ 1,815,342 $ 360,120 17 % $ 298,775 16 % 2024 compared to 2023 Cost of revenue for the year ended December 31, 2024 increased $360.1 million compared to the same period in 2023.
Business and Macroeconomic Conditions In 2022, we realigned our priorities and we expect to continue to focus on our three strategic priorities: growing our community and deepening their engagement with our products, accelerating and diversifying our revenue growth, and investing in the future of augmented reality.
Business and Macroeconomic Conditions We periodically make changes to our business and priorities. In recent years, we conducted a strategic reprioritization to realign our focus on three strategic priorities: growing our community and deepening their engagement with our products, accelerating and diversifying our revenue growth, and investing in the future of augmented reality.
Interest Expense Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Interest Expense $ (22,024) $ (21,459) $ (17,676) $ (565) 3 % $ (3,783) 21 % 2023 compared to 2022 Interest expense for the year ended December 31, 2023 increased $0.6 million compared to the same period in 2022.
Interest Expense Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Interest Expense $ (21,552) $ (22,024) $ (21,459) $ 472 (2) % $ (565) 3 % 2024 compared to 2023 Interest expense for the year ended December 31, 2024 decreased $0.5 million compared to the same period in 2023.
Net cash provided by operating activities for the year ended December 31, 2023 was also driven by a $95.0 million increase in accounts payable and a $62.1 million increase in accrued expenses and other current liabilities, primarily due to the timing of payments, partially offset by a $98.1 million increase in accounts receivables due to the timing of collections and an increase in billings in the period.
Net cash provided by operating activities for the year ended December 31, 2024 was also driven by a $150.4 million increase in accrued expenses and other current liabilities, offset by a 70 Table of Contents $100.7 million decrease in accounts payable and a $94.0 million increase in accounts receivables due to the timing of collections and an increase in billings in the period.
Other Income (Expense), Net Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Other Income (Expense), Net $ (42,414) $ (42,529) $ 240,175 $ 115 — % $ (282,704) (118) % 2023 compared to 2022 Other expense, net for the year ended December 31, 2023 was $42.4 million, compared to other expense, net of $42.5 million for the same period in 2022 .
Other Income (Expense), Net Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Other Income (Expense), Net $ (16,846) $ (42,414) $ (42,529) $ 25,568 60 % $ 115 — % 2024 compared to 2023 Other expense, net for the year ended December 31, 2024 was $16.8 million, compared to other expense, net of $42.4 million for the same period in 2023 .
(3) Europe includes Russia and Turkey. Rest of World YOY growth: 41 % 36 % 35 % 34 % 31 % 27 % 25 % 21 % 19 % Monetization In the year ended December 31, 2023, we recorded revenue of $4.6 billion compared to $4.6 billion for the year ended December 31, 2022.
(3) Europe includes Russia and Turkey. 59 Table of Contents Rest of World YoY growth: 31 % 27 % 25 % 21 % 19 % 19 % 16 % 16 % 17 % Monetization We recorded revenue of $5.4 billion for the year ended December 31, 2024, compared to revenue of $4.6 billion for the year ended December 31, 2023, an increase of 16% year-over-year.
Sales and Marketing Expenses Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Sales and Marketing Expenses $ 1,122,092 $ 1,118,746 $ 792,764 $ 3,346 — % $ 325,982 41 % 2023 compared to 2022 Sales and marketing expenses for the year ended December 31, 2023 increased $3.3 million compared to the same period in 2022.
Sales and Marketing Expenses Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Sales and Marketing Expenses $ 1,063,675 $ 1,122,092 $ 1,118,746 $ (58,417) (5) % $ 3,346 — % 2024 compared to 2023 Sales and marketing expenses for the year ended December 31, 2024 decreased $58.4 million compared to the same period in 2023.
General and Administrative Expenses Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) General and Administrative Expenses $ 857,423 $ 953,265 $ 710,640 $ (95,842) (10) % $ 242,625 34 % 2023 compared to 2022 General and administrative expenses for the year ended December 31, 2023 decreased $95.8 million compared to the same period in 2022.
General and Administrative Expenses Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) General and Administrative Expenses $ 919,097 $ 857,423 $ 953,265 $ 61,674 7 % $ (95,842) (10) % 2024 compared to 2023 General and administrative expenses for the year ended December 31, 2024 increased $61.7 million compared to the same period in 2023.
