Snap Inc.

Good afternoon, everyone, and welcome to SNAP Inc.' 's first quarter 2022 earnings conference call. At this time, participants are in a listen-only mode. After the prepared remarks, there will be a question and answer session. If you would like to ask a question during that time, please press star, then the number one on your telephone keypad. This call will be recorded. Thank you very much, David O. Meter, Head of Investor Relations. You may begin.

Thank you, and good afternoon, everyone. Welcome to Snap's first quarter 2022 earnings conference call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder, Jeremy Gorman, Chief Business Officer, and Derek Anderson, Chief Financial Officer. Please refer to our investor relations website at investor.snap.com to find today's press release, slides, prepared remarks, and our updated investor presentations. This conference call includes forward-looking statements, which are based on our assumptions as of today. Actual results may differ materially from those expressed in these forward-looking statements, and we make no obligation to update our disclosures. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued today, as well as risks described in our most recent Form 10Q, particularly in the section titled Risk Factors. Today's call will include both GAAP and non-GAAP measures. Reconciliations between the two can be found in today's press release. Please note that when we discuss all of our expense figures, they will exclude stock-based compensation and related payroll taxes, as well as depreciation and amortization and non-recurring charges. Please refer to our filings with the SEC to understand how we calculate any of the metrics discussed on today's call. With that, I'd like to turn the call over to Evan.

