Snap, the parent company of Snapchat, filed Thursday for a $3 billion initial public offering, positioning itself to be the third-largest technology debut in history, according to the financial services platform Dealogic. It intends to list itself on the New York Stock Exchange under the ticker “SNAP.”
Snap in line to be the 3rd largest IPO by a US tech company on record $SNAP pic.twitter.com/Tyg6HXon7u
— Dealogic (@Dealogic) February 2, 2017
While Snap didn’t offer a full picture of its offering in its initial filing — including how it will price its shares — the document does offer a lot of insight into how the company views itself — and how we should be thinking about it in the future. Below, we’ve pulled together some key tidbits from the filing.
Snap sees itself as a camera company: No, really. It’s right there in the company’s mission statement:
Snap Inc. is a camera company.
We believe that reinventing the camera represents our greatest opportunity to improve the way that people live and communicate. Our products empower people to express themselves, live in the moment, learn about the world, and have fun together.
Cameras, of course, haven’t exactly been a growth business in the age of the smartphone. Snap acknowledges that. “In the way that the flashing cursor became the starting point for most products on desktop computers, we believe that the camera screen will be the starting point for most products on smartphones,” the company said in its filing. “This is because images created by smartphone cameras contain more context and richer information than other forms of input like text entered on a keyboard.” The company said that it plans to create more camera products to “improve our life experiences.”
That may explain why the company is willing to branch out beyond its app and into products like Spectacles, the camera glasses that it’s selling in pop-up stores around the country.
This is how many people are using it: Snap reported in its filing that Snapchat had “158 million Daily Active Users on average in the quarter ended December 31, 2016.” Daily active users, Snap said, are the metric that it looks at the most to judge the health of its company. Its users send more than 2.5 billion snaps a day, the company said.
This is how much it makes off each user: On average, Snap makes $1.05 off each user per quarter. That’s a far cry from the $4.83 that Facebook reported in its most recent earnings report. Still, Snapchat is just five years old and is managing to grow that all-important figure each quarter.
In the United States, the figures are higher, at $2.15 per quarter.
Yes, it’s losing money — and warns that it may never turn a profit: Snap said that it is still not making any money and that its losses are growing. The company posted a net loss of $372.8 million in 2015 and a net loss of $514.6 million in 2016.
The company warns that it “may never achieve or maintain profitability” — language that has appeared in IPO filings of other tech companies, including Twitter and Etsy.
That itself, though, isn’t necessarily a sign that Snap isn’t worth the investment. While it’s not making money yet, it is growing its revenue, which is something that…