We believe our existing cash balance in the United States is sufficient to fund our working capital needs. 66 Table of Contents The following table sets forth the major components of our consolidated statements of cash flows for the periods presented: Year Ended December 31, 2023 2022 2021 (dollars in thousands) Net cash provided by (used in) operating activities $ 246,521 $ 184,614 $ 292,880 Net cash provided by (used in) investing activities 570,954 (1,062,275) 90,227 Net cash provided by (used in) financing activities (458,789) 306,714 1,065,073 Change in cash, cash equivalents, and restricted cash $ 358,686 $ (570,947) $ 1,448,180 Free Cash Flow (1) $ 34,794 $ 55,308 $ 223,005 (1) For information on how we define and calculate Free Cash Flow and a reconciliation to net cash provided by (used in) operating activities to Free Cash Flow, see “Non-GAAP Financial Measures.” Net Cash Provided by (Used in) Operating Activities 2023 compared to 2022 Net cash provided by operating activities was $246.5 million for the year ended December 31, 2023, compared to net cash provided by operating activities of $184.6 million for the year ended December 31, 2022, resulting primarily from our net loss, adjusted for non-cash items, including stock-based compensation expense of $1.3 billion and depreciation and amortization expense of $168.4 million.
Sources and Uses of Cash and Related Trends The following table sets forth the major components of our consolidated statements of cash flows for the periods presented: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 413,480 $ 246,521 $ 184,614 Net cash provided by (used in) investing activities (717,084) 570,954 (1,062,275) Net cash provided by (used in) financing activities (428,624) (458,789) 306,714 Change in cash, cash equivalents, and restricted cash $ (732,228) $ 358,686 $ (570,947) Free Cash Flow (1) $ 218,654 $ 34,794 $ 55,308 (1) For information on how we define and calculate Free Cash Flow, and a reconciliation to net cash provided by (used in) operating activities to Free Cash Flow, see “Non-GAAP Financial Measures.” Net Cash Provided by (Used in) Operating Activities Net cash provided by operating activities was $413.5 million for the year ended December 31, 2024, compared to net cash provided by operating activities of $246.5 million for the year ended December 31, 2023, resulting primarily from our net loss, adjusted for non-cash items, including stock-based compensation expense of $1,041.0 million and depreciation and amortization expense of $158.1 million.
General and administrative expenses also include facilities and supporting overhead costs, including depreciation and amortization, and external professional services. 59 Table of Contents Interest Income Interest income consists primarily of interest earned on our cash, cash equivalents, and marketable securities.
General and administrative expenses also include facilities and supporting overhead costs, including depreciation and amortization, and external professional services. Interest Income Interest income primarily consists of interest earned on our cash, cash equivalents, and marketable securities. Interest Expense Interest expense primarily consists of interest expense associated with convertible notes and commitment fees related to our revolving credit facility.
Net Loss and Adjusted EBITDA Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Net Loss $ (1,322,485) $ (1,429,653) $ (487,955) $ 107,168 7 % $ (941,698) (193) % Adjusted EBITDA $ 161,577 $ 377,573 $ 616,686 $ (215,996) (57) % $ (239,113) (39) % 2023 compared to 2022 Net loss for the year ended December 31, 2023 was $1,322.5 million, compared to $1,429.7 million for the same period in 2022.
Net Loss and Adjusted EBITDA Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Net Loss $ (697,856) $ (1,322,485) $ (1,429,653) $ 624,629 47 % $ 107,168 7 % Adjusted EBITDA $ 508,605 $ 161,577 $ 377,573 $ 347,028 215 % $ (215,996) (57) % 2024 compared to 2023 Net loss for the year ended December 31, 2024 was $697.9 million, compared to $1,322.5 million for the same period in 2023.
Other expense, net in the comparable period in 2022 was primarily a result of $101.3 million in total losses on publicly traded securities primarily classified as marketable securities, offset by $19.9 million in unrealized gains and $45.9 million in realized gains on strategic investments. 64 Table of Contents Income Tax Benefit (Expense) Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Income Tax Benefit (Expense) $ (28,062) $ (28,956) $ (13,584) $ 894 3 % $ (15,372) (113) % Effective Tax Rate (2.2) % (2.1) % (2.9) % 2023 compared to 2022 Income tax expense was $28.1 million for the year ended December 31, 2023 , compared to $29.0 million for the same period in 2022 .
