Snapchat S-1 Filing

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S-1 1 d270216ds1.htm S-1
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AsfiledwiththeSecuritiesandExchangeCommissiononFebruary2,2017.
RegistrationNo.333

UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
WASHINGTON,D.C.20549

FORMS1
REGISTRATIONSTATEMENT
UNDER
THESECURITIESACTOF1933

SnapInc.
(ExactNameofRegistrantasSpecifiedinItsCharter)

Delaware 7370 455452795
(StateorOtherJurisdictionof (PrimaryStandardIndustrial (I.R.S.Employer
IncorporationorOrganization) ClassificationCodeNumber) IdentificationNumber)
63MarketStreet
Venice,California90291
(310)3993339
(Address,IncludingZipCode,andTelephoneNumber,Including
AreaCode,ofRegistrantsPrincipalExecutiveOffices)

EvanSpiegel
ChiefExecutiveOfficer
SnapInc.
63MarketStreet
Venice,California90291
(310)3993339
(Name,address,includingzipcode,andtelephonenumber,including
areacode,ofagentforservice)

Copiesto:

EricC.Jensen ChrisHandman RichardA.Kline
DavidPeinsipp AtulPorwal AnthonyJ.McCusker
SethJ.Gottlieb SnapInc. AnYenE.Hu
AlexK.Kassai 63MarketStreet GoodwinProcterLLP
CooleyLLP Venice,California90291 135CommonwealthDrive
3175HanoverStreet (310)3993339 MenloPark,California94025
PaloAlto,California94304 (650)7523100
https://www.sec.gov/Archives/edgar/data/1564408/000119312517029199/d270216ds1.htm 1/247
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(650)8435000

Approximatedateofcommencementofproposedsaletothepublic:
Assoonaspracticableafterthisregistrationstatementbecomeseffective.
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IfanyofthesecuritiesbeingregisteredonthisFormaretobeofferedonadelayedorcontinuousbasispursuanttoRule415under
theSecuritiesActof1933,checkthefollowingbox.
IfthisFormisfiledtoregisteradditionalsecuritiesforanofferingpursuanttoRule462(b)undertheSecuritiesAct,checkthe
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
IfthisFormisaposteffectiveamendmentfiledpursuanttoRule462(c)undertheSecuritiesAct,checkthefollowingboxandlist
theSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.
IfthisFormisaposteffectiveamendmentfiledpursuanttoRule462(d)undertheSecuritiesAct,checkthefollowingboxandlist
theSecuritiesActregistrationstatementnumberoftheearliereffectiveregistrationstatementforthesameoffering.
Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anonacceleratedfiler,orasmaller
reportingcompany.Seethedefinitionsoflargeacceleratedfiler,acceleratedfilerandsmallerreportingcompanyinRule12b2
oftheExchangeAct.(Checkone):

Largeacceleratedfiler Acceleratedfiler
Nonacceleratedfiler (Donotcheckifasmallerreportingcompany) Smallerreportingcompany

CALCULATIONOFREGISTRATIONFEE

ProposedMaximum
TitleofeachClassof AggregateOffering Amountof
SecuritiestobeRegistered Price(1)(2) RegistrationFee
ClassAcommonstock,parvalue$0.00001pershare

$3,000,000,000 $347,700.00

(1) EstimatedsolelyforthepurposeofcalculatingtheregistrationfeeinaccordancewithRule457(o)oftheSecuritiesActof1933,
asamended.
(2) Includestheaggregateofferingpriceofadditionalsharesthattheunderwritershavetheoptiontopurchase,ifany.

TheRegistrantherebyamendsthisRegistrationStatementonsuchdateordatesasmaybenecessarytodelayitseffective
dateuntiltheRegistrantwillfileafurtheramendmentwhichspecificallystatesthatthisRegistrationStatementwillthereafter
becomeeffectiveinaccordancewithSection8(a)oftheSecuritiesActof1933,asamended,oruntiltheRegistrationStatement
will become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may
determine.

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.

PROSPECTUS(SubjecttoCompletion)
DatedFebruary2,2017
Shares

ClassACommonStock

This is an initial public offering of shares of non-voting ClassA common stock of Snap Inc.
Snap Inc. is offering to sell shares of ClassA common stock in this offering. The selling stockholders identied in this
prospectus are offering an additional shares of ClassA common stock. We will not receive any of the proceeds from the sale
of the shares being sold by the selling stockholders.

We have three classes of common stock: ClassA common stock, Class B common stock, and Class C common stock. The rights of
the holders of ClassA common stock, Class B common stock, and Class C common stock are identical, except with respect to voting,
conversion, and transfer rights. ClassA common stock is non-voting. Anyone purchasing ClassA common stock in this offering
will therefore not be entitled to any votes. Each share of Class B common stock is entitled to one vote and is convertible into one
share of ClassA common stock. Each share of Class C common stock is entitled to ten votes and is convertible into one share of
Class B common stock. The holders of our outstanding Class C common stock, each of whom is a founder, an executive ofcer, and
a director of the company, will hold approximately % of the voting power of our outstanding capital stock following this
offering.

Before this offering, there has been no public market for our ClassA common stock. It is currently estimated that the initial public
offering price will be between $ and $ per share. We have applied to list our ClassA common stock on the New York
Stock Exchange under the symbol SNAP.

We are an emerging growth company under the Jumpstart Our Business Startups Act of 2012, have elected to comply with
reduced public company reporting requirements, and may elect to comply with reduced public company reporting requirements in
future lings.
See Risk Factors beginning on page 12 to read about factors you should consider before buying our
ClassAcommonstock.

Underwriting Proceeds to
Discounts and Proceedsto Selling
Priceto Public Commissions(1) Snap Inc. Stockholders
Pershare $ $ $ $
Total $ $ $ $

(1) SeeUnderwritingforadescriptionofthecompensationpayabletotheunderwriters.
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Atourrequest,theunderwritershavereservedupto7.0%ofthesharesofClassAcommonstockofferedbythisprospectusforsale,at
theinitialpublicofferingprice,tocertainindividualsassociatedwithus.SeeUnderwritingDirectedShareProgram.
TotheextentthattheunderwriterssellmorethansharesofClassAcommonstock,theunderwritershavetheoptiontopurchase
uptoanadditionalsharesofClassAcommonstockfromcertainofthesellingstockholdersattheinitialpublicofferingprice
lesstheunderwritingdiscount.
The Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities or
determinedifthisprospectusistruthfulorcomplete.Anyrepresentationtothecontraryisacriminaloffense.
TheunderwritersexpecttodeliverthesharesagainstpaymentinNewYork,NewYorkon,2017.

MorganStanley Goldman,Sachs&Co. J.P.Morgan DeutscheBankSecurities
Barclays CreditSuisse Allen&CompanyLLC
Prospectusdated,2017
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SnapInc.isacameracompany.
Webelievethatreinventingthecamerarepresentsourgreatestopportunitytoimprovethewaypeopleliveandcommunicate.
Ourproductsempowerpeopletoexpressthemselves,liveinthemoment,learnabouttheworld,andhavefuntogether.
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180
160
FiveyeasatSnapInc.
140
120
100
80
60
40
20
Launch
SnapchatbeginsasPicaboo,apicturemessagingapponiOS.
2011
Snapchat
PicabooisrenamedSnapchatisborn!
>1k
dailyactiveusers
2012
>100k
dailyactiveusers
Android
SnapchatlaunchesonAndroid.
>1m
dailyactiveusers
Video
Snapchataddsvideo.users
cannowsendpictureand
videomessages.
2013
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Stories
SnapchatlaunchesStories.UserscanwatchtheStoryofafriendsdayintheorderithappened!
Partygoatatedc
LiveStory
SnapchatlaunchesitsfirstLiveStory,curatingthousandsofperspectivesfromusersatamusicfestivalintoonecommunitynarrative.
>50m
dailyactiveusers
2014
Chat
SnapchataddsChat.Nowuserscansend
textsandvideochats!
SmartFilters&Replay
SnapchatintroducesSmartFilters(timestamp,temperature,andspeed)aswellastheabilitytoreplaySnaps.
FirstAd
ABrandStoryforthefilmOuijabecomesthefirstpaidadvertisementtorunonSnapchat.
2015
Geofilters
Geofilterslaunch.Userscanshowfriendswheretheyarewithlocationspecificartwork.
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Lenses
LenseslaunchonSnapchat.Usersbarfrainbowsforthefirsttime.
Discover
Discoverlaunches,featuringPublisherStorieswithpremiumvideocontent.
Memories
Memorieslaunches,givingusersaplacetosavetheirfavoriteSnapsandStories,andthenrelivethemlater.
Chat2.0
SnapchatredesignsChatbyaddingStickers,voiceandvideocalling,andvoiceandvideonotes,whichallcanbesentinaChatconversation.
>100m
dailyactiveusers
International
Snapchatsfirstinternationalsalesofficeopens.
OnDemand
Geofilters
WithOnDemandGeofilters,userscannowdesignandbuyafiltertomakeanygettogethermorefun.
>150m
dailyactiveusers
Spectacles
SnapchatcreatesSpectacles,sunglasses
withanintegratedvideocamerathatmakesiteasytocreateMemories.
Bitmojis
SnapchataddsBitmojis,anewwaytocreateapersonalizedcartoonavatarandsendittofriends.
GroupChat
SnapchataddsGroupChat.Nowuserscancommunicatewithupto16friendsonSnapchatatthesametime.
DailyActiveUsers(inmillions)
ADailyActiveUserisdefinedasaregisteredSnapchatuserwhoopenstheSnapchatapplicationatleastonceduringadefined24hourperiod.WemeasureaverageDailyActiveUsersforaparticularquarterbycalculatingtheaverageDailyActiveUsersfortheentirequarter.
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TABLEOFCONTENTS

Page Page
PROSPECTUSSUMMARY 1 RELATEDPERSONTRANSACTIONS 148
RISKFACTORS 12 PRINCIPALANDSELLINGSTOCKHOLDERS 150
SPECIALNOTEREGARDINGFORWARD DESCRIPTIONOFCAPITALSTOCK 153
LOOKINGSTATEMENTS 44 SHARESELIGIBLEFORFUTURESALE 161
MARKET,INDUSTRY,ANDOTHERDATA 46 MATERIALU.S.FEDERALINCOMETAX
USEOFPROCEEDS 48 CONSEQUENCESTONONU.S.HOLDERS 164
DIVIDENDPOLICY 48 UNDERWRITING 168
CAPITALIZATION 50 LEGALMATTERS 177
DILUTION 54 CHANGESININDEPENDENTREGISTERED
SELECTEDCONSOLIDATEDFINANCIALDATA 57 PUBLICACCOUNTINGFIRM 177
MANAGEMENTSDISCUSSIONANDANALYSIS EXPERTS 178
OFFINANCIALCONDITIONANDRESULTSOF WHEREYOUCANFINDADDITIONAL
OPERATIONS 60 INFORMATION 178
BUSINESS 88 INDEXTOCONSOLIDATEDFINANCIAL
MANAGEMENT 125 STATEMENTS F1
EXECUTIVECOMPENSATION 133

Neitherwe,thesellingstockholders,noranyoftheunderwritershaveauthorizedanyonetoprovideyouwithanyinformationor
tomakeanyrepresentationsotherthanascontainedinthisprospectusorinanyfreewritingprospectuseswehaveprepared.Neither
we, the selling stockholders, nor the underwriters take responsibility for, and provide no assurance about the reliability of, any
informationthatothersmaygiveyou.Thisprospectusisanoffertosellonlythesharesofferedhereby,butonlyundercircumstances
and in jurisdictions where it is lawful to do so. The information contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or any sale of the ClassA common stock. Our business, financial
condition,resultsofoperations,andprospectsmayhavechangedsincethatdate.
Unlessotherwiseindicated,allreferencesinthisprospectustoSnap,thecompany,we,our,us,orsimilartermsreferto
SnapInc.anditssubsidiaries.
NoactionisbeingtakeninanyjurisdictionoutsidetheUnitedStatestopermitapublicofferingofourClassAcommonstockor
possession or distribution of this prospectus in any such jurisdiction. Persons who come into possession of this prospectus in
jurisdictionsoutsidetheUnitedStatesarerequiredtoinformthemselvesaboutandtoobserveanyrestrictionsaboutthisofferingand
thedistributionofthisprospectusapplicabletothosejurisdictions.

