What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-05 compared with 2024-02-07 · 299 added, 228 removed, 837 unchanged (39% of the section changed)

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Financial Statements:

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Losses (gains) on debt and equity securities, net 8,460 33,027 36,838

Induced conversion expense related to convertible notes — — 41,538

Other ( 14,153 ) ( 26,958 ) 15,596

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Purchase of capped calls ( 68,850 ) — ( 177,000 )

Proceeds from termination of capped calls 62,683 — —

Proceeds from the exercise of stock options 12,798 1,038 4,272

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Deferred payments for acquisitions ( 3,695 ) ( 270,433 ) —

Repurchases of convertible notes ( 859,042 ) — —

Other ( 1,799 ) — —

Net cash provided by (used in) financing activities ( 428,624 ) ( 458,789 ) 306,714

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Accrued expenses and other current liabilities 1,009,254 805,836

Total current liabilities 1,134,118 1,215,599

Convertible senior notes, net 36,212 —

Total current liabilities 1,243,548 1,134,118

Long-term convertible senior notes, net 3,607,717 3,749,400

Operating lease liabilities, noncurrent 575,082 546,279

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Issuance of Class A non-voting common stock for vesting of restricted stock units and restricted stock awards, net 70,167 — 86,557 1 58,342 —

Issuance of Class A non-voting common stock for the induced conversion related to convertible senior notes — — — — 52,410 1

Conversion of Class B voting common stock to Class A non-voting common stock 10 — 566 — 298 —

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Balance, beginning of period 231,627 2 231,627 2 231,627 2

Issuance of Class C voting common stock for settlement of restricted stock units, net — — — — — —

Balance, end of period 231,627 2 231,627 2 231,627 2

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Shares issued in connection with exercise of stock options under stock-based compensation plans — 12,798 — 1,038 — 4,285

Cumulative-effect adjustment from accounting changes — — — — — ( 664,021 )

Issuance of Class A non-voting common stock in connection with acquisitions and divestitures — — — — — 44,039

Issuance of Class A non-voting common stock for the induced conversion related to convertible senior notes — — — — — 1,175,191

Purchase of capped calls — ( 68,850 ) — — — ( 177,000 )

Termination of capped calls — 62,683 — — — —

Reissuances of Class A non-voting common stock for vesting of restricted stock units — ( 19,283 ) — ( 20,611 ) — —

Other — 2,357 — — — —

Balance, end of period — 15,644,132 — 14,613,404 — 13,309,828

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Balance, beginning of period — ( 11,726,536 ) — ( 10,214,657 ) — ( 8,284,466 )

Cumulative-effect adjustment from accounting changes — — — — — 95,031

Net loss — ( 697,856 ) — ( 1,322,485 ) — ( 1,429,653 )

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Notes to Consolidated Financial Statements

Summary of Significant Accounting Policies

Description of Business and Summary of Significant Accounting Policies

is a technology company.

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We also maintain investments in U.S.

government debt and agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper that carry high credit ratings and accordingly, minimal credit risk exists with respect to these balances.

government debt and agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, money market funds, and commercial paper that carry high credit ratings and accordingly, minimal credit risk exists with respect to these balances.

We extend credit to our customers based on an evaluation of their ability to pay amounts due under contractual arrangement and generally do not obtain or require collateral.

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Cost of Revenue

Cost of revenue includes payments for content, developer, and advertiser partner costs.

Under some of these arrangements, we pay a portion of the fees we receive from the advertisers for Snap Ads that are displayed within partner content on Snapchat.

Partner arrangement costs were $ 675.0 million, $ 681.9 million, and $ 679.0 million for the years ended December 31, 2023, 2022, and 2021, respectively.

In addition, cost of revenue consists of payments to third-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth costs.

Cost of revenue also includes third-party selling costs, personnel-related costs, facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs.

Advertising costs are expensed as incurred and were $ 24.9 million, $ 42.7 million, and $ 62.4 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Cost of revenue includes payments for infrastructure, content and developer partner costs, and advertiser partner and other costs.

Infrastructure costs primarily consist of payments to th ird-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth.

Content and developer partner costs primarily consist of fees paid to our content creators and publisher partners who share content on our platform through revenue sharing arrangements.

Under these arrangements, we pay a portion of the fees we receive from advertisers for Snap Ads that are displayed within partner content on Snapchat.

Advertising partner and other costs primarily consist of payments to third-party partners for fulfillment services, credit card and other transaction processing fees, and other expenses directly related to providing our services.

Cost of revenue includes personnel-related costs, including salaries, benefits, and stock-based compensation expense for our employees engaged in the delivery of our services.

Cost of revenue also includes facilities and other supporting overhead costs, including depreciation and amortization, and inventory costs.

Advertising costs are expensed as incurred and recorded within sales and marketing expenses in our consolidated statements of operations.

For the years ended December 31, 2024, 2023, and 2022, advertising costs were $ 57.7 million, $ 24.9 million, and $ 42.7 million, respectively.

Capital Structure

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In connection with the Future Stock Split, we entered into certain agreements (the “Co-Founder Agreements”) with Evan Spiegel and Robert Murphy, our co-founders, and certain of their respective affiliates requiring them, among other things, to convert shares of Class B common stock and Class C common stock into Class A common stock under certain circumstances.

The Future Stock Split will not be declared and paid until the first business day following the date on which the average of the volume weighted average price (the “VWAP”) per share of Class A common stock equals or exceeds $ 40 per share for 65 consecutive trading days.

In May 2024, the conditions for the declaration of such dividends were modified and the Co-Founder Agreements were amended to reflect such modifications.

As modified, the Future Stock Split will not be declared and paid until the first business day following the date on which (i) the average of the volume weighted average price (the “VWAP”) per share of Class A common stock equals or exceeds $ 40 per share for 90 consecutive trading days (the “90-Day VWAP”) and (ii) the ratio of the 90-Day VWAP to $ 8.70 equals or exceeds the ratio of the average closing price of the S&P 500 Total Return index for the same 90 trading days for which the 90-Day VWAP was calculated to 8,862.85 .

If this does not occur by July 21, 2032, the Future Stock Split will not be declared and paid, and the Co-Founder Agreements will terminate.

In June 2023, in connection with a proposed settlement of a class-action lawsuit, and as amended in December 2023, we agreed to modify the conditions for the Future Stock Split, subject to various conditions, including judicial approval of the settlement.

If approved, the Future Stock Split will not be declared and paid until the first business day following the date on which (i) the VWAP per share of Class A common stock equals or exceeds $ 40 per share for 90 consecutive trading days (the “90-Day VWAP”) and (ii) the ratio of the 90-Day VWAP to $ 8.70 equals or exceeds the ratio of the average closing price of the S&P 500 Total Return index for the same 90 trading days for which the 90-Day VWAP was calculated to 8,862.85 .

The original ten year time period to trigger the Future Stock Split would remain unchanged.

No adjustments have been made to share or per share amounts for Class A common stock in the accompanying consolidated financial statements for the effects of the Future Stock Split as these triggering conditions have not been met.

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A modification of the terms of a stock-based award is treated as an exchange of the original award for a new award with total compensation cost equal to the grant-date fair value of the original award plus the incremental value of the modification to the award.

The future tax benefits on settlement of the above RSUs and RSAs is not expected to be material as currently we have established valuation allowances to reduce our net deferred tax assets to the amount that is more likely than not to be realized.

The majority of the future tax benefits that arise on settlement of the above RSUs are in jurisdictions for which our net deferred tax assets have a full valuation allowance.

The total recognized tax benefit related to stock-based compensation expense for all periods presented was immaterial as we have established valuation allowances to reduce our net deferred tax assets to the amount that is more likely than not to be realized.

The majority of the future tax benefits that arise on settlement of RSUs, RSAs and stock options are in jurisdictions for which our net deferred tax assets have a full valuation allowance.

We are subject to income taxes in the United States and numerous foreign jurisdictions.

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Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with original maturities of 90 days or less from the date of purchase.

Cash and cash equivalents consist of highly liquid investments with maturities of 90 days or less from the date of purchase.

Restricted Cash

We are required to maintain restricted cash deposits to back letters of credit for certain property leases.