Other expense, net in the prior year was primarily the result of $27.1 million in net losses on strategic investments and $6.7 million in net losses on publicly traded securities classified as marketable securities. 67 Table of Contents Income Tax Benefit (Expense) Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Income Tax Benefit (Expense) $ (25,630) $ (28,062) $ (28,956) $ 2,432 9 % $ 894 3 % Effective Tax Rate (3.8) % (2.2) % (2.1) % 2024 compared to 2023 Income tax expense was $25.6 million for the year ended December 31, 2024 , compared to $28.1 million for the same period in 2023 .
We continually evaluate opportunities to issue or repurchase equity or debt securities, obtain, retire, or restructure credit facilities or financing arrangements, or declare dividends for strategic reasons or to further strengthen our financial position. As of December 31, 2023, approximately 3% of our cash, cash equivalents, and marketable securities was held outside the United States.
We continually evaluate opportunities to issue or repurchase equity or debt securities, obtain, retire, or restructure credit facilities or financing arrangements, or declare dividends for strategic reasons or to further strengthen our financial position.
In April 2021, we entered into a purchase agreement for the sale of an aggregate of $1.15 billion principal amount of convertible senior notes due in 2027. The net proceeds from the issuance of the 2027 Notes were $1.05 billion, net of debt issuance costs and the 2027 Capped Call Transactions discussed further in Note 7.
In April 2021, we entered into a purchase agreement for the sale of an aggregate of $1.15 billion principal amount of convertible senior notes due in 2027.
These amounts were primarily held in the United Kingdom and are utilized to fund our foreign operations. Cash held outside the United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations. However, repatriation of funds may result in additional tax liabilities.
Cash held outside the United States may be repatriated, subject to certain limitations, and 68 Table of Contents would be available to be used to fund our domestic operations. However, repatriation of funds may result in additional tax liabilities. We believe our existing cash balance in the United States is sufficient to fund our working capital needs.
Our investing activities for the year ended December 31, 2022 consisted of purchases of marketable securities of $3.5 billion, partially offset by maturities of marketable securities of $2.5 billion.
Our investing activities for the year ended December 31, 2024 primarily consisted of purchases of marketable securities of $2.3 billion and purchases of property and equipment of $194.8 million, partially offset by maturities of marketable securities of $1.4 billion and sales of marketable securities of $354.3 million.
Our financing activities for the year ended December 31, 2022 consisted primarily of net proceeds of $1.5 billion from the issuance of the 2028 Notes, offset by the purchase of the 2028 Capped Call Transactions of $177.0 million and repurchases of our Class A common stock for an aggregate of $1.0 billion.
Our financing activities for the year ended December 31, 2024 primarily consisted of the Note Repurchases for $859.0 million, repurchases of our Class A common stock for $311.1 million, and the purchase of the 2030 Capped Call Transactions for $68.9 million, partially offset by the issuance of the 2030 Notes for net proceeds of $740.4 million and the termination of the 2025 Capped Call Transactions for proceeds of $62.7 million.
In February 2022, we entered into a purchase agreement for the sale of an aggregate of $1.5 billion principal amount of convertible senior notes due in 2028. The net proceeds from the issuance of the 2028 Notes were $1.31 billion, net of debt issuance costs and the 2028 Capped Call Transactions discussed further in Note 7.
In February 2022, we entered into a purchase agreement for the sale of an aggregate of $1.50 billion principal amount of convertible senior notes due in 2028.
The substantial majority of advertising revenue is generated from the display of advertisements on Snapchat through contractual agreements that are either based on the number of advertising impressions delivered or on a fixed fee basis over a period of time. Revenue related to agreements based on the number of impressions delivered is recognized when the advertisement is served.
AR Ads include Sponsored Lenses, which allow users to interact with an advertiser’s brand by enabling branded augmented reality experiences. The substantial majority of advertising revenue is generated from the display of advertisements on Snapchat through contractual agreements that are either based on the number of advertising impressions delivered or on a fixed fee basis over a period of time.