Throughandincluding,2017(the25thdayafterthedateofthisprospectus),alldealerseffectingtransactionsinthese
securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealers
obligationtodeliveraprospectuswhenactingasanunderwriterandwithrespecttoanunsoldallotmentorsubscription.
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PROSPECTUSSUMMARY
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of the
informationyoushouldconsiderbeforeinvestinginourClassAcommonstock.Youshouldreadthisentireprospectuscarefully,
including Risk Factors, Managements Discussion and Analysis of Financial Condition and Results of Operations, and our
consolidated financial statements and the related notes included elsewhere in this prospectus, before making an investment
decision.
Unlessotherwisestated,statisticalinformationregardingourusersandtheiractivitiesisdeterminedbycalculatingthedaily
averageoftheselectedactivityforthemostrecentlycompletedquarterincludedinthisprospectus.
SNAPINC.
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.
In the way that the flashing cursor became the starting point for most products on desktop computers, we believe that the
camerascreenwillbethestartingpointformostproductsonsmartphones.Thisisbecauseimagescreatedbysmartphonecameras
contain more context and richer information than other forms of input like text entered on a keyboard. This means that we are
willingtotakerisksinanattempttocreateinnovativeanddifferentcameraproductsthatarebetterabletoreflectandimproveour
lifeexperiences.
OurProducts
Snapchat
Ourflagshipproduct,Snapchat,isacameraapplicationthatwascreatedtohelppeoplecommunicatethroughshortvideosand
images. We call each of those short videos or images a Snap. On average, 158 million people use Snapchat daily, and over 2.5
billionSnapsarecreatedeveryday.
Camera.SnapchatopensdirectlyintotheCamera,makingiteasytocreateaSnapandsendittofriends.Snapsaredeletedby
default,sothereisalotlesspressuretolookprettyorperfectwhencreatingandsendingimagesonSnapchat.Weofferlotsoffun
Creative Tools like Lenses, Geofilters, and Bitmojis that allow our community to express themselves through Snaps. Lenses are
interactiveanimationsthatareoverlaidonapersonsfaceortheworldaroundthem.Geofiltersareartisticfiltersthatcanbeapplied
afteraSnapistakenatpredefinedtimesandlocations.BitmojisarecartoonlikenessesofauserthatarecreatedintheBitmoji
application.Onaverage,morethan60%ofourDailyActiveUserscreateSnapswithourCameraeveryday.Thismeansthatour
ChatServiceandStorytellingPlatformproductsarealwaysfullofnew,unique,andexpressiveSnaps.
ChatService. The first version of our application was a Chat Service that made it easy to send Snaps back and forth with
friendshence the name Snapchat. Our Chat Service has since been reimagined to include textbased Chat, video and voice
calling,stickers,Bitmojis,andGroupChat.Onaverage,morethan60%ofourDailyActiveUsersuseourChatServiceeveryday
to send Snaps and talk with friends. We benefit from the frequency with which our user base communicates with one another
becauseeachmessageinvitesauserbacktotheapplicationwhentheyreceiveapushnotification.Onaverage,ourDailyActive
UsersvisitSnapchatmorethan18timeseachday.

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Storytelling Platform. Stories are collections of Snaps that play in chronological order and are deleted within 24 hours.
Different types of Stories are told from different perspectives. We started with My Story for eachindividual user, expanded to
community Live Stories, and then introduced Publisher Stories created by ourexperiencedpublisher partners. On average, over
25%ofourDailyActiveUsersposttotheirStoryeveryday.OurStorytellingPlatformprovidesauniquevarietyofpersonaland
professionalcontentforourcommunitytoenjoy.Ourcommunityspendsanaverageof25to30minutesonSnapchateveryday.
Memories.WeintroducedMemoriestogiveeachusertheoptionofsavingtheirSnapsinapersonalcollection.Userscansend
SnapsfromMemoriestofriendsandcreatenewStoriesfromsavedSnaps.Wealsodevelopedourownsearchandprivacytoolsto
helpusersfindtheSnapstheyarelookingforandstorethemsecurely.
PublisherTools
We offer a growing suite of content tools for partners to build, edit, and publish Snaps and attachments based on unique
editorialcontent.ThesePublisherToolsgiveourpublishersandadvertiserscreativeopportunitiestoengagewithourcommunity
everyday.
Spectacles
Our latest effort to reinvent the camera is Spectacles, our sunglasses that make Snaps. Spectacles connect seamlessly with
SnapchatandarethebestwaytomakeMemoriesbecausetheycapturevideofromahumanperspective.
OurStrategyandOpportunity
Ourstrategyistoinvestinproductinnovationandtakeriskstoimproveourcameraplatform.Wedothisinanefforttodrive
user engagement, which we can then monetize through advertising. We use the revenue we generate to fund future product
innovationtogrowourbusiness.
Webelievethatthebestwaytocompeteinaworldofwidelydistributedmobileapplicationsisinnovatingtocreatethemost
engaging products. New mobile software is available to everyone immediately, and usually for free. While not all of our
investmentswillpayoffinthelongrun,wearewillingtotakerisksinanattempttocreatethebestandmostdifferentiatedproducts
onthemarket.
Duetothenatureofourproductsandbusiness,ourabilitytosucceedinanygivencountryislargelydependentonitsmobile
infrastructureanditsadvertisingmarket.Thesefactorsinfluenceourproductperformance,ourhostingcosts,andourmonetization
opportunityineachmarket.
Ourproductsoftenrequireintensiveprocessingandgeneratehighbandwidthconsumptionbyourusers.Asaresult,ourusers
tendtocomefromdevelopedcountrieswithhighendmobiledevicesandhighspeedcellularinternet.Thesemarketsalsotendto
havecheaperbandwidthcosts,meaningthatitislessexpensivetoserveourcommunityinthesecountries.
Substantiallyallofourrevenuecomesfromadvertising,soourabilitytogeneraterevenueinaparticularcountrydependson
thesizeofitsadvertisingmarket.Globaladvertisingspendespeciallymobileadvertisingspendisextremelyconcentrated,with
over70%ofoveralladvertisingspendandnearly85%ofmobileadvertisingspendcomingfromthetoptenadvertisingmarkets,
accordingtoInternationalDataCorporation,orIDC.Onaverage,over60%ofourDailyActiveUserscomefromcountriesonthis
list.

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We benefit greatly from the fact that many of our users are in markets where we have the highest capital efficiency and
monetizationpotential,allowingustogeneraterevenueandcashflowthatwecantheninvestintofutureproductinnovation.
Worldwide advertising spend is expected to grow from $652 billion in 2016 to $767 billion in 2020. The fastest growing
segmentismobileadvertising,whichisexpectedtogrownearly3xfrom$66billionin2016to$196billionin2020.Webelieve
thatoneofthemajorfactorsdrivingthisgrowthistheshiftofpeoplesattentionfromtheirtelevisionstotheirmobilephones.This
trend is particularly pronounced among the younger demographic, where our Daily Active Users tend to be concentrated.
According to Nielsen, people between the ages of 18 and 24 spent 35% less time watching traditional (live and timeshifted)
televisioninanaveragemonthduringthesecondquarterof2016comparedtothesecondquarterof2010.
OurBusiness
Wegeneraterevenueprimarilythroughadvertising.Wehelpouradvertisingpartnersgenerateareturnontheirinvestmentby
creatingengagingadvertisingproductsthatreachourlargeanddesirableaudience.
AdvertisingProducts
Ouradvertisingproductsarebuiltonthesamefoundationthatmakesourconsumerproductssuccessful.Onewaywetryto
accomplish this is by having the same team that designs our consumer products also help design our advertising products. This
means that we can take the things we learn while creating our consumer products and apply them to building innovative and
engagingadvertisingproductsfamiliartoourcommunity.

Sponsored Creative Tools. Following the success of our Creative Tools, we built new ways to help people express
themselvesusingcreativeprovidedbyouradvertisingpartners.PeoplecancreateSnapsusingSponsoredCreativeTools,

like Sponsored Lenses and Sponsored Geofilters, or view them by watching their friends Snaps that contain the
advertisingcreative.

SnapAdswithAttachments.SnapAdsareverticalfullscreenvideoadvertisementsinthefamiliarSnapformat.Weplay
SnapAdsinStories,andonaverageover60%ofSnapAdsarewatchedwithaudioon.Wehavealsoenabledinteractive

attachmentssothataviewercanrespondtoanadvertisementdirectlyfromaSnapAdtowatchmorecontentortakean
actionwithoutleavingtheSnapchatapplication.
AdvertisingDelivery
We show advertisements that we think will be relevant to each user. Our advertising delivery framework is designed to
optimizerelevanceacrosstheentireplatform,decreasingthenumberofwastedimpressionsandimprovingtheadvertisingshown
toourcommunity.
Wearealwaysworkingtoimproveourdeliverybasedonpastdeliverydecisions.Wecanmakebetterchoiceswhenwehave
more options, such as more available impressions and more advertisements to fill them with. This means that we expect our
advertisingdeliverytoimprovetotheextentthatuserengagementgrowsandouradvertisingbusinessscales.
MeasuringAdvertisingEffectiveness
Weofferavarietyofthirdpartyandinhousesolutionstomeasureadvertisingeffectivenessinfourkeyareas.