These funds are restricted and have been classified in other assets on our consolidated balance sheets due to the nature of restriction.

At December 31, 2023 and 2022, restricted cash balances were immaterial.

Restricted cash primarily includes cash and cash equivalents that are legally restricted as to withdrawal or use in our operations.

Restricted cash balances are included in other assets on our consolidated balance sheets.

Marketable Securities

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government securities, U.S.

government agency securities, publicly traded equity securities, corporate debt securities, certificates of deposit, and commercial paper.

We classify marketable investments in debt securities as available-for-sale investments in our current assets because they represent investments available for current operations.

Our available-for-sale investments in debt securities are carried at fair value with any unrealized gains and losses, included in accumulated other comprehensive (loss) income in stockholders’ equity.

government agency securities, corporate debt securities, certificates of deposit, commercial paper, and publicly traded equity securities.

classify marketable investments in debt securities as available-for-sale investments in our current assets because they represent investments available for current operations.

Our available-for-sale investments in debt securities are carried at fair value with any unrealized gains and losses included in accumulated other comprehensive income (loss) in stockholders’ equity.

Available-for-sale debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses, with any allowance for credit losses recognized as a charge in other income (expense), net on our consolidated statements of income.

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To determine the amount of the allowance, we make judgments about the creditworthiness of customers based on ongoing credit evaluation and historical experience.

At December 31, 2023 and 2022, the allowance for doubtful accounts was immaterial.

As of December 31, 2024 and 2023, the allowance for doubtful accounts was immaterial.

Property and Equipment

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Maintenance and repairs are expensed as incurred.

We have non-cancelable lease agreements for primarily offices that are recorded as operating lease right-of-use assets and operating lease liabilities in our consolidated balance sheets.

We account for lease and non-lease components as a single lease component and do not record leases with an initial term of twelve months or less in our consolidated balance

We have non-cancelable lease agreements, primarily for offices, that are recorded as operating lease right-of-use assets and operating lease liabilities in our consolidated balance sheets.

We account for lease and non-lease components as a single lease component and do not record leases with an initial term of twelve months or less in our consolidated balance sheets.

We use our incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments over the lease term .

Our lease terms may include options to extend or terminate the lease when it is reasonably certain we will exercise that option.

Our lease terms may include options to extend or

terminate the lease when it is reasonably certain we will exercise that option.

Certain agreements have free rent periods or escalating rent payment provisions.

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Our CEO is our chief operating decision maker (“CODM ” ).

We have determined that we have a single operating segment.

Our CEO evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis accompanied by disaggregated information about revenue by geographic region.

Our CEO evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis, accompanied by information about revenue disaggregated by geographic region.

Because our CODM evaluates financial performance on a consolidated basis, we have determined that we have a single reportable segment composed of the consolidated financial results of Snap Inc.

Business Combinations

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Impairment of Long-Lived Assets

We evaluate recoverability of our property and equipment and intangible assets, excluding goodwill, when events or changes indicate the carrying amount of an asset may not be recoverable.

Events and changes in circumstances considered in determining whether the carrying value of long-lived assets may not be recoverable include:

significant changes in performance relative to expected operating results;

significant changes in asset use;

and significant negative industry or economic trends and changes in our business strategy.

We evaluate recoverability of our property and equipment, operating lease right-of-use assets, and intangible assets, excluding goodwill, when events or changes indicate the carrying amount of an asset may not be recoverable.

Events and changes in circumstances considered in determining whether the carrying value of long-lived assets may not be recoverable include significant changes in performance relative to expected operating results, significant changes in asset use, and significant negative industry or economic trends and changes in our business strategy.

Recoverability of these assets is measured by comparison of their carrying amount to future undiscounted cash flows to be generated.

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Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The guidance is effective for annual reporting periods, and interim reporting periods within those annual reporting periods, beginning after December 15, 2025.

The guidance is applied on a prospective basis, with a retrospective option, and early adoption is permitted.

We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires public entities to provide a disclosure within the financial statement footnotes showing the disaggregation of certain expenses included in relevant expense captions on the consolidated income statement, with a qualitative description of the amounts that are not separately disaggregated quantitatively.

The guidance also requires disclosure of the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027.

The guidance is applied on a prospective basis, with a retrospective option, and early adoption is permitted.

We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires public entities to provide greater disaggregation within their annual rate reconciliation, including new requirements to present reconciling items on a gross basis in specified categories, disclose both percentages and dollar amounts, and disaggregate individual reconciling items by jurisdiction and nature when the effect of the items meet a quantitative threshold.

The guidance also requires disaggregating the annual disclosure of income taxes paid, net of refunds received, by federal (national), state, and foreign taxes, with separate presentation of individual jurisdictions that meet a quantitative threshold.

meet a quantitative threshold.

The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis, with a retrospective option, and early adoption is permitted.

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The guidance is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted.

We are currently evaluating the impact of adoption of this standard on our consolidated financial statements and disclosures.

Effective January 1, 2024, we adopted ASU 2023-07.

Refer to Note 19 of these consolidated financial statements.

We determine revenue recognition by first identifying the contract or contracts with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when, or as, we satisfy a performance obligation.

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We also generate revenue from subscriptions and sales of hardware products.

Sales of hardware products are reported net of allowances for returns.

For the periods presented, all such revenue was not material.

The following table represents our revenue disaggregated by geography based on the billing address of the customer:

The following table represents our revenue disaggregated by geographic region based on the billing address of the customer:

Year Ended December 31,

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Diluted $ ( 0.42 ) $ ( 0.42 ) $ ( 0.42 ) $ ( 0.82 ) $ ( 0.82 ) $ ( 0.82 ) $ ( 0.89 ) $ ( 0.89 ) $ ( 0.89 )

The following potentially dilutive shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:

Year Ended December 31,

The following potentially dilutive shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive:

As of December 31,

2024 2023 2022

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Stock-based Compensation Plans

We maintain three share-based employee compensation plans:

the 2017 Equity Incentive Plan (“2017 Plan”), the 2014 Equity Incentive Plan (“2014 Plan”), and the 2012 Equity Incentive Plan (“2012 Plan,” and collectively with the 2017 Plan and the 2014 Plan, the “Stock Plans”).

In January 2017, our board of directors adopted the 2017 Plan, and in February 2017 our stockholders approved the 2017 Plan, effective on March 1, 2017, which serves as the successor to the 2014 Plan and 2012 Plan and provides for the grant of incentive stock options to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, stock appreciation rights, RSAs, RSUs, performance stock awards, performance cash awards, and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our affiliates.

We do not expect to grant any additional awards under the 2014 Plan or 2012 Plan as of the effective date of the 2017 Plan, other than awards for up to 2,500,000 shares of Class A common stock to our employees and consultants in France under the 2014 Plan.

Outstanding awards under the 2014 Plan and 2012 Plan continue to be subject to the terms and conditions of the 2014 Plan and 2012 Plan, respectively.

Shares available for grant under the 2014 Plan and 2012 Plan, which were reserved but not issued or subject to outstanding awards under the 2014 Plan or 2012 Plan, respectively, as of the effective date of the 2017 Plan, were added to the reserves of the 2017 Plan.

We initially reserved 87,270,108 shares of our Class A common stock for future issuance under the 2017 Plan.

An additional number of shares of Class A common stock will be added to the 2017 Plan equal to (i) 96,993,064 shares of Class A common stock reserved for future issuance pursuant to outstanding stock options and unvested RSUs under the 2014 Plan, (ii) 37,228,865 shares of Class A common stock issuable on conversion of Class B common stock underlying stock options and unvested RSUs outstanding under the 2012 Plan, (iii) 17,858,235 shares of Class A common stock that were reserved for issuance under the 2014 Plan as of the date the 2017 Plan became effective, (iv) 11,004,580 shares of Class A common stock issuable on conversion of Class B common stock that were reserved for issuance under the 2012 Plan as of the date the 2017 Plan became effective, and (v) a maximum of 86,737,997 shares of Class A common stock that will be added pursuant to the following sentence.