We record a provision for a liability when we believe that it is both probable that a liability has been incurred and the amount can be reasonably estimated. When there appears to be a range of possible costs with equal likelihood, a liability is recorded based on the low-end of such range.
When there appears to be a range of possible costs with equal likelihood, a liability is recorded based on the low-end of such range.
See Note 18 to our consolidated financial statements included in the “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for more information. Contingencies We are involved in claims, lawsuits, tax matters, government investigations, and proceedings arising in the ordinary course of our business.
See Note 18 to our consolidated financial statements included in the “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K for more information. Critical Accounting Estimates We prepare our financial statements in accordance with GAAP.
Sales and marketing expenses also include costs incurred for advertising, market research, tradeshows, branding, marketing, promotional expense, and public relations, as well as facilities and other supporting overhead costs, including depreciation and amortization.
Sales and marketing expenses also include costs incurred for advertising, market research, tradeshows, branding, marketing, promotional expense, and public relations, as well as facilities and other supporting overhead costs, including depreciation and amortization. 62 Table of Contents General and Administrative Expenses General and administrative expenses primarily consist of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our finance, legal, information technology, human resources, and other administrative teams.
The 2028 Notes mature on March 1, 2028 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2023 and as a result, the 2028 Notes will not be eligible for optional conversion during the first quarter of 2024.
The sale price requirement for conversion was not satisfied as of December 31, 2024 and as a result, the 2028 Notes will not be eligible for optional conversion during the first quarter of 2025. As of December 31, 2024, the outstanding principal of the 2028 Notes was $1.50 billion.
The 2027 Notes mature on May 1, 2027 unless repurchased, redeemed, or converted in accordance with their terms prior to such date. The sale price requirement for conversion was not satisfied as of December 31, 2023 and as a result, the 2027 Notes will not be eligible for optional conversion during the first quarter of 2024.
The sale price requirement for conversion was not satisfied as of December 31, 2024 and as a result, the 2027 Notes will not be eligible for optional conversion during the first quarter of 2025. As of December 31, 2024, the outstanding principal of the 2027 Notes was $1.15 billion.
Adjusted EBITDA for the year ended December 31, 2023 was $161.6 million, compared to $377.6 million for the same period in 2022. The decrease in Adjusted EBITDA was attributable to increased cost of revenue and sales and marketing expenses, partially offset by decreased research and development and general and administrative expenses.
The increase in Adjusted EBITDA was attributable to increased revenue, lower research and development expenses, and lower sales and marketing expenses, partially offset by higher cost of revenue and general and administrative expenses.
The decrease was primarily driven by lower cash- and stock-based compensation expenses due to decreased headcount compared to the prior period and $78.9 million relating to restructuring charges in the prior period.
The decrease was primarily driven by lower employee compensation, which included a $39.0 million decrease in stock-based compensation expenses. The lower employee compensation was primarily due to a decrease in sales and marketing headcount compared to the prior year.
Revenue related to fixed fee arrangements is recognized ratably over the service period, typically less than 30 days in duration, and such arrangements do not contain minimum impression guarantees. In arrangements where another party is involved in providing specified services to a customer, we evaluate whether we are the principal or agent.
Revenue related to agreements based on the number of impressions delivered is recognized when the advertisement is served. Revenue related to fixed fee arrangements is recognized ratably over the service period, typically less than 30 days in duration, and such arrangements do not contain minimum impression guarantees.
We generate substantially all of our revenues by offering various advertising products on Snapchat, which include Snap Ads and AR Ads, referred to as advertising revenue. AR Ads include Sponsored Lenses, which allow users to interact with an advertiser’s brand by enabling branded augmented reality experiences.
Sales tax, including value added tax, is excluded from reported revenue. 73 Table of Contents We generate substantially all of our revenues by offering various advertising products on Snapchat, which include Snap Ads and AR Ads, referred to as advertising revenue.
The sale price requirement for conversion was not satisfied as of December 31, 2023 and as a result, the 2026 Notes will not be eligible for optional conversion during the first quarter of 2024. We believe our existing cash balance is sufficient to fund our ongoing working capital, investing, and financing requirements for at least the next 12 months.