Weworkwithpartnerstoverifythatanadvertisementwasinfactdeliveredtoagivenuser.Inadditiontoworkingwith

severalthirdpartyverificationproviders,wewerealaunchpartnerfortheMoatVideo

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Score,aviewabilityandattentionstandardforsight,sound,andmotionthatcanbeappliedconsistentlyacrossdifferent

platforms.

Advertiserswanttoknowthatanadvertisementisdeliveredtotherightaudience.Weworkwiththirdpartiestomeasure
the reach and frequency of a campaign, and the demographics of the users that viewed the campaign. For example,

MillwardBrownmeasuredthatapproximately88%ofthepeoplewhosawanadvertisingcampaignformensdeodorant
weremalesbetweentheagesof13and34theadvertiserstargetdemographicforthecampaign.

Somecampaignsarefocusedonchangingpeoplesperceptionsandattitudestowardaproductorabrand.Weworkwith
partners to measure statistical lifts in ad recall, brand favorability, and purchase intent. For example, when a music

streamingserviceranaSnapAdcampaign,MillwardBrownmeasuredthatitdrovea30%liftinsubscriptionintent,2x
themobilenorm,anda24percentagepointincreaseinadrecall,1.5xthemobilenorm.

Many brands run advertising campaigns because they want people to take an action. We offer several solutions to
measure things like sales lift, instore visitation, and application installations. For example, a study with Oracle Data
Cloudacrossmultipleconsumerpackagegoods,orCPG,campaignsfoundthat92%ofthecampaignsdroveapositive
liftininstoresales,withtwohomecarecampaignsresultinginover$100inrevenueperthousandimpressionsa6x
returnonadvertisingspend.
Ouradvertisingbusinessisstillyoungbutgrowingrapidly.FortheyearendedDecember31,2016,werecordedrevenueof
$404.5 million, as compared to revenue of $58.7 million for the year ended December 31, 2015, representing a yearoveryear
increaseofmorethan6x.Ourglobalaveragerevenueperuser,orARPU,inthethreemonthsendedDecember31,2016was$1.05,
comparedto$0.31forthesameperiodin2015.InNorthAmerica,ourARPUinthethreemonthsendedDecember31,2016was
$2.15 compared to $0.65 for the same period in 2015. For the year ended December 31, 2016, we incurred a net loss of
$514.6 million, as compared to a net loss of $372.9 million for the year ended December 31, 2015. For the year ended
December31,2016,ourAdjustedEBITDAwas$(459.4)million,ascomparedto$(292.9)millionfortheyearendedDecember31,
2015. For the year ended December 31, 2016, net cash used in operating activities was $611.2 million as compared to
$306.6 million for the year ended December 31, 2015. For the year ended December 31, 2016, our Free Cash Flow was
$(677.7)millionascomparedto$(325.8)millionfortheyearendedDecember31,2015.Foradescriptionofhowwecalculateour
revenue,ARPU,AdjustedEBITDA,andFreeCashFlow,andfactorsthatmayaffectthesemetrics,seeManagementsDiscussion
andAnalysisofFinancialConditionandResultsofOperations.
OurCapitalStructure
Wehavethreeclassesofcommonstock:ClassA,ClassB,andClassC.HoldersofourClassAcommonstocktheonlyclass
of stock being sold in this offeringare entitled to no vote on matters submitted to our stockholders. Holders of our Class B
commonstockareentitledtoonevotepershare.AndholdersofClassCcommonstockareentitledtotenvotespershare.Holders
ofsharesofClassBcommonstockandClassCcommonstockwillvotetogetherasasingleclassonallmatters(includingthe
electionofdirectors)submittedtoavoteofstockholders.
AsaresultoftheClassCcommonstockthattheyhold,EvanSpiegel,ourcofounderandChiefExecutiveOfficer,andRobert
Murphy,ourcofounderandChiefTechnologyOfficer,willbeabletoexercisevotingrightswithrespecttoanaggregateof
sharesofClassCcommonstock,whichwillrepresentapproximately%ofthevotingpowerofouroutstandingcapitalstock
immediatelyfollowingthisoffering.Asaresult,Mr.SpiegelandMr.Murphy,andpotentiallyeitheroneofthemalone,havethe
ability to control the outcome of all matters submitted to our stockholders for approval, including the election, removal, and
replacementof

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directors and any merger, consolidation, or sale of all or substantially all of our assets. If Mr. Spiegels or Mr. Murphys
employment with us is terminated, they will continue to have the ability to exercise the same significant voting power and
potentiallycontroltheoutcomeofallmatterssubmittedtoourstockholdersforapproval.EitherofourcofounderssharesofClass
CcommonstockwillautomaticallyconvertintoClassBcommonstock,onaonetoonebasis,ninemonthsfollowinghisdeathor
onthedateonwhichthenumberofoutstandingsharesofClassCcommonstockheldbysuchholderrepresentslessthan30%of
theClassCcommonstock,orsharesofClassCcommonstock,heldbysuchholderontheclosingofthisoffering.Should
eitherofourcofoundersClassCcommonstockbeconvertedtoClassBcommonstock,theremainingcofounderwillbeableto
exercisevotingcontroloverouroutstandingcapitalstock.
This concentrated control could delay, defer, or prevent a change of control, merger, consolidation, or sale of all or
substantiallyallofourassetsthatourotherstockholderssupport.Conversely,thisconcentratedcontrolcouldallowourcofounders
toconsummateatransactionthatourotherstockholdersdonotsupport.Inaddition,ourcofoundersmaymakelongtermstrategic
investmentdecisionsandtakerisksthatmaynotbesuccessfulandmayseriouslyharmourbusiness.
AlthoughotherU.S.basedcompanieshavepubliclytradedclassesofnonvotingstock,toourknowledge,noothercompany
hascompletedaninitialpublicofferingofnonvotingstockonaU.S.stockexchange.Wecannotpredictwhetherthisstructureand
the concentrated control it affords Mr. Spiegel and Mr. Murphy will result in a lower trading price or greater fluctuations in the
tradingpriceofourClassAcommonstockascomparedtothetradingpriceiftheClassAcommonstockhadvotingrights.Nor
canwepredictwhetherthisstructurewillresultinadversepublicityorotheradverseconsequences.Foradiscussionregardingthe
rights,preferences,andprivilegesofourcommonstock,seeDescriptionofCapitalStock.
WedonotintendtotakeadvantageofthecontrolledcompanyexemptiontothecorporategovernancerulesforNYSElisted
companies.
RiskFactorsSummary
Our business is subject to numerous risks and uncertainties, including those highlighted in Risk Factors immediately
followingthisprospectussummary.Theserisksinclude:

Our ecosystem of users, advertisers, and partners depends on the engagement of our user base. We anticipate that the
growthrateofouruserbasewilldeclineovertime.Ifwefailtoretaincurrentusersoraddnewusers,orifourusers
engagelesswithSnapchat,ourbusinesswouldbeseriouslyharmed.

Snapchat depends on effectively operating with mobile operating systems, hardware, networks, regulations, and
standardsthatwedonotcontrol.Changesinourproductsortothoseoperatingsystems,hardware,networks,regulations,
orstandardsmayseriouslyharmourusergrowth,retention,andengagement.

WerelyonGoogleCloudforthevastmajorityofourcomputing,storage,bandwidth,andotherservices.Anydisruption
oforinterferencewithouruseoftheGoogleCloudoperationwouldnegativelyaffectouroperationsandseriouslyharm
ourbusiness.

Wegeneratesubstantiallyallourrevenuefromadvertising.Thefailuretoattractnewadvertisers,thelossofadvertisers,

orareductioninhowmuchtheyspend,couldseriouslyharmourbusiness.

Ourtwocofoundershavecontroloverallstockholderdecisionsbecausetheycontrolasubstantialmajorityofourvoting
stock. The Class A common stock issued in this offering will not dilute our cofounders voting control because the
ClassAcommonstockhasnovotingrights.

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Ifwedonotdevelopsuccessfulnewproductsorimproveexistingones,ourbusinesswillsuffer.Wealsoinvestinnew

linesofbusinessthatcouldfailtoattractorretainusersorgeneraterevenue.

Ourbusinessishighlycompetitive.Wefacesignificantcompetitionthatweanticipatewillcontinuetointensify.Ifwe

arenotabletomaintainorimproveourmarketshare,ourbusinesscouldsuffer.

Wehaveincurredoperatinglossesinthepast,expecttoincuroperatinglossesinthefuture,andmayneverachieveor

maintainprofitability.

Thelossofoneormoreofourkeypersonnel,orourfailuretoattractandretainotherhighlyqualifiedpersonnelinthe

future,couldseriouslyharmourbusiness.

We have a short operating history and a new business model, which makes it difficult to evaluate our prospects and

futurefinancialresultsandincreasestheriskthatwewillnotbesuccessful.

Ifoursecurityiscompromisedorifourplatformissubjectedtoattacksthatfrustrateorthwartourusersabilitytoaccess
ourproductsandservices,ourusers,advertisers,andpartnersmaycutbackonorstopusingourproductsandservices
altogether,whichcouldseriouslyharmourbusiness.

Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived

inaccuraciesinthosemetricsmayseriouslyharmandnegativelyaffectourreputationandourbusiness.

WearenotawareofanyothercompanythathascompletedaninitialpublicofferingofnonvotingstockonaU.S.stock
exchange.Wethereforecannotpredicttheimpactourcapitalstructureandtheconcentratedcontrolbyourfoundersmay
haveonourstockpriceorourbusiness.
CorporateInformation
Wewereformedin2010asFutureFreshman,LLC,aCalifornialimitedliabilitycompany,andchangedournametoToyopa
Group,LLCin2011.In2012,weincorporatedasSnapchat,Inc.,aDelawarecorporation,andchangedournametoSnapInc.in
2016.
Our principal executive offices are located at 63 Market Street, Venice, California 90291, and our telephone number is
(310)3993339.Ourwebsiteaddressiswww.snap.com.Informationcontainedon,orthatcanbeaccessedthrough,ourwebsiteis
not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this
prospectus. The Snap design logo, Snapchat, and our other registered and common law trade names, trademarks, and service
marksarethepropertyofSnapInc.oroursubsidiaries.
Additionally,weareanemerginggrowthcompanyasdefinedintheJumpstartOurBusinessStartupsActof2012,orthe
JOBSAct.Wemaytakeadvantageofcertainexemptionsfromvariouspubliccompanyreportingrequirements,includingnotbeing
requiredtohaveourinternalcontroloverfinancialreportingauditedbyourindependentregisteredpublicaccountingfirmunder
Section 404 of the SarbanesOxley Act of 2002, or the SarbanesOxley Act, reduced disclosure obligations regarding executive
compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisoryvoteonexecutivecompensationandanygoldenparachutepayments.Wemaytakeadvantageoftheseexemptionsforup
tofiveyearsoruntilwearenolongeranemerginggrowthcompany,whicheverisearlier.Inaddition,theJOBSActprovidesthat
an emerging growth company can delay adopting new or revised accounting standards until those standards apply to private
companies.Wehavenotelectedtoavailourselvesofthisexemptionand,therefore,wewillbesubjecttothesameneworrevised
accountingstandardsasotherpubliccompaniesthatarenotemerginggrowthcompanies.