With respect to each share that returns to the 2017 Plan pursuant to (i) and (ii) of the prior sentence that was associated with an award that was outstanding under the 2014 Plan and 2012 Plan as of October 31, 2016, an additional share of Class A common stock will be added to the share reserve of the 2017 Plan, up to a maximum of 86,737,997 shares .

The number of shares reserved for issuance under the 2017 Plan will increase automatically on January 1st of each calendar year, beginning on January 1, 2018 through January 1, 2027, by the lesser of (i) 5.0 % of the total number of shares of our capital stock outstanding on December 31st of the immediately preceding calendar year, and (ii) a number determined by our board of directors.

We maintain one active share-based employee compensation plan, the 2017 Equity Incentive Plan (the “2017 Plan”).

In January 2017, our board of directors adopted the 2017 Plan, and in February 2017, our stockholders approved the 2017 Plan, effective on March 1, 2017.

The 2017 Plan provides for the grant of incentive stock options to employees,

including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, stock appreciation rights, RSAs, RSUs, performance stock awards, performance cash awards, and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our affiliates.

The maximum term for stock options granted under the 2017 Plan may not exceed ten years from the date of grant.

The 2017 Plan will terminate ten years from the date our board of directors approved the plan, unless it is terminated earlier by our board of directors.

As of December 31, 2024, there were 152,488,503 shares of our Class A common stock reserved for future issuance under the 2017 Plan.

2017 Employee Stock Purchase Plan

In January 2017, our board of directors adopted the 2017 Employee Stock Purchase Plan (“2017 ESPP”).

In January 2017, our board of directors adopted the 2017 Employee Stock Purchase Plan (the “2017 ESPP”).

Our stockholders approved the 2017 ESPP in February 2017.

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A total of 16,484,690 shares of Class A common stock were initially reserved for issuance under the 2017 ESPP.

our Class A common stock have been issued or offered under the 2017 ESPP.

No shares of our Class A common stock have been issued or offered under the 2017 ESPP.

The number of shares of our Class A common stock reserved for issuance will automatically increase on January 1st of each calendar year, beginning on January 1, 2018 through January 1, 2027, by the lesser of (i) 1.0 % of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of the automatic increase, and (ii) 15,000,000 shares;

provided that before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii).

As of December 31, 2024, there were 16,484,690 shares of our Class A common stock reserved for future issuance under the 2017 ESPP.

Restricted Stock Units and Restricted Stock Awards

The following table summarizes the RSU and RSA activity during the year ended December 31, 2023:

Number of Shares Weighted-

The following table summarizes the RSU and RSA activity for the year ended December 31, 2024:

Class A Shares Weighted-

(in thousands, except per share data)

Unvested at December 31, 2022 132,392 $ 18.28

Unvested as of December 31, 2023 157,130 $ 12.82

Granted 89,187 $ 12.92

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Forfeited ( 38,959 ) $ 12.34

Unvested at December 31, 2023 157,130 $ 12.82

Unvested as of December 31, 2024 134,253 $ 11.90

The weighted-average grant date fair value of RSUs and RSAs granted for the years ended December 31, 2024, 2023 and 2022 was $ 12.92 , $ 10.41 , and $ 15.17 , respectively.

The total fair value of RSUs and RSAs vested for the years ended December 31, 2024, 2023, and 2022 was $ 0.9 billion, $ 1.0 billion, and $ 1.2 billion, respectively.

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Stock Options

The following table summarizes the stock option award activity under the Stock Plans during the year ended December 31, 2023:

of Shares Class B

of Shares Weighted-

The following table summarizes the stock option award activity under the 2017 Plan for the year ended December 31, 2024:

Class A Shares Number of

Class B Shares Weighted-

Price Weighted-

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(in thousands, except per share data)

Outstanding at December 31, 2022 2,589 570 $ 9.68 4.05 $ 9,669

Outstanding as of December 31, 2023 1,692 5 $ 14.90 4.41 $ 5,225

Granted — — $ —

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Forfeited ( 128 ) — $ 12.58

Outstanding at December 31, 2023 1,692 5 $ 14.90 4.41 $ 5,225

Exercisable at December 31, 2023 1,692 5 $ 14.90 4.41 $ 5,225

Vested and expected to vest at December 31, 2023 1,692 5 $ 14.90 4.41 $ 5,225

(1) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the closing market price of our Class A common stock as of December 31, 2023 and December 31, 2022, respectively.

The weighted-average fair value of stock options granted during the year ended December 31, 2022 and 2021 was $ 8.41 and $ 36.17 per share.

The expense is estimated based on the option’s fair value as calculated by the Black-Scholes option pricing model.

Outstanding as of December 31, 2024 680 — $ 16.01 4.51 $ 253

Exercisable as of December 31, 2024 680 — $ 16.01 4.51 $ 253

Vested and expected to vest as of December 31, 2024 680 — $ 16.01 4.51 $ 253

There were no stock options granted for the years ended December 31, 2024 and 2023.

The weighted-average grant date fair value of stock options granted for the year ended December 31, 2022 was $ 8.41 per share as calculated by the Black-Scholes option pricing model.

Stock-based compensation expense for stock options was not material for the years ended December 31, 2024, 2023, and 2022.

As of December 31, 2023, there was no unrecognized compensation cost related to stock options granted under the Stock Plans.

The total grant date fair value of stock options that vested for the years ended December 31, 2023, 2022, and 2021 was $ 1.1 million, $ 3.2 million, and $ 7.7 million, respectively.

As of December 31, 2024, there was no unrecognized compensation cost related to stock options granted under the 2017 Stock Plan.

There were no stock options that vested for the year ended December 31, 2024.

The total grant date fair value of stock options that vested for the years ended December 31, 2023 and 2022 was $ 1.1 million and $ 3.2 million, respectively.

The intrinsic value of stock options exercised for the years ended December 31, 2024, 2023, and 2022 was $ 1.4 million, $ 12.3 million, and $ 5.9 million, respectively.

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In October 2024, our board of directors authorized a stock repurchase program of up to $ 500.0 million of our Class A common stock.

During the fourth quarter of 2023, we repurchased 18.4 million shares of our Class A common stock for an aggregate of $ 189.4 million, including costs associated with the repurchases.

As of December 31, 2023, the remaining availability under the stock repurchase authorization was $ 310.8 million.

We did not repurchase any shares under this program in the fourth quarter of 2024.

Accordingly, as of December 31, 2024, the remaining availability under the stock repurchase authorization was $ 500.0 million.

In October 2023, our board of directors authorized a stock repurchase program of up to $ 500.0 million of our Class A common stock.

The program was completed in the second quarter of 2024, during which we repurchased, and subsequently retired, 46.3 million shares of our Class A common stock for an aggregate of $ 500.5 million, representing the entire amount approved by our board of directors and including costs associated with the repurchases.

In October 2022, our board of directors authorized a stock repurchase program of up to $ 500.0 million of our Class A common stock.

The program was completed in the fourth quarter of 2022, during which we repurchased, and subsequently retired, 53.9 million shares of our Class A common stock for an aggregate of $ 500.5 million, representing the entire amount approved by our board of directors and including costs associated with the repurchases.

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2023 Acquisitions

In 2023, aggregate purchase consideration for business acquisitions was $ 73.1 million, which primarily consisted of $ 56.3 million in cash and $ 12.6 million recorded in other liabilities in our consolidated balance sheet.

In 2023, the aggregate purchase consideration for business acquisitions was $ 73.1 million, which primarily consisted of $ 56.3 million in cash and $ 12.6 million recorded in other liabilities in our consolidated balance sheet.

Of the aggregate purchase consideration, $ 42.8 million was allocated to goodwill and the remainder primarily to identifiable intangible assets.

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Of the aggregate purchase consideration, $ 69.3 million was allocated to goodwill and the remainder primarily to identifiable intangible assets.

The goodwill amount represents synergies related to our existing platform expected to be realized from the business

acquisitions and assembled workforce.

Of the acquired goodwill and intangible assets, $ 101.7 million is deductible for tax purposes.

2021 Acquisitions

In May 2021, we acquired Wave Optics Limited (“Wave Optics”), a display technology company that supplies light engines and diffractive waveguides for augmented reality displays.