The sale price requirement for conversion was not satisfied as of December 31, 2024 and as a 69 Table of Contents result, the 2026 Notes will not be eligible for optional conversion during the first quarter of 2025. As of December 31, 2024, the outstanding principal of the 2026 Notes was $249.8 million.
Quarterly Average Daily Active Users (1) (in millions) Global YOY growth: 20% 18% 18% 19% 17% 15% 14% 12% 10% (1) Numbers may not foot due to rounding. 56 Table of Contents North America (2) Europe (3) YOY growth: 6% 5% 4% 4% 3% 3% 2% 1% —% 11% 10% 10% 11% 12% 10% 9% 7% 4% (2) North America includes Mexico, the Caribbean, and Central America.
We had 453 million DAUs on average in the fourth quarter of 2024, an increase of 39 million, or 9%, from the fourth quarter of 2023. 58 Table of Contents Quarterly Average Daily Active Users (1) (in millions) Global YoY growth: 17% 15% 14% 12% 10% 10% 9% 9% 9% (1) Numbers may not foot due to rounding.
Interest Expense Interest expense consists primarily of interest expense associated with convertible notes and commitment fees related to our revolving credit facility. Other Income (Expense), Net Other income (expense), net primarily consists of gains and losses on strategic investments, marketable securities, and foreign currency transactions.
Other Income (Expense), Net Other income (expense), net primarily consists of gains and losses on strategic investments, marketable securities, and foreign currency transactions. Income Tax Benefit (Expense) We are subject to income taxes in the United States and numerous foreign jurisdictions.
Cost of Revenue Cost of revenue consists of payments to third-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth costs, and payments for content, developer, and advertiser partner costs. In addition, cost of revenue includes third-party selling costs and personnel-related costs, including salaries, benefits, and stock-based compensation expenses.
Infrastructure costs primarily consist of payments to th ird-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth. Content and developer partner costs primarily consist of fees paid to our content creators and publisher partners who share content on our platform through revenue sharing arrangements.
The increase was primarily driven by increased infrastructure costs attributable to DAU growth and investments in machine learning and AI, partially offset by lower content and advertising partner costs and $20.6 million relating to restructuring charges in the prior period. 62 Table of Contents Research and Development Expenses Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) Research and Development Expenses $ 1,910,862 $ 2,109,800 $ 1,565,467 $ (198,938) (9) % $ 544,333 35 % 2023 compared to 2022 Research and development expenses for the year ended December 31, 2023 decreased $198.9 million compared to the same period in 2022.
Research and Development Expenses Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Research and Development Expenses $ 1,691,683 $ 1,910,862 $ 2,109,800 $ (219,179) (11) % $ (198,938) (9) % 2024 compared to 2023 Research and development expenses for the year ended December 31, 2024 decreased $219.2 million compared to the same period in 2023.
Should any of these estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows. 69 Table of Contents Commitments We have non-cancelable contractual agreements primarily related to the hosting of our data processing, storage, and other computing services, as well as lease, content and developer partner, and other commitments.
Contractual Commitments We have non-cancelable contractual agreements primarily related to the hosting of our data processing, storage, and other computing services, as well as lease, content and developer partner, and other commitments. We had $4.9 billion in commitments as of December 31, 2024, primarily due within three years.
Other expense, net for the current year was primarily a result of $28.4 million in unrealized losses on strategic investments and $6.7 million in total losses on publicly traded securities classified as marketable securities.
Other expense, net for the current year was primarily the result of $7.4 million in net losses on strategic investments and a $6.7 million net loss on extinguishment associated with the Note Repurchases, which is discussed within Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The decrease was primarily driven by lower personnel expenses, including cash- and stock-based compensation expenses compared to the prior period, and $58.7 million relating to restructuring charges in the prior period. 63 Table of Contents Interest Income Year Ended December 31, 2023 vs 2022 Change 2022 vs 2021 Change 2023 2022 2021 $ % $ % (dollars in thousands) (NM = Not Meaningful) Interest Income $ 168,394 $ 58,597 $ 5,199 $ 109,797 187 % $ 53,398 NM 2023 compared to 2022 Interest income for the year ended December 31, 2023 increased $109.8 million compared to the same period in 2022, primarily due to higher interest rates on U.S. government-backed securities, offset by a lower overall invested cash balance.