Thank you all so much for joining us. The first quarter of 2022 proved more challenging than we had expected, and our team was able to make significant progress against our goals despite the increased volatility in the operating environment. Our community grew 18% year over year to 332 million daily active users, and revenue grew 38% year over year to 1.06 billion. This resulted in adjusted EBITDA of 64 million and free cash flow of 106 million marking our third quarter of positive free cash flow. While we are pleased with our progress given the macroeconomic environment, we also recognize that we have a significant amount of work to do to realize our long-term opportunity, and we believe we are well positioned to invest through the turbulence. A great deal of our focus has been supporting our team members located in Ukraine and helping our Ukrainian colleagues. The war in Ukraine is heartbreaking for all of us, especially because Ukraine is the birthplace of luxury, the company that laid the foundation for Snap's augmented reality platform. As we look forward to our Snap Partner Summit on April 28th, where we will celebrate our partners and launch new products, our thoughts and prayers are with our Ukrainian team members and their families, not only because of these horrible circumstances, but because they have made so many of our innovations possible. We have remained focused on expanding our product offering and deepening engagement with our global community, which grew by 13 million daily active users in the quarter. The future of our business depends on the engagement of our community, and we are pleased to see elevated growth rates in the rest of world region, where we added 10 million daily active users in the quarter. This rest of world growth follows our investments in building out the team and operations necessary to accelerate our growth in geographies where our community has demonstrated a clear product market fit with Snapchat, as well as our efforts to localize our product offering and improve application performance across a wide range of devices. Our community in North America and Europe continued to grow, and these geographies represent our largest monetization opportunities in the near and medium term. We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate. What began as an application for visual communication has evolved into a leading augmented reality platform where creators are building unique and innovative AR experiences in Lens Studio and distributing them on Snapchat and in their own applications using camera kits. Over 250 million Snapchatters engage with augmented reality every day on average across a variety of use cases, including entertainment, fashion, and education. Over 250,000 creators have built more than 2.5 million lenses, and Snapchatters played with lenses created by our community more than twice as much this quarter when compared to Q1 2021. We recently launched our ASL Alphabet lens, a first-of-its-kind AR experience that inspires Snapchatters to learn American Sign Language through the Snapchat camera. The ASL Alphabet lens uses advanced hand tracking to recognize hand poses and gestures, providing feedback as people practice communicating with sign language. We also launched custom landmarkers in Lens Studio, helping creators to build location-based lenses for local places they care about. from statues to storefronts to tell richer stories about their communities through AR. In partnership with Tukwini Mandela and Black Cultural Archives, we released our Hidden Black Stories Local Lens, transforming London's Trafalgar Square into an AR experience that showcases key moments, figures, and stories from Black British history. In an effort to educate our community on the power of AR, we announced a new augmented reality creator program in India powered by Lens Studio. The program will include an online developer course and a series of challenges that aim to empower developers and local creators across the country. In celebration of International Women's Day, we launched an AR Lensathon consisting of three workshops across Southeast Asia to encourage the participation of young women in new digital fields like augmented reality. We believe that augmented reality belongs everywhere, not just on Snapchat. We built Camera Kit to enable our partners to leverage our augmented reality platform in their own websites and applications. Through Camera Kit, we can help grow the ecosystem of AR developers and help businesses understand the immense potential of AR. We are excited by the growing demand from businesses who want to bring Snap's AR capabilities into their own apps and websites. For example, Zoog, a storytelling app for families, integrated Camera Kit to help people bond by sharing stories while using lenses to resemble storybook characters. We continue to make meaningful progress overlaying computing on the world through spectacles, our augmented reality glasses. Hundreds of creators are developing AR lenses for spectacles, building new immersive and interactive experiences, like reimagining a restaurant menu in three dimensions or enhancing a workout routine. We have continued to make software improvements and offer new capabilities for developers, including a new voice ML template in Lens Studio, which enables creators to build voice-enabled experiences without scripting, and Lens Studio Streaming Mode, which helps creators develop lenses with hand tracking from a first-person perspective. With our powerful developer tools in Lens Studio and distribution through Snapchat, Camera Kit, and Spectacles, we've created a compelling platform for creators to build and share augmented reality experiences, reaching hundreds of millions of people and exploring the next generation of computing. We continue to provide value for our growing community through our diverse content offerings, which include our two content platforms, Stories and Spotlight. Our Stories platform enables Snapchatters to share snaps with their friends in narrative form via friend stories, and watch content from professional publishers and influencers in Discover. Spotlight is our newest content platform for showcasing the most entertaining snaps created by our community. In Q1, overall time spent watching content globally grew on a year-over-year basis, driven primarily by growth in time spent with content in Discover and Spotlight. We continue to see growth in viewership of content on Discover, which has become a destination for credible and entertaining content for our community. For example, total daily time spent by Snapchatters 25 and older engaging with shows and publisher content on Discover increased by more than 25% year over year. We expanded our international content offerings by partnering with News UK, TF1 and Le Monde in France, and NBC and Al Arabiya in the Middle East. Snap originals represent another important element of our strategy to improve the diversity of available content on Discover. Over 10 million viewers have watched Breakwater, our new Snap original about the dystopian future caused by climate change that featured episodic AR lenses in partnership with Verizon, helping Snapchatters to immerse themselves in the show. Our content partners continue to find success on our platform, with six Discover partners reaching over 100 million global viewers in Q1. We are also investing in new tools and capabilities to better serve our content partners and to help them reach new audiences on Snapchat. We recently announced Dynamic Stories, a new Discover format that allows publishers to automatically create stories based on news they publish online to help Snapchatters learn about the world as it happens. Early partners include GQ, Vogue, CNN, ESPN, and The Wall Street Journal. We are very excited about the long-term potential of Spotlight. While still early in its growth and evolution, we're pleased with the engagement we're seeing, with total time spent growing 230% year over year. Over the last several months, we have focused on building the tools and infrastructure to help creators of all kinds thrive on Spotlight. And we observed a 3.5X increase in the number of Spotlight submissions using our AR lenses or creative tools compared with Q1 2021. Spotlight offers opportunities for creators to improve discoverability and get more reach with their snaps. We continue to focus on the relationship between stories and Spotlight, where creators can use Spotlight to start building an audience and deepen their relationship with that audience through their stories. Today, there are many different ways for creators to grow an audience and build a business on Snapchat. Creators can open shops to sell merchandise, join our creator marketplace, receive virtual gifts from fans, and monetize their content via our recently announced mid-roll ads and stories. We continue to innovate on our map to bring utility and value to our community and partners. As Snapchatters are able to move about the world again, we are seeing upticks in engagement on the map. While still very early, we are encouraged to see that Snapchatters open places from the map more than twice as often this quarter when compared to Q1 2021. We also added a new way to help Snapchatters discover live events with the launch of our Ticketmaster layer. Snapchatters can now browse Ticketmaster's upcoming events on the map based on what is happening nearby. We see incredible potential for innovation across our communications platform, which brings enormous value to our community by connecting people with their close friends and family. In addition to adding several new chat features, including chat replies, emoji reactions, and poll stickers, it's also where our community can launch games and minis, two platforms built to reimagine shared experiences with friends. We were pleased to see returning gaming partners, Funday Factory and Vudu, launch new game titles in Q1. Our gaming partners are finding success growing their businesses, with more than one-third of our current gaming partners having made over $1 million in revenue. Minis represent a new platform for social experiences. We've seen recent momentum with Givingly's second mini, Send Gifts, where Snapchatters can send gift cards to friends. Discover partner Wave Sports and Entertainment launched the Gym Heroes Mini, a social fitness experience on Snapchat that offers original daily fitness challenges and full workouts curated by fitness experts. The mini is designed for Snapchatters to challenge their friends and collaborating groups toward their workout goals. We're so excited about the growth of our community and the evolution of our service, and we can't wait to share more at our Snap Partner Summit next week on April 28th. We will meet the challenges of the current operating environment by prioritizing the needs of our community and partners who are essential to our success, and we will continue to invest against our enormous opportunity in augmented reality as we work to accelerate our roadmap and deliver against our long-term plans for computing overlaid on the world. I'll now turn it over to Jeremy to discuss more about our business.