The total consideration was $ 541.8 million, of which $ 510.4 million represented purchase consideration and primarily consisted of 4.7 million shares of our Class A common stock with a fair value of $ 252.0 million, cash of $ 13.7 million, and a $ 238.4 million payable due no later than May 2023 in either cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election.

The remaining $ 31.4 million of total consideration transferred represented compensation for future employment services.

The allocation of the total purchase consideration for this acquisition was as follows:

(in thousands)

Trademarks $ 20,584

Technology 77,118

Customer relationships 32,708

Goodwill 370,236

Net deferred tax liability ( 3,313 )

Other assets acquired and liabilities assumed, net 13,111

Total $ 510,444

The goodwill amount represents synergies expected to be realized from the business combination and assembled workforce.

The associated goodwill and intangible assets are not deductible for tax purposes.

Fit Analytics

In March 2021, we acquired Fit Analytics GmbH (“Fit Analytics”), a sizing technology company that powers solutions for retailers and brands, to grow our e-commerce and shopping offerings.

The purchase consideration for Fit Analytics was $ 124.4 million, which primarily represented current and future cash consideration payments.

The allocation of the total purchase consideration for this acquisition was as follows:

(in thousands)

Trademarks $ 800

Technology 17,000

Customer relationships 17,000

Goodwill 88,132

Net deferred tax liability ( 5,643 )

Other assets acquired and liabilities assumed, net 7,160

Total $ 124,449

The goodwill amount represents synergies expected to be realized from this business combination and assembled workforce.

The associated goodwill and intangible assets are not deductible for tax purposes.

Other 2021 Acquisitions

For the year ended December 31, 2021, we completed other acquisitions to enhance our existing platform, technology, and workforce.

The aggregate purchase consideration was $ 266.1 million, which included $ 139.5 million in cash, $ 93.7 million in shares of our Class A common stock, and $ 32.9 million recorded in other liabilities on our consolidated balance sheets.

The aggregate allocation of purchase consideration was as follows:

(in thousands)

Technology $ 64,150

Customer relationships 4,000

Goodwill 203,482

Net deferred tax liability ( 11,871 )

Other assets acquired and liabilities assumed, net 6,325

Total $ 266,086

The goodwill amount represents synergies related to our existing platform expected to be realized from the business acquisitions and assembled workforces.

The goodwill amount represents synergies related to our existing platform expected to be realized from the business acquisitions and assembled workforce.

Of the acquired goodwill and intangible assets, $ 101.7 million is deductible for tax purposes.

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Intangible assets consisted of the following:

December 31, 2023

Useful Life -

As of December 31, 2024

(Years) Gross

Amount Accumulated

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Other — 6,000 ( 6,000 ) —

Total intangible assets

$ 354,451 $ ( 268,088 ) $ 86,363

December 31, 2022

Useful Life -

As of December 31, 2023

(Years) Gross

Amount Accumulated

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Domain names 3.0 $ 745 $ ( 546 ) $ 199

Trademarks 1.2 800 ( 478 ) 322

Technology 2.8 323,313 ( 197,608 ) 125,705

Customer relationships 5.7 21,000 ( 6,641 ) 14,359

Patents 8.8 39,373 ( 19,099 ) 20,274

Other — 6,000 ( 5,875 ) 125

Total intangible assets

$ 369,431 $ ( 223,128 ) $ 146,303

Amortization of intangible assets for the years ended December 31, 2024, 2023, and 2022 was $ 60.0 million, $ 81.1 million, and $ 132.3 million, respectively.

In 2023, we recognized $ 19.9 million in charges related to the revision of the useful lives and disposal of certain acquired intangible assets.

In 2022, we revised the useful lives of certain customer relationships, trademarks, domain names, and technology, which resulted in a $ 49.3 million increase to amortization expense for the year ended December 31, 2022.

We revised the useful lives of certain customer relationships, trademarks, domain names, and technology for the years ended December 31, 2024, 2023 and 2022, which resulted in a $ 3.2 million, $ 19.9 million, and $ 49.3 million increase to amortization expense for the respective years.

As of December 31, 2024, the estimated intangible asset amortization expense for the next five years and thereafter is as follows:

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Total $ 86,363

Long-Term Debt

Convertible Notes

In February 2022, we entered into a purchase agreement for the sale of an aggregate of $ 1.50 billion principal amount of convertible senior notes due in 2028 (the “2028 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

The net proceeds from the issuance of the 2028 Notes were $ 1.31 billion, net of debt issuance costs and cash used to purchase the capped call transactions (“2028 Capped Call Transactions”) discussed below.

In May 2024, we entered into a purchase agreement with certain counterparties for the sale of an aggregate of $ 750.0 million principal amount of convertible senior notes due in 2030 (the “2030 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”).

The 2030 Notes consisted of a $ 650.0 million initial placement and an over-allotment option that provided the initial purchasers of the 2030 Notes with the option to purchase an additional $ 100.0 million aggregate principal amount of the 2030 Notes, which was fully exercised.

The 2030 Notes were issued pursuant to an indenture dated May 13, 2024.

The net proceeds from the issuance of the 2030 Notes were $ 671.5 million, net of debt issuance costs and cash used to purchase the capped call transactions (“2030 Capped Call Transactions”) discussed below.

The debt issuance costs are amortized to interest expense using the effective interest rate method.

The 2030 Notes are unsecured and unsubordinated obligations.

Interest is payable in cash semi-annually in arrears beginning on November 1, 2024 at a rate of 0.50 % per year.

The 2030 Notes mature on May 1, 2030 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.

The 2030 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 45.0846 shares of Class A common stock per $1,000 principal amount of 2030 Notes, which is equivalent to an initial conversion price of approximately $ 22.18 per share of our Class A common stock.

The conversion rate is subject to customary adjustments for certain events as described in the indenture governing the 2030 Notes.

We may redeem for cash all or any portion of the 2030 Notes, at our option, on or after May 5, 2027 if (i) the 2030 Notes are “freely tradable” (as defined in the applicable indenture) and any accrued and unpaid additional interest has been paid as of the date we send the related redemption notice and (ii) the last reported sale price of our Class A common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days at a redemption price equal to 100 % of the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any.

Holders of the 2030 Notes may convert all or a portion of their 2030 Notes at their option prior to February 1, 2030, in multiples of $1,000 principal amounts, only under the following circumstances:

• if the last reported sale price of our Class A common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the preceding calendar quarter is greater than or equal to 130 % of the applicable conversion price of the 2030 Notes on each such trading day;

• during the five consecutive business day period after any ten consecutive trading day period in which the trading price per $1,000 principal amount of the 2030 Notes for each day of that ten consecutive trading day period was less than 98 % of the product of the last reported sale price of our Class A common stock and the applicable conversion rate of the 2030 Notes on such trading day;

• on a notice of redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, in which case we may be required to increase the conversion rate for the 2030 Notes so surrendered for conversion in connection with such redemption notice;

• on the occurrence of specified corporate events.

On or after February 1, 2030, the 2030 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

Holders of the 2030 Notes who convert the 2030 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2030 Notes, or in connection with a redemption are entitled to an increase in the conversion rate.

Additionally, in the event of a fundamental change, holders of the 2030 Notes may require us to repurchase all or a portion of the 2030 Notes at a price equal to 100 % of the principal amount of 2030 Notes, plus any accrued and unpaid interest, if any.

We accounted for the issuance of the 2030 Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.

The net proceeds from the issuance of the 2028 Notes were $ 1.31 billion, net of debt issuance costs and cash used to purchase the capped call transactions (the “2028 Capped Call Transactions”) discussed below.

The debt issuance costs are amortized to interest expense using the effective interest rate method.

The 2028 Notes are unsecured and unsubordinated obligations.

Interest is payable in cash semi-annually in arrears beginning on September 1, 2022 at a rate of 0.125 % per year.

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The 2028 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 17.7494 shares of Class A common stock per $ 1,000 principal amount of 2028 Notes, which is equivalent to an initial conversion price of approximately $ 56.34 per share of our Class A common stock.

Holders of the 2028 Notes may convert all or a portion of their 2028 Notes at their option prior to December 1, 2027, in multiples of $1,000 principal amounts, under certain circumstances as described in the indenture governing the 2028 Notes.