Interest Income Year Ended December 31, 2024 vs 2023 Change 2023 vs 2022 Change 2024 2023 2022 $ % $ % (dollars in thousands) Interest Income $ 153,466 $ 168,394 $ 58,597 $ (14,928) (9) % $ 109,797 187 % 2024 compared to 2023 Interest income for the year ended December 31, 2024 decreased $14.9 million compared to the same period in 2023, primarily driven by lower invested cash balances throughout the year and lower interest rates from macroeconomic events.
We had $3.0 billion in commitments, as of December 31, 2023, primarily due within three years. For additional discussion on our leases, see Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Critical Accounting Policies and Estimates We prepare our financial statements in accordance with GAAP.
For additional discussion on our leases, see Note 9 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Stock Repurchases In October 2024, our board of directors authorized a stock repurchase program of up to $500.0 million of our Class A common stock.
DAUs are broken out by geography because markets have different characteristics . We had 414 million DAUs on average in the fourth quarter of 2023, an increase of 39 million, or 10%, from the fourth quarter of 2022.
DAUs are broken out by geography because markets have different characteristics .
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In addition, research and development expenses include facilities and other supporting overhead costs, including depreciation and amortization. Research and development costs are expensed as incurred.
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North America (2) Europe (3) YoY growth: 3% 3% 2% 1% —% (1)% —% —% (1)% 12% 10% 9% 7% 4% 4% 3% 4% 4% (2) North America includes Mexico, the Caribbean, and Central America.
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General and Administrative Expenses General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, and stock-based compensation expense for our finance, legal, information technology, human resources, and other administrative teams.
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Under these arrangements, we pay a portion of the fees we receive from advertisers for Snap Ads that are displayed within partner content on Snapchat. Advertising partner and other costs primarily consist of payments to third-party partners for fulfillment services, credit card and other transaction processing fees, and other expenses directly related to providing our services.
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Income Tax Benefit (Expense) We are subject to income taxes in the United States and numerous foreign jurisdictions. These foreign jurisdictions have different statutory tax rates than the United States. Additionally, certain of our foreign earnings may also be taxable in the United States.
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Cost of revenue includes personnel-related costs, including salaries, benefits, and stock-based compensation expense for our employees engaged in the delivery of our services. Cost of revenue also includes facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe had marketable securities totaling $1.8 billion and $2.5 billion at December 31, 2023 and December 31, 2022, respectively. Our cash and cash equivalents consist of cash in bank accounts and marketable securities consisting of U.S. government debt and agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper.
Biggest changeOur cash and cash equivalents primarily consist of cash in bank accounts and money market funds, and our marketable securities consist of U.S. government debt and agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper. The primary objectives of our investment activities are to preserve principal and provide liquidity without significantly increasing risk.
In April 2021, we issued the 2027 Notes with an aggregate principal amount of $1.15 billion, the full amount of which is outstanding as of December 31, 2023. We carry the 2027 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
In April 2021, we issued the 2027 Notes with an aggregate principal amount of $1.15 billion, the full amount of which is outstanding as of December 31, 2024. We carry the 2027 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
The 2025 Notes have a fixed interest rate; therefore, we have no financial statement risk associated with changes in interest rates with respect to the 2025 Notes. The fair value of the 2025 Notes changes when the market price of our stock fluctuates or market interest rates change.
The 2030 Notes have a fixed interest rate; therefore, we have no financial statement risk associated with changes in interest rates with respect to the 2030 Notes. The fair value of the 2030 Notes changes when the market price of our stock fluctuates or market interest rates change.
In February 2022, we issued the 2028 Notes with an aggregate principal amount of $1.5 billion, the full amount of which is outstanding as of December 31, 2023. We carry the 2028 Notes at face value less the unamortized debt issuance 71 Table of Contents costs on our consolidated balance sheets.