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TheOffering

ClassAcommonstockofferedbyus shares
ClassAcommonstockofferedbytheselling
stockholders shares
ClassAcommonstocktobeoutstandingafterthis
offering shares
ClassBcommonstocktobeoutstandingafterthis
offering shares
ClassCcommonstocktobeoutstandingafterthis
offering shares
TotalClassAcommonstock,ClassBcommonstock,
andClassCcommonstocktobeoutstandingafter
thisoffering shares
OptiontopurchaseadditionalsharesofClassA
commonstockofferedbycertainofthesellingstockholders
shares
Useofproceeds We estimate that our net proceeds from the sale of our
ClassAcommonstockthatweareofferingwillbe$
billion,assuminganinitialpublicofferingpriceof$
pershare,themidpointoftheestimatedpricerangesetforth
on the cover page of this prospectus, and after deducting
estimated underwriting discounts and commissions and
estimatedofferingexpensespayablebyus.
The principal purposes of this offering are to increase our
capitalization and financial flexibility and create a public
marketforourClassAcommonstock.Weintendtousethe
net proceeds we receive from this offering for general
corporate purposes, including working capital, operating
expenses, and capital expenditures. We may also use a
portion of the net proceeds to acquire complementary
businesses,products,services,ortechnologies.However,we
are not contemplating any material acquisitions at this time.
Wemayalsouseaportionofthenetproceedstosatisfytax
withholding obligations related to the vesting of restricted
stockunits,orRSUs.Wewillnotreceiveanyoftheproceeds
fromthesaleofClassAcommonstockinthisofferingbythe
selling stockholders. See Use of Proceeds for additional
information.
Votingrights We will have three classes of common stock: Class A
commonstock,ClassBcommonstock,andClassCcommon
stock. Class A common stock is not entitled to any votes.
ClassBcommonstockisentitledtoonevotepershareand
ClassCcommonstockisentitledtotenvotespershare.

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HoldersofourClassAcommonstockarenotentitledtoany
votes, except as required by Delaware law. Holders of
Class B common stock and Class C common stock will
generally vote together as a single class, unless otherwise
required by Delaware law or our amended and restated
certificate of incorporation. The holders of our outstanding
Class C common stock, each of whom is a founder, an
executiveofficer,andadirector,willhold%ofthevoting
power of our outstanding shares following this offering and
will have the ability to control the outcome of matters
submitted to our stockholders for approval, including the
election of our directors and the approval of any change in
controltransaction.SeePrincipalandSellingStockholders
and Description of Capital Stock for additional
information.
Concentrationofownership Once this offering is completed, the holders of our
outstanding Class C common stock will beneficially own
%ofouroutstandingsharesand%ofthevotingpower
of our outstanding shares and our executive officers,
directors, and stockholders holding more than 5% of our
outstanding shares, together with their affiliates, will
beneficiallyown,intheaggregate,approximately%ofour
outstanding shares and % of the voting power of our
outstandingshares.
ProposedNYSEtradingsymbol SNAP
ThenumberofsharesofClassAcommonstock,ClassBcommonstock,andClassCcommonstockthatwillbeoutstanding
afterthisoffering(whichincludesharesofClassAcommonstockandClassBcommonstocktobenetissuedonthevestingof
certainoutstandingRSUssubjecttoaperformanceconditioninconnectionwiththisoffering)isbasedon512,527,443sharesof
Class A common stock, 283,817,489 shares of Class B common stock, and 215,887,848 shares of Class C common stock
outstandingasofDecember31,2016,andexcludes:

21,185,669sharesofClassBcommonstockissuableontheexerciseofstockoptionsoutstandingasofDecember31,
2016underourAmendedandRestated2012EquityIncentivePlan,or2012Plan,withaweightedaverageexerciseprice

of$2.33pershareand21,185,669sharesofClassAcommonstockissuableontheexerciseofsuchoptionsunderthe
ClassADividenddescribedbelow

18,068,299sharesofClassBcommonstockissuableonthevestingandsettlementofRSUsoutstandingasofDecember
31,2016underour2012Planand18,068,299sharesofClassAcommonstockissuableonthevestingandsettlementof
suchRSUsundertheClassADividenddescribedbelow

1,266,433 shares of ClassA common stock issuable on the exercise of stock options outstanding as of December 31,
2016underourAmendedandRestated2014EquityIncentivePlan,or2014Plan,withaweightedaverageexerciseprice

of $1.00 per share and 1,266,433 shares of ClassA common stock issuable on the exercise of such options under the
ClassADividenddescribedbelow

70,099,641sharesofClassAcommonstockissuableonthevestingandsettlementofRSUsoutstandingasofDecember
31,2016underour2014Planand49,834,987sharesofClassAcommonstockissuableonthevestingandsettlementof
suchRSUsundertheClassADividenddescribedbelow

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sharesofSeriesFPpreferredstocksubjecttoanRSUawardtobegrantedtoEvanSpiegelontheclosingof
this offering, which will become an RSU covering an equivalent number of shares of Class C common stock on the
closingofthisofferingandconversionofallSeriesFPpreferredstocktoClassCcommonstock

355,522,498sharesofClassAcommonstockreservedforfutureissuanceunderour2017EquityIncentivePlan,or2017
Plan, which will become effective once the registration statement, of which this prospectus forms a part, is declared
effective,including:

an aggregate of 42,653,205 shares of ClassA common stock and Class B common stock reserved for issuance
underour2012Planand2014Plan,asofDecember31,2016,whichshareswillbeaddedtothesharesreserved
underthe2017Plan,plus

upto225,599,185additionalsharesthatmaybeaddedtothe2017Planontheexpiration,termination,forfeiture,
orotherreacquisitionofanysharesofClassAcommonstockandClassBcommonstockissuableontheexercise
ofstockoptionsoutstandingorvestingandsettlementofRSUsunderthe2012Planor2014Plan,plus

anyautomaticincreasesinthenumberofsharesofClassAcommonstockreservedforfutureissuanceunderthe

2017Plan

16,484,690 shares of ClassA common stock reserved for issuance under our 2017 Employee Stock Purchase Plan, or
ESPP, which will become effective once the registration statement, of which this prospectus forms a part, is declared

effective, and any automatic increases in the number of shares of ClassA common stock reserved for future issuance
underourESPP

2,500,000sharesofourClassAcommonstockreservedforfutureissuancetoouremployeesandconsultantsinFrance

underour2014Planand

uptoanaggregateof13,000,000sharesofourClassAcommonstockthatweplantodonatetotheSnapFoundation

afterthisofferingoveraperiodof15to20years.
Inaddition,unlesswespecificallystateotherwise,theinformationinthisprospectusassumes:

the filing of our amended and restated certificate of incorporation, which will be in effect on the completion of this

offering

theconversionofalloutstandingsharesofourSeriesFPpreferredstockintoanaggregateof215,887,848sharesofClass
Ccommonstockandallotheroutstandingsharesofpreferredstockintoanaggregateof246,813,076sharesofClassB
commonstock,ineachcaseimmediatelyontheclosingofthisoffering

thenetissuanceof7,625,096sharesofClassAcommonstockand5,535,592sharesofClassBcommonstockthatwill
vestandbeissuedfromthesettlementofcertainoutstandingRSUssubjecttoaperformancecondition,immediatelyon
theclosingofthisofferingand

no exercise of the underwriters option to purchase additional Class A common stock from certain of the selling

stockholdersinthisoffering.
In October 2016, we issued a dividend of one share of Class A common stock on all outstanding shares and securities
convertibleintosharesofourcapitalstock,whichwerefertoastheClassADividend.Unlessotherwiseindicated,sharenumbers
andfinancialdatainthisprospectusreflecttheClassADividend.

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SummaryConsolidatedFinancialData
The following table summarizes our consolidated financial data. We have derived the summary consolidated balance sheet
dataasofDecember31,2015and2016andconsolidatedstatementsofoperationsdatafortheyearsendedDecember31,2015and
2016 from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results are not
necessarily indicative of our results in any future period. You should read the following summary consolidated financial data
together with Managements Discussion and Analysis of Financial Condition and Results of Operations and our consolidated
financialstatementsandtherelatednotesincludedelsewhereinthisprospectus.Thesummaryconsolidatedfinancialdatainthis
sectionarenotintendedtoreplaceourconsolidatedfinancialstatementsandtherelatednotesandarequalifiedintheirentiretyby
theconsolidatedfinancialstatementsandrelatednotesincludedelsewhereinthisprospectus.

YearEndedDecember31,
2015 2016
(inthousands,exceptper
shareamounts)
ConsolidatedStatementsofOperationsData:
Revenue $ 58,663 $ 404,482
Costsandexpenses:
Costofrevenue 182,341 451,660
Researchanddevelopment 82,235 183,676
Salesandmarketing 27,216 124,371
Generalandadministrative

148,600

165,160

Totalcostsandexpenses

440,392

924,867

Lossfromoperations (381,729) (520,385)

Interestincome 1,399 4,654
Interestexpense (1,424)
Otherincome(expense),net

(152)

(4,568)

Lossbeforeincometaxes (380,482) (521,723)

Incometaxbenefit(expense)

7,589

7,080
Netloss $(372,893)
$(514,643)

NetlosspershareattributabletoClassAandClassBcommonstockholdersandSeriesD,E,F,andFP
preferredstockholders(1):
Basic $ (0.51) $

(0.64)

Diluted $ (0.51) $

(0.64)

ProformanetlosspershareattributabletoClassA,ClassB,andClassCcommonstockholders(1):

Basic $ (0.53)

Diluted $ (0.53)

(1) SeeNote15ofthenotestoourconsolidatedfinancialstatementsincludedelsewhereinthisprospectusforadescriptionof
howwecomputebasicanddilutednetlosspershareattributabletoClassAandClassBcommonstockholdersandSeriesD,
E,F,andFPpreferredstockholdersandproformabasicanddilutednetlosspershareattributabletoClassA,ClassB,and
ClassCcommonstockholders.