On or after December 1, 2027, the 2028 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

We may redeem for cash all or any portion of the 2028 Notes, at our option, on or after March 5, 2025 based on certain circumstances.

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The 2027 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 11.2042 shares of Class A common stock per $ 1,000 principal amount of 2027 Notes, which is equivalent to an initial conversion price of approximately $ 89.25 per share of our Class A common stock.

We may redeem for cash all or portions of the 2027 Notes, at our option, on or after May 5, 2024 based on certain circumstances.

In April 2020, we entered into a purchase agreement for the sale of an aggregate of $ 1.0 billion principal amount of convertible senior notes due in 2025 (the “2025 Notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act.

The net proceeds from the issuance of the 2025 Notes were $ 888.6 million, net of debt issuance costs and cash used to purchase the capped call transactions (the “2025 Capped Call Transactions”) discussed below.

The debt issuance costs are amortized to interest expense using the effective interest rate method.

The 2025 Notes are unsecured and unsubordinated obligations.

Interest is payable in cash semi-annually in arrears beginning on November 1, 2020 at a rate of 0.25 % per year.

The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.

The 2025 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 46.1233 shares of Class A common stock per $ 1,000 principal amount of 2025 Notes, which is equivalent to an initial conversion price of approximately $ 21.68 per share of our Class A common stock.

Holders of the 2027 Notes may convert all or a portion of their 2027 Notes at their option prior to February 1, 2027, in multiples of $1,000 principal amounts, under certain circumstances as described in the indenture governing the 2027 Notes.

On or after February 1, 2027, the 2027 Notes are convertible at any

time until the close of business on the second scheduled trading day immediately preceding the maturity date.

We may redeem for cash all or portions of the 2027 Notes, at our option, on or after May 5, 2024 based on certain circumstances.

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The 2026 Notes are convertible into cash, shares of our Class A common stock, or a combination of cash and shares of our Class A common stock, at our election, at an initial conversion rate of 43.8481 shares of Class A common stock per $ 1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $ 22.81 per share of our Class A common stock.

Holders of the 2026 Notes may convert all or a portion of their 2026 Notes at their option prior to May 1, 2016, in multiples of $1,000 principal amounts, under certain circumstances as described in the indenture governing the 2026 Notes.

On or after May 1, 2026, the 2026 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

We may redeem for cash all or portions of the 2026 Notes, at our option, on or after August 6, 2023 based on certain circumstances.

Exchange Transactions

In 2021, we entered into various exchange agreements (collectively, the “Exchange Agreements”) with certain holders of the 2025 Notes and the 2026 Notes pursuant to which we exchanged approximately $ 715.9 million principal amount of the 2025 Notes and approximately $ 426.5 million principal amount of the 2026 Notes for aggregate consideration of approximately 52.4 million shares of Class A common stock (the “Exchange Shares”).

The Exchange Shares included an additional 0.7 million shares of our Class A common stock not provided for under the original conversion terms of the 2025 Notes and the 2026 Notes to induce the holders to agree to the exchange.

The Exchange Agreements were accounted for as an induced conversion with the fair value of 0.7 million Exchange Shares, less accrued interest, recognized as an inducement expense in other income (expense), net in our consolidated statements of operations and included as an adjustment to reconcile net loss to net cash provided by (used in) operating activities in our consolidated statements of cash flows.

Inducement expense recorded for the year ended December 31, 2021 was $ 41.5 million.

The common stock consideration issued under the original terms of the 2025 Notes and 2026 Notes was accounted for under the general conversion accounting guidance with the net carrying amount of $ 1,132.6 million recorded in additional paid-in-capital and as a non-cash transaction excluded from cash activities on our consolidated statements of cash flows.

The debt issuance costs are amortized to interest expense using the effective interest rate method.

The 2025 Notes are unsecured and unsubordinated obligations.

Interest is payable in cash semi-annually in arrears beginning on November 1, 2020 at a rate of 0.25 % per year.

The 2025 Notes mature on May 1, 2025 unless repurchased, redeemed, or converted in accordance with their terms prior to such date.

Holders of the 2025 Notes may convert all or a portion of their 2025 Notes at their option prior to February 1, 2025, in multiples of $1,000 principal amounts, under certain circumstances as described in the indenture governing the 2025 Notes.

On or after February 1, 2025, the 2025 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

We may redeem for cash all or portions of the 2025 Notes, at our option, on or after May 6, 2023 based on certain circumstances.

Note Repurchases

In February 2024, we entered into various privately negotiated repurchase transactions with certain holders of the 2025 Notes and 2026 Notes, pursuant to which we agreed to repurchase $ 100.0 million in aggregate principal of the 2025 Notes and $ 351.2 million in aggregate principal of the 2026 Notes for a cash repurchase price of $ 440.7 million, including associated costs.

The February 2024 repurchase transactions resulted in an $ 8.8 million gain on extinguishment in the first quarter of 2024.

In May 2024, we entered into various privately negotiated repurchase transactions (collectively with the February 2024 repurchase transactions, the “Note Repurchases”) with certain holders of the 2025 Notes and 2026 Notes, pursuant to which we agreed to repurchase $ 147.9 million in aggregate principal of the 2025 Notes and approximately $ 237.5 million in aggregate principal of the 2026 Notes for a cash repurchase price of approximately $ 418.3 million, including associated costs.

The May 2024 repurchase transactions were accounted for as both a debt modification and a partial debt

extinguishment, resulting in a $ 15.5 million loss on extinguishment during the second quarter of 2024 and $ 20.9 million in capitalized debt issuance costs amortized over the term of the 2030 Notes.

The capitalized debt issuance costs are primarily related to repurchase premiums and debt issuance costs carried over from the 2025 Notes and 2026 Notes.

Gains and losses on extinguishment are included within other income (expense), net on our consolidated statements of operations and included within Other as an adjustment to reconcile net loss to net cash provided by (used in) operating activities in our consolidated statements of cash flows.

The Convertible Notes consisted of the following:

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2028 Notes 1,500,000 ( 8,982 ) 1,491,018 1,500,000 ( 11,800 ) 1,488,200

750,000 ( 27,447 ) 722,553 —

Total $ 3,685,994 $ ( 42,065 ) $ 3,643,929 $ 3,772,587 $ ( 23,187 ) $ 3,749,400

As of December 31, 2023, the debt issuance costs on the 2025 Notes, 2026 Notes, 2027 Notes, and 2028 Notes will be amortized over the remaining period of approximately 1.3 years, 2.6 years, 3.3 years and 4.2 years, respectively.

Interest expense related to the amortization of debt issuance costs was $ 6.9 million, $ 6.5 million, and $ 4.3 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Contractual interest expense was $ 8.9 million, $ 8.7 million, and $ 8.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Each of the notes in the table above rank equally with each other.

The effective interest rates for the 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes and 2030 Notes range between 0.19 % and 1.21 %.

As of December 31, 2024, the debt issuance costs on the 2025 Notes, 2026 Notes, 2027 Notes, 2028 Notes, and 2030 Notes will be amortized over the remaining period of approximately 0.3 years, 1.6 years, 2.3 years, 3.2 years, and 5.3 years, respectively.

The following table summarizes interest expense related to the Convertible Notes:

Year Ended December 31,

(in thousands)

Contractual interest expense $ 7,334 $ 8,874 $ 8,655

Amortization of debt issuance costs 8,906 6,880 6,543

Total interest expense $ 16,240 $ 15,754 $ 15,198

As of December 31, 2024, the if-converted value of the Convertible Notes did not exceed the principal amount.

The sale price for conversion was not satisfied as of December 31, 2023 for the Convertible Notes, and as a result, the Convertible Notes will not be eligible for optional conversion during the first quarter of 2024.

The sale price for conversion was not satisfied as of December 31, 2024 for the Convertible Notes, and as a result, the Convertible Notes will not be eligible for optional conversion during the first quarter of 2025, other than the 2025 Notes, which are eligible for optional conversion on or after February 1, 2025.

No sinking fund is provided for the Convertible Notes, which means that we are not required to redeem or retire them periodically.

