Snap Inc.

Good afternoon, everyone, and welcome to SNAP Inc's Third Quarter 2023 Earnings Conference Call. At this time, participants are in a listen-only mode. I would now like to turn the call over to David Ometer, Head of Investor Relations.

Thank you, and good afternoon, everyone. Welcome to SNAP's Third Quarter 2023 Earnings Conference Call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder and Derek Anderson, Chief Financial Officer. Please refer to our investor relations website at investor.snap.com to find today's press release, slides, investor letter, and investor presentation. 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 these forward-looking statements, please refer to the press release we issued today, as well as risks described in our most recent Form 10-Q, 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.

Hi, everyone, and thank you all for joining us. Our revenue returned to positive growth in Q3, increasing 5% year-over-year and flowing through to positive adjusted EBITDA as our reprioritized cost structure demonstrated the leverage in our business model. We are focused on improving our advertising platform to drive higher return on investment for our advertising partners, and we have evolved our go-to-market efforts to better serve our partners and drive customer success. We also made progress toward diversifying our revenue, with Snapchat Plus reaching more than 5 million subscribers in the quarter, resulting in Snapchat Plus revenue growing more than 250% year over year. Our focus on visual communication between friends and family is a strategic advantage that has enabled us to build engaging and retentive products and services across our platform. Our community grew to 406 million daily active users in Q3, and we are working to further deepen content engagement by focusing on three key areas. investing in our ML models to improve content ranking and personalization across all of our content services, growing our creator community and diversity of content by supporting and rewarding creators, and using content to start conversations and build relationships across our service. We continue to leverage AI technology to deliver new products and features to our community. Since launching MyAI, more than 200 million people have sent more than 20 billion messages, which we believe makes MyAI one of the most used AI chatbots available today. More than 250 million Snapchatters engage with AR experiences on our platform every day on average. On November 9th, we will be live streaming our sixth annual LensVest. We're thrilled to have the opportunity to bring together the vibrant Snap AR community of developers and creators that are collaborating with us to push boundaries, redefine what's possible with augmented reality, and build businesses along the way. Given the progress we have made with our ad platform, the leadership team we have built, the work we have done to reprioritize our cost structure, and the strength of our balance sheet, we believe we are well-positioned to continue making progress on our top strategic priorities. As we move forward into Q4 and 2024, we remain focused on investing in our platform to sustain community growth, investing heavily in our direct response business to deliver measurable return on ad spend, and cultivating new sources of revenue to diversify our top-line growth to build a more resilient business. I want to thank Jerry Hunter, our Chief Operating Officer, for seven years of service at Snap. Jerry has notified us of his intent to retire and will be transitioning his responsibilities by the end of the month. I am deeply grateful to Jerry for the meaningful contributions he has made over his many years at Snap. His work to improve our advertising platform, serve our community, and build a strong team has helped to lay the foundation for our future growth. Thank you, and with that, we will begin our Q&A session.