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December31,2016
ProForma
December31, Pro As
2015 Actual Forma(1) Adjusted(2)(3)
(inthousands)
ConsolidatedBalanceSheetData:
Cash,cashequivalents,andmarketablesecurities $ 640,810 $ 987,368
Workingcapital 536,306 1,023,241
Totalassets 938,936 1,722,792
Totalliabilities 174,791 203,878
Additionalpaidincapital 1,467,355 2,728,823
Accumulateddeficit (693,219) (1,207,862)
Totalstockholdersequity 764,145 1,518,914

(1) Theproformaconsolidatedbalancesheetdatagiveseffectto(i)theautomaticconversionofallofouroutstandingsharesof
convertiblepreferredstockotherthanSeriesFPpreferredstockintosharesofClassBcommonstockandtheconversionof
SeriesFPpreferredstockintosharesofClassCcommonstockinconnectionwithourinitialpublicoffering,(ii)stockbased
compensationexpenseofapproximately$1.1billionassociatedwithoutstandingRSUssubjecttoaperformanceconditionfor
which the servicebased vesting condition was satisfied as of December 31, 2016 and which we will recognize on the
effectivenessofourregistrationstatementinconnectionwiththisoffering,asfurtherdescribedinNote1toourconsolidated
financialstatementsincludedelsewhereinthisprospectus,(iii)theincreaseinaccruedexpensesandothercurrentliabilities
andanequivalentdecreaseinadditionalpaidincapitalof$187.2millioninconnectionwiththewithholdingtaxobligations,
basedon$16.33pershare,whichisthefairvalueofourcommonstockasofDecember31,2016,asweintendtoissueshares
ofClassAcommonstockandClassBcommonstockonanetbasistosatisfytheassociatedwithholdingtaxobligations,(iv)
thenetissuanceof7.6millionsharesofClassAcommonstockand5.5millionsharesofClassBcommonstockthatwillvest
andbeissuedfromthesettlementofsuchRSUs,(v)theissuanceoftheCEOaward,asdescribedbelow,and(vi)thefilingand
effectiveness of our amended and restated certificate of incorporation which will be in effect on the completion of this
offering. The pro forma adjustment related to stockbased compensation expense of approximately $1.1 billion has been
reflectedasanincreasetoadditionalpaidincapitalandaccumulateddeficit.
On the closing of this offering, our CEO will receive an RSU award, or the CEO award, for shares of Series FP preferred
stock,whichwillbecomeanRSUcoveringanequivalentnumberofsharesofClassCcommonstockontheclosingofthis
offering.TheCEOawardwillrepresent3.0%ofalloutstandingsharesontheclosingofthisoffering,whichincludesshares
soldbyusinthisofferingandtheemployeeRSUsthatwillvestontheeffectivedateofthisoffering,asdescribedabove.The
CEO award will vest immediately on the closing of this offering and such shares will be delivered to our CEO in equal
quarterlyinstallmentsoverthreeyearsbeginninginthethirdfullcalendarquarterfollowingthisoffering.

(2) Theproformaasadjustedconsolidatedbalancesheetdatareflects(i)theitemsdescribedinfootnote(1)aboveand(ii)our
receiptofestimatednetproceedsfromthesaleofsharesofClassAcommonstockthatweareofferingatanassumedinitial
publicofferingpriceof$pershare,themidpointofthepricerangesetforthonthecoverpageofthisprospectus,after
deductingtheestimatedunderwritingdiscountsandcommissionsandestimatedofferingexpensespayablebyus.

(3) A$1.00increase(decrease)intheassumedinitialpublicofferingpriceof$persharewouldincrease(decrease)eachof
cash, cash equivalents, and marketable securities, working capital, total assets, additional paidin capital, and total
stockholdersequityby$million,assumingthatthenumberofsharesofferedbyus,assetforthonthecoverpageofthis
prospectus,remainsthesame,andafterdeductingtheestimatedunderwritingdiscountsandcommissionspayablebyus.

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RISKFACTORS
InvestinginourClassAcommonstockinvolvesahighdegreeofrisk.Youshouldcarefullyconsidertherisksanduncertainties
describedbelow,togetherwithalltheotherinformationinthisprospectus,includingManagementsDiscussionandAnalysisofthe
FinancialConditionandResultsofOperationsandtheconsolidatedfinancialstatementsandtherelatednotesincludedelsewherein
thisprospectus,beforedecidingwhethertoinvestinsharesofourClassAcommonstock.Ifanyofthefollowingrisksactuallyoccurs,
our business, reputation, financial condition, results of operations, revenue, and future prospects could be seriously harmed. Unless
otherwise indicated, references to our business being seriously harmed in these risk factors will include harm to our business,
reputation, financial condition, results of operations, revenue, and future prospects. In that event, the market price of our Class A
commonstockcoulddecline,andyoucouldlosepartorallofyourinvestment.
RisksRelatedtoOurBusinessandIndustry
Ourecosystemofusers,advertisers,andpartnersdependsontheengagementofouruserbase.Weanticipatethatthegrowthrateof
ouruserbasewilldeclineovertime.Ifwefailtoretaincurrentusersoraddnewusers,orifourusersengagelesswithSnapchat,
ourbusinesswouldbeseriouslyharmed.
Wehad158millionDailyActiveUsersonaverageinthequarterendedDecember31,2016,andweviewDailyActiveUsersasa
critical measure of our user engagement. Adding, maintaining, and engaging Daily Active Users have been and will continue to be
necessary.WeanticipatethatourDailyActiveUsersgrowthratewilldeclineovertimeifthesizeofouractiveuserbaseincreasesor
weachievehighermarketpenetrationrates.IfourDailyActiveUsersgrowthrateslows,ourfinancialperformancewillincreasingly
dependonourabilitytoelevateuserengagementorincreaseourmonetizationofusers.Ifcurrentandpotentialusersdonotperceive
ourproductstobefun,engaging,anduseful,wemaynotbeabletoattractnewusers,retainexistingusers,ormaintainorincreasethe
frequencyanddurationoftheirengagement.Inaddition,becauseourproductstypicallyrequirehighbandwidthdatacapabilities,the
majority of our users live in countries with highend mobile device penetration and high bandwidth capacity cellular networks with
large coverage areas. We therefore do not expect to experience rapid user growth or engagement in countries with low smartphone
penetrationevenifsuchcountrieshavewellestablishedandhighbandwidthcapacitycellularnetworks.Wemayalsonotexperience
rapidusergrowthorengagementincountrieswhere,eventhoughsmartphonepenetrationishigh,duetothelackofsufficientcellular
baseddatanetworks,consumersrelyheavilyonWiFiandmaynotaccessourproductsregularly.
Snapchatisfreeandeasytojoin,thebarriertoentryfornewentrantsislow,andtheswitchingcoststoanotherplatformarealso
low. Moreover, the majority of our users are 1834 years old. This demographic may be less brand loyal and more likely to follow
trends than other demographics. These factors may lead users to switch to another product, which would negatively affect our user
retention, growth, and engagement. Snapchat also may not be able to penetrate other demographics in a meaningful manner. For
example,users25andoldervisitedSnapchatapproximately12timesandspentapproximately20minutesonSnapchateverydayon
average in the quarter ended December 31, 2016, while users younger than 25 visited Snapchat over 20 times and spent over
30 minutes on Snapchat every day on average during the same period. Falling user retention, growth, or engagement could make
Snapchatlessattractivetoadvertisersandpartners,whichmayseriouslyharmourbusiness.OurDailyActiveUsersmaynotcontinue
togrow.Forexample,althoughDailyActiveUsersgrewby7%from143millionDailyActiveUsersforthequarterendedJune30,
2016to153millionDailyActiveUsersforthequarterendedSeptember30,2016,thegrowthinDailyActiveUserswasrelativelyflat
inthelatterpartofthequarterendedSeptember30,2016.Therearemanyfactorsthatcouldnegativelyaffectuserretention,growth,
andengagement,includingif:

usersincreasinglyengagewithcompetingproductsinsteadofours

ourcompetitorsmaymimicourproductsandthereforeharmouruserengagementandgrowth

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wefailtointroducenewandexcitingproductsandservicesorthoseweintroducearepoorlyreceived

ourproductsfailtooperateeffectivelyontheiOSandAndroidmobileoperatingsystems

we are unable to continue to develop products that work with a variety of mobile operating systems, networks, and

smartphones

we do not provide a compelling user experience because of the decisions we make regarding the type and frequency of

advertisementsthatwedisplay

weareunabletocombatspamorotherhostileorinappropriateusageonourproducts

therearechangesinusersentimentaboutthequalityorusefulnessofourexistingproducts

thereareconcernsabouttheprivacyimplications,safety,orsecurityofourproducts

ourpartnerswhoprovidecontenttoSnapchatdonotcreatecontentthatisengaging,useful,orrelevanttousers

our partners who provide content to Snapchat decide not to renew agreements or devote the resources to create engaging

contentordonotprovidecontentexclusivelytous

therearechangesinourproductsthataremandatedbylegislation,regulatoryauthorities,orlitigation,includingsettlements

orconsentdecreesthatadverselyaffecttheuserexperience

technical or other problems frustrate the user experience, particularly if those problems prevent us from delivering our

productsinafastandreliablemanner

wefailtoprovideadequateservicetousers,advertisers,orpartners

we,ourpartners,orothercompaniesinourindustryarethesubjectofadversemediareportsorothernegativepublicity

wedonotmaintainourbrandimageorourreputationisdamagedor

our current or future products reduce user activity on Snapchat by making it easier for our users to interact directly with

partners.
Anydecreasetouserretention,growth,orengagementcouldrenderourproductslessattractivetousers,advertisers,orpartners,
andwouldseriouslyharmourbusiness.
Snapchatdependsoneffectivelyoperatingwithmobileoperatingsystems,hardware,networks,regulations,andstandardsthatwe
donotcontrol.Changesinourproductsortothoseoperatingsystems,hardware,networks,regulations,orstandardsmayseriously
harmourusergrowth,retention,andengagement.
BecauseSnapchatisusedprimarilyonmobiledevices,theapplicationmustremaininteroperablewithpopularmobileoperating
systems,AndroidandiOS,andrelatedhardware,includingbutnotlimitedtomobiledevicecameras.Theownersofsuchoperating
systems,GoogleandApple,respectively,eachprovideconsumerswithproductsthatcompetewithours.Wehavenocontroloverthese
operating systems or hardware, and any changes to these systems or hardware that degrade our products functionality, or give
preferentialtreatmenttocompetitiveproducts,couldseriouslyharmSnapchatusageonmobiledevices.Ourcompetitorsthatcontrol
the operating systems and related hardware our application runs on could make interoperability of our products with those mobile
operatingsystemsmoredifficultordisplaytheircompetitiveofferingsmoreprominentlythanours.Weplantocontinuetointroduce
newproductsregularlyandhaveexperiencedthatittakestimetooptimizesuchproductstofunctionwiththeseoperatingsystemsand
hardware,impactingthepopularityofsuchproducts,andweexpectthistrendtocontinue.
ThemajorityofouruserengagementisonsmartphoneswithiOSoperatingsystems.Asaresult,althoughourproductsworkwith
Androidmobiledevices,wehaveprioritizeddevelopmentofourproductstooperatewith

