The platform claims 414 million daily active users by the end of 2023, 10% more than last year. Difficult to verify, these calculations are, of course, open to question. What is less doubtful is the stagnation in sales and operating loss, which remains perfectly unchanged compared to 2022.
Is Snapchat a company run in the interests of its shareholders or its employees? Since its IPO in early 2017, the latter have distributed over $8 billion in stock options to themselves, while the former saw their capital halved. This, against a Nasdaq that tripled over the period.
The underperformance is therefore glaring. Over the last five years, Snapchat has accumulated losses of $5.2 billion. Once again, this is more or less what employees have paid out in stock options. We're surprised that the company hasn't been targeted more by activist funds, who are quick to take action on far less scandalous issues.
Even if we were to stop at cash flow without taking these so-called "non-cash" remunerations into account - an audacious restatement given that stock options represent more than a quarter of sales - free cash flow per share remains at zero.
In the longer term, although Snapchat's sales will triple in five years, thanks in part to the advertising model overhaul due to start in 2021, the operating loss remains quite substantial: $1.2 billion in 2018, compared with $1.4 billion in 2023.
Not content with just losing money, the company's net debt has quadrupled in five years. Last year, it took on an additional $1.5 billion in debt to buy back $1 billion of its own shares.
In practice, this operation was designed to limit shareholder dilution rather than return capital. It would therefore make sense to designate it as an operating expense.