In February 2022, we issued the 2028 Notes with an aggregate principal amount of $1.5 billion, the full amount of which is outstanding as of December 31, 2024. We carry the 2028 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
In April 2020, we issued the 2025 Notes with an aggregate principal amount of $1.0 billion, of which $284.1 million remains outstanding as of December 31, 2023. We carry the 2025 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
In April 2020, we issued the 2025 Notes with an aggregate principal amount of $1.0 billion, of which $36.2 million remains outstanding as of December 31, 2024. We carry the 2025 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
In August 2019, we issued the 2026 Notes with an aggregate principal amount of $1.265 billion, of which $838.5 million remains outstanding as of December 31, 2023. We carry the 2026 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
In August 2019, we issued the 2026 Notes with an aggregate principal amount of $1.265 billion, of which $249.8 million remains outstanding as of December 31, 2024. We carry the 2026 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
For the periods presented, we believe the exposure to foreign currency fluctuation from operating expenses is immaterial as the related costs do not constitute a significant portion of our total expenses. As we grow operations, our exposure to foreign currency risk will likely become more significant. For the periods presented, we did not enter into any foreign currency exchange contracts.
For the periods presented, we believe the exposure to foreign currency fluctuation from operating expenses is immaterial as the related costs do not constitute a significant portion of our total expenses. As we grow operations, our exposure to foreign currency risk will likely become more significant.
Due to the relatively short-term nature of our investment portfolio, a hypothetical 100 basis point change in interest rates would not have a material effect on the fair value of our portfolio for the periods presented.
We do not enter into investments for trading or speculative purposes. Due to the relatively short-term nature of our investment portfolio, a hypothetical 100 basis point change in interest rates would not have a material effect on the fair value of our portfolio for the periods presented.
We may, however, enter into foreign currency exchange contracts for purposes of hedging foreign exchange rate fluctuations on our business operations in future operating periods as our exposures are deemed to be material. For additional discussion on foreign currency risk, see “Risk Factors” elsewhere in this Annual Report on Form 10-K. 72 Table of Contents
For the periods presented, we did not enter into any forward foreign currency exchange contracts. We may, however, enter into forward foreign currency exchange contracts for purposes of hedging foreign exchange rate fluctuations on our business operations in future operating periods as our exposures are deemed to be material.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to market risks in the ordinary course of our business. These risks primarily include interest rate risk and foreign currency risk as follows: Interest Rate Risk We had cash and cash equivalents totaling $1.8 billion and $1.4 billion at December 31, 2023 and December 31, 2022, respectively.
These risks primarily include interest rate risk, foreign currency risk and equity price risk as follows: Interest Rate Risk We had cash and cash equivalents totaling $1.0 billion and $1.8 billion as of December 31, 2024 and December 31, 2023, respectively.
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The primary objectives of our investment activities are to preserve principal and provide liquidity without significantly increasing risk. We do not enter into investments for trading or speculative purposes.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to market risks in the ordinary course of our business.
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We had marketable securities totaling $2.3 billion and $1.8 billion as of December 31, 2024 and December 31, 2023, respectively.
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In May 2024, we issued the 2030 Notes with an aggregate principal amount of $750.0 million, the full amount of which is outstanding as of December 31, 2024. We carry the 2030 Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets.
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The 2025 Notes have a fixed interest rate; therefore, we have no 75 Table of Contents financial statement risk associated with changes in interest rates with respect to the 2025 Notes. The fair value of the 2025 Notes changes when the market price of our stock fluctuates or market interest rates change.
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For additional discussion on foreign currency risk, see “Risk Factors” elsewhere in this Annual Report on Form 10-K. Equity Price Risk We hold equity securities in privately held and publicly traded companies, which are subject to equity price risks that could have a material impact on the carrying value of our holdings.
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Our strategic investments in privately held companies primarily consist of equity securities without readily determinable fair values. We adjust the carrying value of these equity securities to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment. All strategic investments are reviewed periodically for impairment.
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Our investments in publicly traded equity securities are recorded at fair value using quoted market prices. Uncertainties in the global economic climate and financial markets could adversely impact the valuation of these investments and result in a material impairment or downward adjustment of their carrying values.
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Our total strategic investments had carrying values of $188.3 million and $195.3 million as of December 31, 2024 and 2023, respectively. Our investments in publicly traded equity securities had carrying values of $12.4 million and $13.6 million as of December 31, 2024 and 2023, respectively. 76 Table of Contents

Other SNAP 10-K year-over-year comparisons