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iOSoperatingsystemsratherthansmartphoneswithAndroidoperatingsystems.Tocontinuegrowthinuserengagement,wewillneed
to prioritize development of our products to operate on smartphones with Android operating systems. If we are unable to improve
operabilityofourproductsonsmartphoneswithAndroidoperatingsystems,andthosesmartphonesbecomemorepopularandfewer
peopleusesmartphoneswithiOSoperatingsystems,ourbusinesscouldbeseriouslyharmed.
Moreover,ourproductsrequirehighbandwidthdatacapabilities.Ifthecostsofdatausageincrease,ourusergrowth,retention,
andengagementmaybeseriouslyharmed.Additionally,todeliverhighqualityvideoandothercontentovermobilecellularnetworks,
ourproductsmustworkwellwitharangeofmobiletechnologies,systems,networks,regulations,andstandardsthatwedonotcontrol.
Inparticular,anyfuturechangestotheiOSorAndroidoperatingsystemsmayimpacttheaccessibility,speed,functionality,andother
performanceaspectsofourproducts,whichissuesarelikelytooccurinthefuturefromtimetotime.Inaddition,theadoptionofany
laws or regulations that adversely affect the growth, popularity, or use of the internet, including laws governing internet neutrality,
coulddecreasethedemandforourproductsandincreaseourcostofdoingbusiness.CurrentFederalCommunicationsCommission,or
FCC,openinternetrulesprohibitmobileprovidersintheUnitedStatesfromimpedingaccesstomostcontent,orotherwiseunfairly
discriminating against content providers like us. These rules also prohibit mobile providers from entering into arrangements with
specificcontentprovidersforfasterorbetteraccessovertheirdatanetworks.TheEuropeanUnionsimilarlyrequiresequalaccessto
internet content. Additionally, as part of its Digital Single Market initiative, the European Union may impose network security,
disabilityaccess,or911likeobligationsonoverthetopservicessuchasthoseprovidedbyus,whichcouldincreaseourcosts.Ifthe
FCC,Congress,theEuropeanUnion,orthecourtsmodifytheseopeninternetrules,mobileprovidersmaybeabletolimitourusers
ability to access Snapchat or make Snapchat a less attractive alternative to our competitors applications. Were that to happen, our
businesswouldbeseriouslyharmed.
Wemaynotsuccessfullycultivaterelationshipswithkeyindustryparticipantsordevelopproductsthatoperateeffectivelywith
thesetechnologies,systems,networks,regulations,orstandards.IfitbecomesmoredifficultforouruserstoaccessanduseSnapchat
ontheirmobiledevices,ifouruserschoosenottoaccessoruseSnapchatontheirmobiledevices,orifouruserschoosetousemobile
productsthatdonotofferaccesstoSnapchat,ourusergrowth,retention,andengagementcouldbeseriouslyharmed.
We rely on Google Cloud for the vast majority of our computing, storage, bandwidth, and other services. Any disruption of or
interferencewithouruseoftheGoogleCloudoperationwouldnegativelyaffectouroperationsandseriouslyharmourbusiness.
Google provides a distributed computing infrastructure platform for business operations, or what is commonly referred to as a
cloudcomputingservice,andwecurrentlyrunthevastmajorityofourcomputingonGoogleCloud.
Any transition of the cloud services currently provided by Google Cloud to another cloud provider would be difficult to
implementandwillcauseustoincursignificanttimeandexpense.Wehavecommittedtospend$2billionwithGoogleCloudoverthe
nextfiveyearsandhavebuiltoursoftwareandcomputersystemstousecomputing,storagecapabilities,bandwidth,andotherservices
providedbyGoogle,someofwhichdonothaveanalternativeinthemarket.Giventhis,anysignificantdisruptionoforinterference
with our use of Google Cloud would negatively impact our operations and our business would be seriously harmed. If our users or
partnersarenotabletoaccessSnapchatthroughGoogleCloudorencounterdifficultiesindoingso,wemayloseusers,partners,or
advertising revenue. The level of service provided by Google Cloud may also impact the usage of and our users, advertisers, and
partnerssatisfactionwithSnapchatandcouldseriouslyharmourbusinessandreputation.IfGoogleCloudexperiencesinterruptionsin
service regularly or for a prolonged basis, or other similar issues, our business would be seriously harmed. Hosting costs will also
increaseasouruserbaseanduserengagementgrowsandmayseriouslyharmourbusinessifweareunabletogrowourrevenuesfaster
thanthecostofutilizingtheservicesofGoogleorsimilarproviders.

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Inaddition,Googlemaytakeactionsbeyondourcontrolthatcouldseriouslyharmourbusiness,including:

discontinuingorlimitingouraccesstoitsGoogleCloudplatform

increasingpricingterms

terminatingorseekingtoterminateourcontractualrelationshipaltogether

establishingmorefavorablerelationshipswithoneormoreofourcompetitorsor

modifyingorinterpretingitstermsofserviceorotherpoliciesinamannerthatimpactsourabilitytorunourbusinessand

operations.
Googlehasbroaddiscretiontochangeandinterpretitstermsofserviceandotherpolicieswithrespecttous,andthoseactions
may be unfavorable to us. Google may also alter how we are able to process data on the Google Cloud platform. If Google makes
changesorinterpretationsthatareunfavorabletous,ourbusinesswouldbeseriouslyharmed.
We generate substantially all of our revenue from advertising. The failure to attract new advertisers, the loss of advertisers, or a
reductioninhowmuchtheyspendcouldseriouslyharmourbusiness.
SubstantiallyallofourrevenueisgeneratedfromthirdpartiesadvertisingonSnapchat,atrendthatweexpecttocontinue.Forthe
yearsendedDecember31,2015and2016,advertisingrevenueaccountedfor98%and96%oftotalrevenue,respectively.Althoughwe
have recently tried to establish longerterm advertising commitments with advertisers, most advertisers do not have longterm
advertisingcommitmentswithus,andoureffortstoestablishlongtermcommitmentsmaynotsucceed.
Whilenosingleadvertiserorcontentpartneraccountsformorethan10%ofourrevenue,manyofouradvertisersonlyrecently
startedworkingwithusandspendarelativelysmallportionoftheiroveralladvertisingbudgetwithus.Inaddition,advertisersmay
viewsomeofourproductsasexperimentalandunproven.Advertiserswillnotcontinuetodobusinesswithusifwedonotdeliver
advertisementsinaneffectivemanner,oriftheydonotbelievethattheirinvestmentinadvertisingwithuswillgenerateacompetitive
return relative to other alternatives. Moreover, we rely heavily on our ability to collect and disclose data and metrics to and for our
advertiserstoattractnewadvertisersandretainexistingadvertisers.Anyrestriction,whetherbylaw,regulation,policy,orotherreason,
onourabilitytocollectanddisclosedatawhichouradvertisersfindusefulwouldimpedeourabilitytoattractandretainadvertisers.
Ouradvertisingrevenuecouldbeseriouslyharmedbymanyotherfactors,including:

adecreaseinthenumberofDailyActiveUsersonSnapchat

adecreaseintheamountoftimespentonSnapchatordecreasesinusageofourCreativeTools,ChatService,orStorytelling

Platform

ourinabilitytocreatenewproductsthatsustainorincreasethevalueofouradvertisements

changesinouruserdemographicsthatmakeuslessattractivetoadvertisers

decreasesinusageofourCreativeTools

lackofadcreativeavailabilitybyouradvertisingpartners

ourpartnerswhoprovidecontenttousmaynotrenewagreementsordevotetheresourcestocreateengagingcontentordo

notprovidecontentexclusivelytous

changesinouranalyticsandmeasurementsolutionsthatdemonstratethevalueofouradvertisementsandothercommercial

content

competitive developments or advertiser perception of the value of our products that change the rates we can charge for

advertisingorthevolumeofadvertisingonSnapchat

productchangesoradvertisinginventorymanagementdecisionswemaymakethatchangethetype,size,orfrequencyof

advertisementsdisplayedonSnapchat

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adverselegaldevelopmentsrelatingtoadvertising,includingchangesmandatedbylegislation,regulation,orlitigation

adverse media reports or other negative publicity involving us, our founders, our partners, or other companies in our

industry

thedegreetowhichusersskipadvertisementsandthereforediminishthevalueofthoseadvertisementstoadvertisers

changesinthewayadvertisingispricedoritseffectivenessismeasured

ourinabilitytomeasuretheeffectivenessofouradvertisingortargettheappropriateaudienceforadvertisements

ourinabilitytocollectanddisclosedatathatnewandexistingadvertisersmayfinduseful

difficulty and frustration from advertisers who may need to reformat or change their advertisements to comply with our

guidelinesand

themacroeconomicclimateandthestatusoftheadvertisingindustryingeneral.
Theseandotherfactorscouldreducedemandforouradvertisingproducts,whichmaylowerthepriceswereceive,orcauseadvertisers
tostopadvertisingwithusaltogether.Eitherofthesewouldseriouslyharmourbusiness.
Ourtwocofoundershavecontroloverallstockholderdecisionsbecausetheycontrolasubstantialmajorityofourvotingstock.The
ClassAcommonstockissuedinthisofferingwillnotdiluteourcofoundersvotingcontrolbecausetheClassAcommonstockhas
novotingrights.
AsaresultoftheClassCcommonstockthattheyhold,EvanSpiegel,ourcofounderandChiefExecutiveOfficer,andRobert
Murphy,ourcofounderandChiefTechnologyOfficer,willbeabletoexercisevotingrightswithrespecttoanaggregateof
sharesofClassCcommonstock,whichwillrepresentapproximately%ofthevotingpowerofouroutstandingcapitalstock
immediatelyfollowingthisoffering.Inaddition,ontheclosingofthisoffering,Mr.SpiegelwillbegrantedtheCEOawardforshares
of Series FP preferred stock representing 3.0% of all outstanding shares on the closing of this offering, which will become an RSU
covering an equivalent number of shares of Class C common stock on the closing of this offering. This RSU award will vest
immediatelyontheclosingofthisofferingandsuchshareswillbedeliveredtoourCEOquarterlyoverthenextthreeyearsbeginning
in the third full quarter following this offering, at which point Mr. Spiegel alone may be able to exercise voting control over our
outstandingcapitalstock.TheClassAcommonstockissuedinthisofferingwillhavenovotingrights,andsharesofClassBcommon
stockorClassCcommonstocksoldbyexistingstockholderswilllosevotingrightswhensuchsharesconvertintoClassAcommon
stockorClassBcommonstockassuchsharesaresold.Asaresult,Mr.SpiegelandMr.Murphy,andpotentiallyeitheroneofthem
alone,havetheabilitytocontroltheoutcomeofallmatterssubmittedtoourstockholdersforapproval,includingtheelection,removal,
and replacement of directors and any merger, consolidation, or sale of all or substantially all of our assets. If Mr. Spiegels or
Mr.Murphysemploymentwithusisterminated,theywillcontinuetohavetheabilitytoexercisethesamesignificantvotingpower
andpotentiallycontroltheoutcomeofallmatterssubmittedtoourstockholdersforapproval.EitherofourcofounderssharesofClass
CcommonstockwillautomaticallyconvertintoClassBcommonstock,onaonetoonebasis,ninemonthsfollowinghisdeathoron
thedateonwhichthenumberofoutstandingsharesofClassCcommonstockheldbysuchholderrepresentslessthan30%oftheClass
Ccommonstockheldbysuchholderontheclosingofthisoffering,orsharesofClassCcommonstock.Shouldeitherofour
cofoundersClassCcommonstockbeconvertedtoClassBcommonstock,theremainingcofounderwillbeabletoexercisevoting
controloverouroutstandingcapitalstock.
Inaddition,inOctober2016,weissuedadividendofoneshareofnonvotingClassAcommonstocktoallourequityholders,
whichwillprolongourcofoundersvotingcontrol.Asaresultofsuchdividend,ourco

