Snap Inc. Third Quarter 2017 Results • Hacker News Board

Re: Snap Inc. Third Quarter 2017 Results

#31

Post by hkmurakami » Tue, Nov 07, 2017, 10:31 PM UTC

rgbrenner wrote: post #28

liquidise wrote: post #21

> Hosting costs per DAU were $0.68 in Q3 2017 as compared to $0.64 in Q3 2016 and $0.61 in Q2 2017. Those are staggering figures to me and the trend is equally surprising. Maybe it's ignorance about hosting costs at such a scale, but i feel like cost/DAU should be declining over time, right? Is there something i'm missing here?

They have to receive the picture, then send it to a number of other users. So it's probably mostly bandwidth charges. They use Google, right? When was the last time Google (or any of the cloud providers) lowered their bandwidth charges? That small fluctuation is probably just minor variations in usage.

Yes they have a giant contract with GCP https://www.recode.net/2017/3/1/14661126/snap-snapchat-ipo-s...

Re: Snap Inc. Third Quarter 2017 Results

#32

Post by Mrtierne » Tue, Nov 07, 2017, 10:35 PM UTC

ProAm wrote: post #3

Oof, that is a staggering quarterly loss, how long will investors be willing to tolerate that when there are competitors active now in that industry, mainly instagram.

It's looking like investors are interested to know what the real value of the stock is. There's still a large audience to monetize but you're right the competitive set is crazy.

Re: Snap Inc. Third Quarter 2017 Results

#33

Post by lpolovets » Tue, Nov 07, 2017, 10:36 PM UTC

blin17 wrote: post #24

liquidise wrote: post #21

> Hosting costs per DAU were $0.68 in Q3 2017 as compared to $0.64 in Q3 2016 and $0.61 in Q2 2017. Those are staggering figures to me and the trend is equally surprising. Maybe it's ignorance about hosting costs at such a scale, but i feel like cost/DAU should be declining over time, right? Is there something i'm missing here?

Is this a monthly cost or yearly?

I think it's quarterly. (i.e. the annual hosting cost per user is a little over $2.50)

Re: Snap Inc. Third Quarter 2017 Results

#34

Post by nl » Tue, Nov 07, 2017, 10:38 PM UTC

addicted wrote: post #17

nl wrote: post #16

Earlier quoted context omitted.

Sort-of, but it's a once-off: Net loss for the nine months ended September 30, 2017 includes $2.5 billion of stock-based compensation expense, primarily due to the recognition of expense related to RSUs with a performance condition satisfied on the effectiveness of the registration statement for our initial public offering.

Still leaves ~600mm in losses. Which is still greater than the ~350mm in losses last year. The idea that money given to employees as equity is not "real money" is toxic.

The idea that money given to employees as equity is not "real money" is toxic.

Stock-based compensation isn't the same as cash. It has both costs and benefits, but saying it is "toxic" seems overreach.

Re: Snap Inc. Third Quarter 2017 Results

#35

Post by WillPostForFood » Tue, Nov 07, 2017, 10:38 PM UTC

addicted wrote: post #17

nl wrote: post #16

Earlier quoted context omitted.

Sort-of, but it's a once-off: Net loss for the nine months ended September 30, 2017 includes $2.5 billion of stock-based compensation expense, primarily due to the recognition of expense related to RSUs with a performance condition satisfied on the effectiveness of the registration statement for our initial public offering.

Still leaves ~600mm in losses. Which is still greater than the ~350mm in losses last year. The idea that money given to employees as equity is not "real money" is toxic.

Speaking as someone who has received equity several times, it is not real money.

Re: Snap Inc. Third Quarter 2017 Results

#36

Post by nl » Tue, Nov 07, 2017, 10:39 PM UTC

chipgap98 wrote: post #30

addicted wrote: post #17

Earlier quoted context omitted.

Still leaves ~600mm in losses. Which is still greater than the ~350mm in losses last year. The idea that money given to employees as equity is not "real money" is toxic.

Why? Don't most companies separate out their stock based compensation expenses?

Of course they do. And most separate out special expenses too.

Re: Snap Inc. Third Quarter 2017 Results

#37

Post by dragonwriter » Tue, Nov 07, 2017, 10:44 PM UTC

addicted wrote: post #17

nl wrote: post #16

Earlier quoted context omitted.

Sort-of, but it's a once-off: Net loss for the nine months ended September 30, 2017 includes $2.5 billion of stock-based compensation expense, primarily due to the recognition of expense related to RSUs with a performance condition satisfied on the effectiveness of the registration statement for our initial public offering.

Still leaves ~600mm in losses. Which is still greater than the ~350mm in losses last year. The idea that money given to employees as equity is not "real money" is toxic.

> The idea that money given to employees as equity is not "real money" is toxic.

Equity is not money, and employee-owned equity often isn't easy to convert to money, especially in non-public firms (but even in public firms, employees are often bound by insider-trading rules.)

Of course, costs associated with equity-based compensation are real costs to the firm, independent of the fact that equity is not money.

Re: Snap Inc. Third Quarter 2017 Results

#38

Post by atom-morgan » Tue, Nov 07, 2017, 10:44 PM UTC

addicted wrote: post #17

nl wrote: post #16

Earlier quoted context omitted.

Sort-of, but it's a once-off: Net loss for the nine months ended September 30, 2017 includes $2.5 billion of stock-based compensation expense, primarily due to the recognition of expense related to RSUs with a performance condition satisfied on the effectiveness of the registration statement for our initial public offering.

Still leaves ~600mm in losses. Which is still greater than the ~350mm in losses last year. The idea that money given to employees as equity is not "real money" is toxic.

Am I the only one who finds the % change between $350mm and $600mm marked as "not meaningful" to be a bit odd?

Re: Snap Inc. Third Quarter 2017 Results

#39

Post by jondubois » Tue, Nov 07, 2017, 10:47 PM UTC

rblion wrote: post #25

How long do you think they have left? OR Do you foresee them surviving beyond 2027?

- They lost $3 Billion in 9 months.

- For every $6 they spent, they got back $1 in revenue.

- The product is an app which is free to use.

- A large chunk of their system runs on Google App Engine; which is probably the most expensive and highest lock-in infrastructure solution that you could possibly use.

- The CEO, who was basically fresh out of university, turned down a $4 Billion offer buy the company.

So basically; they're a company which loses money at an incredible rate on a product which is nearly impossible to monetise and with an inexperienced and irrational person as a CEO. I'm surprised it still exists tbh.

No sane rational person can look at those numbers and think that it's a good investment.

Re: Snap Inc. Third Quarter 2017 Results

#40

Post by spike021 » Tue, Nov 07, 2017, 10:47 PM UTC

giarc wrote: post #8

sjg007 wrote: post #4

Earlier quoted context omitted.

The kids still snapchat so... me thinks a while.

What kids? Kids with credit cards or kids where most purchases are made by parents and therefore hard to link back to ads shown on SnapChat? I'm in my 30's and don't know too many people that use SnapChat... so when people say "young kids use SnapChat" I'm not sure if that means 13-18 year olds or 18-29 year olds or something.

I'm 25 and many friends still use Snapchat. I think the trend is slowly moving to Instagram (which I prefer), but the usage with Snapchat still exists for sure.