Capped Call Transactions

In connection with the pricing of the 2025 Notes, the 2026 Notes, the 2027 Notes, and the 2028 Notes, we entered into the 2025 Capped Call Transactions, the 2026 Capped Call Transactions, the 2027 Capped Call Transactions, and the 2028 Capped Call Transactions (collectively, the “Capped Call Transactions”), respectively, with certain counterparties at a net cost of $ 100.0 million, $ 102.1 million, $ 86.8 million, and $ 177.0 million, respectively.

The cap price of the 2025 Capped Call Transactions, the 2026 Capped Call Transactions, the 2027 Capped Call Transactions, and the 2028 Capped Call Transactions is initially $ 32.12 , $ 32.58 , $ 121.02 , and $ 93.90 per share of our Class A common stock, respectively.

In connection with the pricing of the 2025 Notes, the 2026 Notes, the 2027 Notes, the 2028 Notes, and the 2030 Notes, we entered into the 2025 Capped Call Transactions, the 2026 Capped Call Transactions, the 2027 Capped Call Transactions, the 2028 Capped Call Transactions, and the 2030 Capped Call Transactions (collectively, the “Capped Call Transactions”), respectively, with certain counterparties at a net cost of $ 100.0 million, $ 102.1 million, $ 86.8 million, $ 177.0 million, and $ 68.9 million respectively.

The cap price of the 2025 Capped Call Transactions, the 2026 Capped Call Transactions, the 2027 Capped Call Transactions, the 2028 Capped Call Transactions, and the 2030 Capped Call Transactions is initially $ 32.12 , $ 32.58 , $ 121.02 , $ 93.90 , and $ 33.48 per share of our Class A common stock, respectively.

All are subject to certain adjustments under the terms of the Capped Call Transactions.

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The Capped Call Transactions will not be remeasured as long as they continue to meet the conditions for equity classification.

As of December 31, 2023, the Capped Call Transactions were out-of-the-money.

In May 2024, we entered into agreements to terminate all of the 2025 Capped Call Transactions, which resulted in $ 62.7 million recorded within additional paid-in capital in our consolidated balance sheets.

As of December 31, 2024, the remaining Capped Call Transactions were out-of-the-money.

Credit Facility

In May 2022, we entered into a five-year senior unsecured revolving credit facility (“Credit Facility”) with certain lenders that allows us to borrow up to $ 1.05 billion to fund working capital and general corporate-purpose expenditures.

In May 2022, we entered into a five-year senior unsecured revolving credit facility (the “Credit Facility”) with certain lenders that allows us to borrow up to $ 1.05 billion to fund working capital and general corporate-purpose expenditures.

Loans bear interest, at our option, at a rate equal to (i) a term secured overnight financing rate (“SOFR”) plus 0.75 % or the base rate, if selected by us, for loans made in U.S.

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We have non-cancelable contractual agreements primarily related to the hosting of our data processing, storage, and other computing services, as well as lease, content and developer partner, and other commitments.

We had $ 3.0 billion in commitments as of December 31, 2023, primarily due within three years .

For additional discussion on leases, see Note 9 to our consolidated financial statements.

For additional discussion on leases, see Note 9 of these consolidated financial statements.

Our non-cancelable contractual commitments as of December 31, 2024 were as follows:

Non-Cancelable Commitments

(in thousands)

Year ending December 31,

2025 $ 1,458,829

2026 1,835,591

2027 1,051,169

Thereafter 423,135

Total non-cancelable contractual commitments $ 4,940,241

Contingencies

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In November 2021, we, and certain of our officers and directors, were named as defendants in a securities class- action lawsuit purportedly brought on behalf of purchasers of our Class A common stock, alleging that we and certain of our officers made false or misleading statements and omissions concerning the impact that Apple’s App Tracking Transparency framework would have on our business.

We believe we have meritorious defenses to this lawsuit and

continue to defend the lawsuit vigorously.

Based on the preliminary nature of the proceedings in this case, the outcome of this matter remains uncertain.

We believe we have meritorious defenses to this lawsuit and continue to defend the lawsuit vigorously.

Based on the proceedings in this case, the outcome of this matter remains uncertain.

The outcomes of our legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to our financial condition, results of operations, and cash flows for a particular period.

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We have not incurred material costs to defend lawsuits or settle claims related to these indemnifications as of December 31, 2024.

We believe the fair value of these liabilities is immaterial and accordingly have no liabilities recorded for these agreements at December 31, 2023.

We believe the fair value of these liabilities is immaterial and accordingly have no liabilities recorded for these agreements as of December 31, 2024.

We have non-cancelable lease agreements for certain of our offices with original lease terms expiring between 2025 and 2042.

Total operating lease costs were $ 101.0 million, $ 101.0 million, and $ 109.5 million for the years ended December 31, 2024, 2023 , and 2022 , respectively.

The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows:

The weighted-average remaining lease term (in years) and discount rate related to our operating leases were as follows:

As of December 31,

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These operating leases will commence starting in 2025 with lease terms of approximately 10 years to 11 years.

Cash payments included in the measurement of our o perating lease liabilities were $ 97.7 million, $ 94.9 million, and $ 73.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Cash payments included in the measurement of our o perating lease liabilities, net of lease incentives received, were $ 101.4 million, $ 89.8 million, and $ 92.2 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Lease liabilities arising from obtaining operating lease right-of-use assets were $ 71.0 million, $ 220.2 million, and $ 147.4 million for the years ended December 31, 2024, 2023, and 2022, respectively .

Strategic Investments

We hold strategic investments primarily in privately held companies, which consist of equity securities, and to a lesser extent, debt securities.

We hold strategic investments primarily in privately held companies, consisting primarily of equity securities without readily determinable fair values, and to a lesser extent, debt securities.

These strategic investments are primarily recorded at fair value on a non-recurring basis.

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Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets.

We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value.

We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing observable market-based inputs to determine their fair value.

The following tables set forth our financial assets that are measured at fair value on a recurring basis, excluding publicly traded equity securities, as of December 31, 2024 and 2023:

December 31, 2024

Fair Value Hierarchy Cost or

Amortized Cost Gross

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Cash $ 348,251 $ — $ — $ 348,251

Level 1 securities:

government securities 1,295,918 894 ( 3,919 ) 1,292,893

government agency securities 138,420 31 ( 188 ) 138,263

Level 2 securities:

Corporate debt securities 234,336 577 ( 99 ) 234,814

Commercial paper 65,380 — — 65,380

Certificates of deposit 18,725 — — 18,725

Cash equivalents:

Money market funds Level 1 694,323 — ( 30 ) 694,293

government securities Level 1 3,991 — ( 1 ) 3,990

Total cash and cash equivalents 1,046,565 — ( 31 ) 1,046,534

Marketable debt securities:

government securities Level 1 2,186,192 4,984 ( 3,292 ) 2,187,884

Corporate debt securities Level 2 129,217 229 ( 5 ) 129,441

Total marketable debt securities 2,315,409 5,213 ( 3,297 ) 2,317,325

Total $ 3,361,974 $ 5,213 $ ( 3,328 ) $ 3,363,859

December 31, 2023

Fair Value Hierarchy Cost or

Amortized Cost Gross

2 unchanged sentences

Cash $ 584,990 $ — $ — $ 584,990

Level 1 securities:

government securities 1,630,224 109 ( 9,484 ) 1,620,849

government agency securities 175,269 19 ( 188 ) 175,100

Level 2 securities:

Corporate debt securities 309,942 32 ( 1,462 ) 308,512

Commercial paper 290,589 — — 290,589

Certificates of deposit 157,965 — ( 1 ) 157,964

Cash equivalents:

Money market funds Level 1 1,195,410 — — 1,195,410

Total cash and cash equivalents 1,780,400 — — 1,780,400

Marketable debt securities:

government securities Level 1 1,295,918 894 ( 3,919 ) 1,292,893

government agency securities Level 1 138,420 31 ( 188 ) 138,263

Corporate debt securities Level 2 234,336 577 ( 99 ) 234,814

Commercial paper Level 2 65,380 — — 65,380

Certificates of deposit Level 2 18,725 — — 18,725

Total marketable debt securities 1,752,779 1,502 ( 4,206 ) 1,750,075

Total $ 3,533,179 $ 1,502 $ ( 4,206 ) $ 3,530,475

Gross unrealized losses on marketable debt securities were not material for the years ended December 31, 2023 and 2022.