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founderswillbeabletoliquidatetheirholdingsofnonvotingClassAcommonstockwithoutdiminishingtheirvotingcontrol.Inthe
future,ourboardofdirectorsmay,fromtimetotime,decidetoissuespecialorregularstockdividendsintheformofClassAcommon
stock,andifwedoso,ourcofounderscontrolcouldbefurtherprolonged.Thisconcentratedcontrolcoulddelay,defer,orpreventa
changeofcontrol,merger,consolidation,orsaleofallorsubstantiallyallofourassetsthatourotherstockholderssupport.Conversely,
thisconcentratedcontrolcouldallowourcofounderstoconsummatesuchatransactionthatourotherstockholdersdonotsupport.In
addition, our cofounders may make longterm strategic investment decisions and take risks that may not be successful and may
seriouslyharmourbusiness.
AsourCEO,Mr.Spiegelhascontroloverourdaytodaymanagementandtheimplementationofmajorstrategicinvestmentsof
our company, subject to authorization and oversight by our board of directors. As board members and officers, Mr. Spiegel and
Mr.Murphyoweafiduciarydutytoourstockholdersandmustactingoodfaithinamannertheyreasonablybelievetobeinthebest
interests of our stockholders. As stockholders, even controlling stockholders, Mr. Spiegel and Mr. Murphy are entitled to vote their
shares, and shares over which they have voting control, in their own interests, which may not always be in the interests of our
stockholdersgenerally.ForadescriptionoftherightsofourfoundersandtheClassAcommonstock,ClassBcommonstock,andClass
C common stock, see Description of Capital Stock. We do not currently intend to take advantage of the controlled company
exemptiontothecorporategovernancerulesforNYSElistedcompanies.Moreover,Mr.SpiegelandMr.Murphyhaveenteredintoa
proxyagreementunderwhicheachhasgrantedavotingproxywithrespecttoallsharesofourClassBcommonstockandClassC
commonstockthateachmaybeneficiallyownfromtimetotimeorhavevotingcontrolover.Theproxywouldbecomeeffectiveon
eitherfoundersdeathordisability.Mr.SpiegelandMr.Murphyhaveeachinitiallydesignatedtheotherastheirrespectiveproxies.
Accordingly, on the death or incapacity of either Mr. Spiegel or Mr. Murphy, the other could individually control nearly all of the
votingpowerofouroutstandingcapitalstock.
If we do not develop successful new products or improve existing ones, our business will suffer. We also invest in new lines of
businessthatcouldfailtoattractorretainusersorgeneraterevenue.
Our ability to engage, retain, and increase our user base and to increase our revenue will depend heavily on our ability to
successfully create new products, both independently and together with third parties. We may introduce significant changes to our
existingproductsordevelopandintroducenewandunprovenproducts,suchasSpectaclesorothertechnologieswithwhichwehave
littleornopriordevelopmentoroperatingexperience.Ifneworenhancedproductsfailtoengageourusers,advertisers,orpartners,we
mayfailtoattractorretainusersortogeneratesufficientrevenue,operatingmargin,orothervaluetojustifyourinvestments,anyof
whichmayseriouslyharmourbusiness.Forexample,inmid2016,welaunchedseveralproductsandreleasedmultipleupdates,which
resulted in a number of technical issues that diminished the performance of our application. We believe these performance issues
resultedinareductioningrowthofDailyActiveUsersinthelatterpartofthequarterendedSeptember30,2016.Wemayencounter
otherissuesinthefuturethatcouldimpactouruserengagement.
Because our products created new ways of communicating, they have often required users to learn new behaviors to use our
products. These new behaviors, such as swiping and tapping in the Snapchat application, are not always intuitive to users. This can
createalaginadoptionofnewproductsandnewuseradditionsrelatedtonewproducts.Todate,thishasnothinderedourusergrowth
orengagement,butthatmaybetheresultofalargeportionofouruserbasebeinginayoungerdemographicandmorewillingtoinvest
thetimetolearntouseourproductsmosteffectively.Totheextentthatfutureusers,includingthoseinolderdemographics,areless
willingtoinvestthetimetolearntouseourproducts,andifweareunabletomakeourproductseasiertolearntouse,ourusergrowth
orengagementcouldbeaffected,andourbusinesscouldbeharmed.Wemaydevelopnewproductsthatincreaseuserengagementand
costs without increasing revenue. For example, we introduced Memories, our cloud storage service for Snaps, which increases our
storagecosts.
In addition, we have invested and expect to continue to invest in new lines of business, new products, and other initiatives to
generaterevenue.ThelaunchofSpectacles,whichhasnotgeneratedsignificantrevenuefor

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us,isagoodexample.Thereisnoguaranteethatinvestinginnewlinesofbusiness,newproducts,andotherinitiativeswillsucceed.If
wedonotsuccessfullydevelopnewapproachestomonetization,wemaynotbeabletomaintainorgrowourrevenueasanticipatedor
recoveranyassociateddevelopmentcosts,andourbusinesscouldbeseriouslyharmed.
Ourbusinessishighlycompetitive.Wefacesignificantcompetitionthatweanticipatewillcontinuetointensify.Ifwearenotableto
maintainorimproveourmarketshare,ourbusinesscouldsuffer.
Wefacesignificantcompetitioninalmosteveryaspectofourbusinessbothdomesticallyandinternationally.Thisincludeslarger,
more established companies such as Apple, Facebook (including Instagram and WhatsApp), Google (including YouTube), Twitter,
Kakao,LINE,Naver(includingSnow),andTencent,whichprovidetheiruserswithavarietyofproducts,services,content,andonline
advertising offerings, and smaller companies that offer products and services that may compete with specific Snapchat features. For
example,Instagram,asubsidiaryofFacebook,recentlyintroducedastoriesfeaturethatlargelymimicsourStoriesfeatureandmay
be directly competitive. We may also lose users to small companies that offer products and services that compete with specific
Snapchatfeaturesbecauseofthelowcostforouruserstoswitchtoadifferentproductorservice.Moreover,inemerginginternational
markets, where mobile devices often lack large storage capabilities, we may compete with other applications for the limited space
availableonausersmobiledevice.Wealsofacecompetitionfromtraditionalandonlinemediabusinessesforadvertisingbudgets.We
compete broadly with the social media offerings of Apple, Facebook, Google, and Twitter, and with other, largely regional, social
mediaplatformsthathavestrongpositionsinparticularcountries.Asweintroducenewproducts,asourexistingproductsevolve,oras
othercompaniesintroducenewproductsandservices,wemaybecomesubjecttoadditionalcompetition.Forexample,inlate2016,we
launchedSpectacles,ourfirsthardwareproduct.WhileweviewSpectaclesasanextensionofSnapchat,addinghardwareproductsand
servicestoourproductportfoliosubjectsustoadditionalcompetitionandnewcompetitors.
Many of our current and potential competitors have significantly greater resources and broader global recognition and occupy
bettercompetitivepositionsincertainmarketsthanwedo.Thesefactorsmayallowourcompetitorstorespondtoneworemerging
technologiesandchangesinmarketrequirementsbetterthanwecan.Ourcompetitorsmayalsodevelopproducts,features,orservices
that are similar to ours or that achieve greater market acceptance. These products, features, and services may undertake more far
reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. In
addition, advertisers may use information that our users share through Snapchat to develop or work with competitors to develop
productsorfeaturesthatcompetewithus.Certaincompetitors,includingApple,Facebook,andGoogle,couldusestrongordominant
positionsinoneormoremarketstogaincompetitiveadvantagesagainstusinareaswhereweoperate,includingby:

integratingcompetingsocialmediaplatformsorfeaturesintoproductstheycontrolsuchassearchengines,webbrowsers,or

mobiledeviceoperatingsystems

makingacquisitionsforsimilarorcomplementaryproductsorservicesor

impeding Snapchats accessibility and usability by modifying existing hardware and software on which the Snapchat

applicationoperates.
Asaresult,ourcompetitorsmayacquireandengageusersattheexpenseofourusergrowthorengagement,whichmayseriously
harmourbusiness.
Webelievethatourabilitytocompeteeffectivelydependsonmanyfactors,manyofwhicharebeyondourcontrol,including:

theusefulness,novelty,performance,andreliabilityofourproductscomparedtoourcompetitors

thesizeanddemographicsofourDailyActiveUsers

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thetimingandmarketacceptanceofourproducts,includingdevelopmentsandenhancementsofourcompetitorsproducts

ourabilitytomonetizeourproducts

theeffectivenessofouradvertisingandsalesteams

theeffectivenessofouradvertisingproducts

ourabilitytoestablishandmaintainadvertisersandpartnersinterestinusingSnapchat

thefrequency,relativeprominence,andtypeofadvertisementsdisplayedonourapplicationorbyourcompetitors

theeffectivenessofourcustomerserviceandsupportefforts

theeffectivenessofourmarketingactivities

changes as a result of legislation, regulatory authorities, or litigation, including settlements and consent decrees, some of

whichmayhaveadisproportionateeffectonus

acquisitionsorconsolidationwithinourindustry

ourabilitytoattract,retain,andmotivatetalentedemployees,particularlyengineersandsalespersonnel

ourabilitytocosteffectivelymanageandscaleourrapidlygrowingoperationsand

ourreputationandbrandstrengthrelativetoourcompetitors.
Ifwecannoteffectivelycompete,ouruserengagementmaydecrease,whichcouldmakeuslessattractivetousers,advertisers,
andpartnersandseriouslyharmourbusiness.
Wehaveincurredoperatinglossesinthepast,expecttoincuroperatinglossesinthefuture,andmayneverachieveormaintain
profitability.
Webegancommercialoperationsin2011andforallofourhistorywehaveexperiencednetlossesandnegativecashflowsfrom
operations.AsofDecember31,2016,wehadanaccumulateddeficitof$1.2billionandfortheyearendedDecember31,2016,we
experienced a net loss of $514.6 million. We expect our operating expenses to increase in the future as we expand our operations.
Furthermore, as a public company, we will incur additional legal, accounting, and other expenses that we did not incur as a private
company.Ifourrevenuedoesnotgrowatagreaterratethanourexpenses,wewillnotbeabletoachieveandmaintainprofitability.We
mayincursignificantlossesinthefutureformanyreasons,includingwithoutlimitationtheotherrisksanduncertaintiesdescribedin
this prospectus. Additionally, we may encounter unforeseen expenses, operating delays, or other unknown factors that may result in
losses in future periods. If our expenses exceed our revenue, our business may be seriously harmed and we may never achieve or
maintainprofitability.
Thelossofoneormoreofourkeypersonnel,orourfailuretoattractandretainotherhighlyqualifiedpersonnelinthefuture,
couldseriouslyharmourbusiness.
We currently depend on the continued services and performance of our key personnel, including Evan Spiegel and Robert
Murphy.AlthoughwehaveenteredintoemploymentagreementswithMr.SpiegelandMr.Murphy,theagreementsareatwill,which
meansthattheymayresignorcouldbeterminatedforanyreasonatanytime.Mr.SpiegelandMr.Murphyarehighprofileindividuals
whohavereceivedthreatsinthepastandarelikelytocontinuetoreceivethreatsinthefuture.WhileMr.Spiegel,asCEO,hasbeen
responsibleforourcompanysstrategicvisionandMr.Murphy,asCTO,developedtheSnapchatapplicationstechnicalfoundation,
should either of them stop working for us for any reason, it is unlikely that the other cofounder would be able to fulfill the
responsibilitiesofthedepartingcofounder.Norisitlikelythatwewouldbeabletoimmediatelyfinda