Gross unrealized losses on marketable debt securities were not material as of December 31, 2024 and 2023.

As of December 31, 2024 and 2023, we considered any decreases in fair value on our marketable debt securities to be driven by factors other than credit risk, including market risk.

As of December 31, 2023, $ 760.2 million of our total $ 1.8 billion in marketable debt securities have contractual maturities between one and five years .

As of December 31, 2024, $ 1.1 billion of our total $ 2.3 billion in marketable debt securities have contractual maturities between one and five years .

All other marketable debt securities have contractual maturities less than one year.

We hold investments in publicly traded companies with an aggregate carrying value of $ 13.6 million and $ 91.5 million as of December 31, 2023 and 2022, respectively, primarily recorded as marketable securities.

We hold investments in publicly traded companies with an aggregate carrying value of $ 12.4 million and $ 13.6 million as of December 31, 2024 and 2023, respectively, recorded as marketable securities.

We classify these publicly traded equity securities within Level 1 because we use quoted market prices to determine their fair value.

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We carry the Convertible Notes at face value less the unamortized debt issuance costs on our consolidated balance sheets and present the fair value for disclosure purposes only.

As of December 31, 2024, the fair value of the 2025 Notes, the 2026 Notes, the 2027 Notes, the 2028 Notes, and the 2030 Notes was $ 35.5 million, $ 242.7 million, $ 998.5 million, $ 1,226.6 million, and $ 635.6 million, respectively.

As of December 31, 2023, the fair value of the 2025 Notes, the 2026 Notes, the 2027 Notes, and the 2028 Notes was $ 300.9 million, $ 893.2 million, $ 921.5 million, and $ 1,181.7 million, respectively.

As of December 31, 2022, the fair value of the 2025 Notes, the 2026 Notes, the 2027 Notes, and the 2028 Notes was $ 257.0 million, $ 711.9 million, $ 796.2 million, and $ 1.0 billion, respectively.

The estimated fair value of the Convertible Notes, which are classified as Level 2 financial instruments, was determined based on the estimated or actual bid prices of the Convertible Notes in an over-the-counter market on the last business day of the period.

Schedule of Cash, Cash Equivalents, and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in our consolidated balance sheet to the total of the amounts in the consolidated statements of cash flows.

As of December 31,

2024 2023 2022

(in thousands)

Cash and cash equivalents $ 1,046,534 $ 1,780,400 $ 1,423,121

Restricted cash, included in other assets 3,700 2,062 655

Total cash, cash equivalents, and restricted cash $ 1,050,234 $ 1,782,462 $ 1,423,776

The domestic and foreign components of pre-tax loss were as follows:

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federal research & development credit benefit 11.0 8.6 5.0

corporate rate increase — — 39.8

Acquisitions and divestitures ( 1.0 ) 1.8 ( 0.7 )

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The OECD has since issued administrative guidance providing transition and safe harbor rules around the implementation of the Pillar Two global minimum tax.

A number of countries, including the United Kingdom, are currently proposing or have enacted legislation to implement core elements of the Pillar Two proposal by the start of 2024.

A number of countries, including the United Kingdom, are currently proposing or have enacted legislation to implement core elements of the Pillar Two proposal.

On February 1, 2023, the FASB indicated that they believe the minimum tax imposed under Pillar Two is an alternative minimum tax, and, accordingly, deferred tax assets and liabilities associated with the minimum tax would not be recognized or adjusted for the estimated future effects of the minimum tax but would be recognized in the period incurred.

While we are still closely monitoring developments and evaluating the potential impact on future periods, we do not expect

Pillar Two to have a significant impact on our financial results, particularly due to safe harbor relief during the transition period.

Beginning January 1, 2022, the Tax Cuts and Jobs Act eliminated the option to currently deduct research and development expenditures in the period incurred and required taxpayers to capitalize and amortize such expenditures over five or fifteen years, as applicable, pursuant to Section 174 of the Internal Revenue Code.

Although this tax law change did not result in any U.S.

federal tax liability through December 31, 2023 due to the use of existing U.S.

federal net operating loss carryforwards, it did result in incremental state tax liability and expense due to limitations on the use of existing state net operating loss carryforwards.

On June 10, 2021, the U.K.

Finance Act 2021 was enacted, increasing the U.K.

tax rate from 19 % to 25 % effective April 1, 2023.

This change in tax rate resulted in a $ 188.9 million increase to our U.K.

net deferred tax assets, which was fully offset by an increase in our valuation allowance, for the period ending December 31, 2021.

We are closely monitoring developments and evaluating their potential impact.

Enactments effective in 2024 did not have a significant impact on our

2024 financial results, nor do we anticipate a significant impact on our financial results during the transition period due to safe harbor relief.

As of December 31, 2024, we had an immaterial amount of unremitted earnings related to certain foreign subsidiaries.

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federal and state net operating loss carryforwards of $ 6.1 billion and $ 4.4 billion, respectively.

Of the $ 6.7 billion of federal net operating loss carryforwards, $ 0.5 billion was generated before January 1, 2018 and is subject to a 20 -year carryforward period.

During 2024, we fully utilized all of our federal net operating loss carryforwards generated before January 1, 2018, which were subject to a 20 -year carryforward period and no taxable income limitation.

The remaining $ 6.1 billion can be carried forward indefinitely but is subject to an 80 % taxable income limitation.

The pre-2018 federal and certain significant state net operating loss carryforwards will begin to expire in 2037 and 2031, respectively.

Certain significant state net operating loss carryforwards will begin to expire in 2031.

As of December 31, 2024, we had $ 4.7 billion of U.K.

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however, use of such carryforwards in a given year is generally limited to 50 % of such year’s taxable income.

As of December 31, 2024, we had accumulated $ 214.0 million of Singapore net operating loss carryforwards, which can be carried forward indefinitely and are not subject to any taxable income limitation.

As of December 31, 2024, we had accumulated U.S.

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state research tax credits do not expire.

Beginning January 1, 2022, the Tax Cuts and Jobs Act eliminated the option to currently deduct research and development expenditures in the period incurred and requires taxpayers to capitalize and amortize such expenditures over five or fifteen years, as applicable, pursuant to Section 174 of the Internal Revenue Code.

In prior years, this tax law change did not result in any U.S.

federal tax liability due to the availability of pre-2018 federal net operating loss carryforwards.

However, as these pre-2018 carryforwards were fully utilized in 2024, the application of the 80% taxable income limitation on remaining federal net operating loss carryforwards resulted in incremental U.S.

federal tax liability and expense for the year ended December 31, 2024.

We continue to incur incremental state tax liability and expense due to limitations on the use of existing state net operating loss carryforwards.

We recognize valuation allowances on deferred tax assets if it is more likely than not that some or all of the deferred tax assets will not be realized.

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Changes due to foreign currency translation adjustments ( 574 ) ( 175 ) ( 929 )

corporate rate increase — — 7,914

Ending balance of unrecognized tax benefits (excluding interest and penalties) 562,808 513,404 510,669

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Our policy is to recognize interest and penalties associated with tax matters as part of the income tax provision and include accrued interest and penalties with the related income tax liability on our consolidated balance sheet.

During the year ended December 31, 2023, interest expense recorded related to uncertain tax positions was not material.

For the year ended December 31, 2024, interest expense recorded related to uncertain tax positions was not material.

The income taxes we pay are subject to potential review by taxing jurisdictions globally.

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We are currently under examination by the U.K.

tax authorities for tax years 2020 and 2021, and also in various other jurisdictions covering multiple tax years.

tax authorities for tax years 2020 through 2022, and also in various other jurisdictions covering multiple tax years.

Accumulated Other Comprehensive Income (Loss)

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(in thousands)

Balance at December 31, 2022 $ ( 11,129 ) $ ( 2,845 ) $ ( 13,974 )

OCI before reclassifications 8,643 12,836 21,479

Balance as of December 31, 2023 $ ( 2,860 ) $ 9,991 $ 7,131

Other comprehensive income (loss) before reclassifications 4,811 ( 9,027 ) ( 4,216 )

Amounts reclassified from AOCI (1)

( 221 ) — ( 221 )

Net current period OCI 8,269 12,836 21,105

Balance at December 31, 2023 $ ( 2,860 ) $ 9,991 $ 7,131

Net current period other comprehensive income (loss) 4,590 ( 9,027 ) ( 4,437 )

Balance as of December 31, 2024 $ 1,730 $ 964 $ 2,694

(1) Realized gains and losses on marketable securities are reclassified from AOCI into other income (expense), net in our consolidated statements of operations.

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Total 818,011 674,710

accumulated depreciation and amortization ( 264,384 ) ( 218,593 )

accumulated depreciation ( 328,923 ) ( 264,384 )

Property and equipment, net $ 489,088 $ 410,326

Depreciation and amortization expense on property and equipment was $ 87.3 million, $ 69.9 million, and $ 55.9 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Noncash property and equipment additions in accounts payable, accrued expenses and other current liabilities were $ 44.5 million, $ 28.0 million, and $ 14.2 million as of December 31, 2023, 2022, and 2021, respectively.

The following table lists property and equipment, net by geographic area:

As of December 31,

(in thousands)

United States $ 247,106 $ 214,857

United Kingdom 122,013 36,774

Rest of world (1)

41,207 20,146

Total property and equipment, net $ 410,326 $ 271,777

(1) No individual country exceeded 10% of our total property and equipment, net for any period presented.

Depreciation on property and equipment was $ 98.0 million, $ 87.3 million, and $ 69.9 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Noncash property and equipment additions in accounts payable, accrued expenses and other current liabilities were $ 29.3 million, $ 44.5 million, and $ 28.0 million for the years ended December 31, 2024, 2023, and 2022, respectively .

Balance Sheet Components

Accrued expenses and other current liabilities at December 31, 2023 and 2022 consisted of the following:

Accrued expenses and other current liabilities as of December 31, 2024 and 2023 consisted of the following:

As of December 31,

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Accrued infrastructure costs $ 377,022 $ 281,682

Partner revenue share liabilities 99,877 83,395

Accrued compensation and related expenses 95,600 206,441

Deferred revenue (1)

112,769 93,706

Other operating costs 75,905 75,376

Acquisition liabilities 7,359 293,332

Accrued compensation and related expenses 85,416 95,600

Accrued revenue share 84,990 81,936

Deferred payments for acquisitions 76,434 7,359

Accrued professional fees 69,618 33,267

Accrued operating costs 62,375 75,905

Other 140,630 136,381

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Employee Benefit Plans

We have a defined contribution 401(k) plan (the “401(k) Plan”) for our U.S.-based employees.

We have a defined contribution savings plan for U.S.-based employees under the provisions of the U.S.

Internal Revenue Code Section 401(k) (the “401(k) Plan”).

The 401(k) Plan is available for all full-time employees who meet certain eligibility requirements.

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We match 100 % of each participant’s contribution up to a maximum of 3 % of the participant’s eligible compensation paid during the period, and also match 50 % of each participant’s contribution between 3 % and 5 % of the participant’s eligible compensation paid during the period.

During the years ended December 31, 2023, 2022, and 2021, we recognized expense of $ 34.0 million, $ 33.6 million, and $ 25.0 million, respectively, related to matching contributions.

For the years ended December 31, 2024, 2023, and 2022, we recognized expense of $ 29.6 million, $ 34.0 million, and $ 33.6 million, respectively, related to matching contributions.

Related Party Transactions

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Restructuring

2024 Restructuring

In the first quarter of 2024, we announced a plan to reduce hierarchy and concentrate our team members in major hub locations to support in-person collaboration, resulting in the reduction of our global headcount by approximately 10 %.

We completed the 2024 restructuring in the second quarter of 2024.

The following table summarizes the 2024 restructuring charges included in our consolidated statement of operations for the year ended December 31, 2024 :

Severance and Related Charges (1)

Stock-Based Compensation Expense Other (2)

(in thousands)

Cost of revenue $ 932 $ 189 $ — $ 1,121

Research and development 30,845 4,801 3,201 38,847

Sales and marketing 15,755 4,176 — 19,931

General and administrative 7,786 236 2,236 10,258

Total $ 55,318 $ 9,402 $ 5,437 $ 70,157

(1) Severance and related charges include cash severance expenses and other termination benefits.

The majority of cash paid for the restructuring was related to severance and benefits.

(2) Other primarily includes intangible asset amortization and depreciation expense.

AR Enterprise Strategic Review

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(3) Other includes impairment charges, contract termination charges, and intangible asset amortization.

The liabilities related to the strategic reprioritization plan were immaterial as of December 31, 2023 and 2022.

Subsequent Events

On February 5, 2024, we announced a plan to reduce our global headcount by approximately 10 % of our global full-time employees.

As a result, we currently estimate that we will incur pre-tax charges in the range of $ 55 million to $ 75 million, primarily consisting of severance and related costs, and other charges, of which $ 45 million to $ 55 million are expected to be future cash expenditures.

The majority of these costs are expected to be incurred during the first quarter of 2024.

We had no liabilities related to the strategic reprioritization plan as of December 31, 2024.

The liabilities were immaterial as of December 31, 2023 and 2022.

Segments and Geographic Information

Our CEO is our CODM.

Our CODM evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis, accompanied by information about revenue disaggregated by geographic region.

Because our CODM evaluates financial performance on a consolidated basis, we have determined that we have a single operating segment composed of the consolidated financial results of Snap Inc.

The measure used by our CODM to assess performance and make operating decisions is net loss as reported on our consolidated statements of operations.

Net loss is used by our CODM to identify underlying trends in the performance of our business and make comparisons with the financial performance of our competitors.

Our CODM also reviews total assets, as reported on our consolidated balance sheets, and purchases of property and equipment, as reported on our consolidated statements of cash flows.

Our CODM also utilizes expense information in order to assess our financial performance.

Infrastructure costs primarily consist of payments to th ird-party infrastructure partners for hosting our products, which include expenses related to storage, computing, and bandwidth.

Content and developer partner costs primarily consist of fees paid to our content creators and publisher partners who share content on our platform through revenue sharing arrangements.

Operating expenses include all remaining costs necessary to operate our business, which primarily include personnel exp enses, facilities and related costs, promotional and marketing expenses, external professional services, and other administrative expenses.

Operating expenses include charges recognized as research and development, selling and marketing, and general and administrative expenses within our consolidated statements of operations, but exclude stock-based compensation and related payroll and other tax expenses, depreciation and amortization, and restructuring charges, which are independently reviewed by our CODM.

The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM:

Year Ended December 31,

2024 2023 2022

(in thousands)

Revenue $ 5,361,398 $ 4,606,115 $ 4,601,847

Infrastructure costs 1,441,134 1,171,993 818,554

Content and developer partner costs 634,977 621,971 643,482

Advertising partner and other costs 384,804 297,262 302,498

Operating expenses 2,391,878 2,353,312 2,459,740

Stock-based compensation and related payroll and other tax expense 1,069,389 1,359,107 1,397,496

Depreciation and amortization 154,459 159,999 186,434

Other segment items (1)

( 17,387 ) ( 35,044 ) 223,296

Net loss $ ( 697,856 ) $ ( 1,322,485 ) $ ( 1,429,653 )

(1) Other segment items primarily include interest income;

interest expense;

other income (expense), net;

and income tax benefit (expense) as reported in our consolidated statements of operations.

Other segment items also include restructuring charges of $ 72.1 million , $ 40.8 million and $ 188.9 million for the year ended December 31, 2024, 2023 and 2022, respectively.

The following table lists long-lived assets by geographic area, which includes property and equipment, net and operating lease right-of-use assets:

As of December 31,

(in thousands)

United States $ 682,173 $ 646,546

United Kingdom 248,243 218,326

Rest of world (1)

89,113 62,316

Total long-lived assets $ 1,019,529 $ 927,188

(1) No individual country other than the United States and the United Kingdom exceeded 10% of our total long-lived assets for any period presented.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data