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suitable replacement. The loss of key personnel, including members of management and key engineering, product development,
marketing,andsalespersonnel,coulddisruptouroperationsandseriouslyharmourbusiness.
As we continue to grow, we cannot guarantee we will continue to attract the personnel we need to maintain our competitive
position.Inparticular,weintendtohireasignificantnumberofengineeringandsalespersonnelinVenice,Californiaandsurrounding
areas,andweexpecttofacesignificantcompetitioninhiringthemanddifficultiesinattractingqualifiedpersonneltomovetotheLos
Angeles area. As we mature, the incentives to attract, retain, and motivate employees provided by our equity awards or by future
arrangements, such as through cash bonuses, may not be as effective as in the past. Additionally, we have many current employees
whose equity ownership in our company gives them a substantial amount of personal wealth. Likewise, we have many current
employeeswhoseequityawardsarefullyvestedandwillbeentitledtoreceivesubstantialamountsofourcapitalstockshortlyafterour
initialpublicoffering.Asaresult,itmaybedifficultforustocontinuetoretainandmotivatetheseemployees,andthiswealthcould
affecttheirdecisionaboutwhethertheycontinuetoworkforus.Ifwedonotsucceedinattracting,hiring,andintegratingexcellent
personnel,orretainingandmotivatingexistingpersonnel,wemaybeunabletogroweffectivelyandourbusinesscouldbeseriously
harmed.
Wehaveashortoperatinghistoryandanewbusinessmodel,whichmakesitdifficulttoevaluateourprospectsandfuturefinancial
resultsandincreasestheriskthatwewillnotbesuccessful.
We began commercial operations in 2011 and began meaningfully monetizing Snapchat in 2015. We have a short operating
history and a new business model, which makes it difficult to effectively assess our future prospects. Accordingly, we believe that
investorsfutureperceptionsandexpectations,whichcanbeidiosyncraticandvarywidely,andwhichwedonotcontrol,willaffectour
stockprice.Ourbusinessmodelisbasedonreinventingthecameratoimprovethewaythatpeopleliveandcommunicate.Youshould
considerourbusinessandprospectsinlightofthechallengesweface,includingtheonesdiscussedinthissection.
If our security is compromised or if our platform is subjected to attacks that frustrate or thwart our users ability to access our
products and services, our users, advertisers, and partners may cut back on or stop using our products and services altogether,
whichcouldseriouslyharmourbusiness.
Oureffortstoprotecttheinformationthatourusershavesharedwithusmaybeunsuccessfulduetotheactionsofthirdparties,
softwarebugs,orothertechnicalmalfunctions,employeeerrorormalfeasance,orotherfactors.Inaddition,thirdpartiesmayattemptto
fraudulently induce employees or users to disclose information to gain access to our data or our users data. If any of these events
occur, our or our users information could be accessed or disclosed improperly. We have previously suffered the loss of employee
informationrelatedtoanemployeeerror.OurPrivacyPolicygovernshowwemayuseandsharetheinformationthatourusershave
provided us. Some advertisers and partners may store information that we share with them. If these third parties fail to implement
adequatedatasecuritypracticesorfailtocomplywithourtermsandpolicies,ourusersdatamaybeimproperlyaccessedordisclosed.
Andevenifthesethirdpartiestakeallthesesteps,theirnetworksmaystillsufferabreach,whichcouldcompromiseourusersdata.
Anyincidentswhereourusersinformationisaccessedwithoutauthorization,orisimproperlyused,orincidentsthatviolateour
TermsofServiceorpolicies,coulddamageourreputationandourbrandanddiminishourcompetitiveposition.Inaddition,affected
usersorgovernmentauthoritiescouldinitiatelegalorregulatoryactionagainstusoverthoseincidents,whichcouldcauseustoincur
significantexpenseandliabilityorresultinordersorconsentdecreesforcingustomodifyourbusinesspractices.Maintainingthetrust
ofourusersisimportanttosustainourgrowth,retention,anduserengagement.Concernsoverourprivacypractices,whetheractualor
unfounded,coulddamageourreputationandbrandanddeterusers,advertisers,andpartnersfromusingourproductsandservices.Any
oftheseoccurrencescouldseriouslyharmourbusiness.
Wearealsosubjecttomanyfederal,state,andforeignlawsandregulations,includingthoserelatedtoprivacy,rightsofpublicity,
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competition,protectionofminors,consumerprotection,employment,andtaxation.Theselawsandregulationsareconstantlyevolving
andmaybeinterpreted,applied,created,oramendedinamannerthatcouldseriouslyharmourbusiness.
Inaddition,inDecember2014,theU.S.FederalTradeCommission,ortheFTC,resolvedaninvestigationintosomeofourearly
practicesbyissuingafinalorder.Thatorderrequires,amongotherthings,thatweestablisharobustprivacyprogramtogovernhowwe
treatuserdata.Duringthe20yeartermoftheorder,wemustcompletebiannualindependentprivacyaudits.Inaddition,inJune2014,
we entered into a 10year assurance of discontinuance with the Attorney General of Maryland implementing similar practices,
includingmeasurestopreventminorsundertheageof13fromcreatingaccountsandprovidingannualcompliancereports.Violating
existing or future regulatory orders or consent decrees could subject us to substantial monetary fines and other penalties that could
Ourusermetricsandotherestimatesaresubjecttoinherentchallengesinmeasurement,andrealorperceivedinaccuraciesinthose
metricsmayseriouslyharmandnegativelyaffectourreputationandourbusiness.
We regularly review metrics, including our Daily Active Users and ARPU metrics, to evaluate growth trends, measure our
performance,andmakestrategicdecisions.Thesemetricsarecalculatedusinginternalcompanydataandhavenotbeenvalidatedbyan
independent third party. While these numbers are based on what we believe to be reasonable estimates of our user base for the
applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations
globally.Forexample,webelievethatthereareindividualswhohavemultipleSnapchataccounts,eventhoughweforbidthatinour
TermsofServiceandimplementmeasurestodetectandsuppressthatbehavior.Ourusermetricsarealsoaffectedbytechnologyon
certainmobiledevicesthatautomaticallyrunsinthebackgroundofourSnapchatapplicationwhenanotherphonefunctionisused,and
thisactivitycancauseoursystemtomiscounttheusermetricsassociatedwithsuchaccount.
Someofourdemographicdatamaybeincompleteorinaccurate.Forexample,becauseusersselfreporttheirdatesofbirth,our
agedemographicdatamaydifferfromourusersactualages.AndbecauseuserswhosignedupforSnapchatbeforeJune2013were
notaskedtosupplytheirdateofbirth,weexcludethoseusersandestimatetheiragesbasedonasampleoftheselfreportedageswedo
have.IfourDailyActiveUsersprovideuswithincorrectorincompleteinformationregardingtheirageorotherattributes,thenour
estimatesmayproveinaccurateandfailtomeetinvestorexpectations.
Inthepastwehavereliedonthirdpartyanalyticsproviderstocalculateourmetrics,buttodaywerelyprimarilyonouranalytics
platformthatwedevelopedandoperate.Forexample,beforeJune2015,weusedathirdpartythatcountedaDailyActiveUserwhen
theapplicationwasopenedoranotificationwasreceivedviatheapplicationonanydevice.Wenowuseananalyticsplatformthatwe
developedandoperateandwecountaDailyActiveUseronlywhenauseropenstheapplicationandonlyonceperuserperday.We
believethismethodologymoreaccuratelymeasuresouruserengagement.Additionally,toalignourpreJune2015DailyActiveUsers
withthisnewmethodology,wereducedourpreJune2015DailyActiveUsersby4.8%,theamountbywhichweestimatedthedata
generatedbythethirdpartywasoverstated.Sincethisadjustmentisanestimate,theactualpreJune2015DailyActiveUsersmaybe
higherorlowerthanourreportednumbers.Asaresult,ourmetricsmaynotbecomparabletopriorperiods.
Errors or inaccuracies in our metrics or data could result in incorrect business decisions and inefficiencies. For instance, if a
significantunderstatementoroverstatementofDailyActiveUsersweretooccur,wemayexpendresourcestoimplementunnecessary
businessmeasuresorfailtotakerequiredactionstoattractasufficientnumberofuserstosatisfyourgrowthstrategies.Ifadvertisers,
partners, or investors do not perceive our user, geographic, or other demographic metrics to be accurate representations of our user
base,orifwediscovermaterialinaccuraciesinouruser,geographic,orotherdemographicmetrics,ourreputationmaybeseriously
harmed.Andatthesametime,advertisersandpartnersmaybelesswillingtoallocatetheirbudgetsor

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resources to Snapchat, which could seriously harm our business. In addition, we measure our Daily Active Users by calculating the
daily average of users across the quarter. This calculation may mask any individual months within the quarter that are significantly
higherorlowerthantheaverage.Forexample,althoughDailyActiveUsersgrewby7%from143millionDailyActiveUsersforthe
quarterendedJune30,2016to153millionDailyActiveUsersforthequarterendedSeptember30,2016,thegrowthinDailyActive
UserswasrelativelyflatinthelatterpartofthequarterendedSeptember30,2016.
Mobilemalware,viruses,hackingandphishingattacks,spamming,andimproperorillegaluseofSnapchatcouldseriouslyharm
ourbusinessandreputation.
Mobile malware, viruses, hacking, and phishing attacks have become more prevalent in our industry, have occurred on our
systemsinthepast,andmayoccuronoursystemsinthefuture.Becauseofourprominence,webelievethatweareanattractivetarget
forthesesortsofattacks.Althoughitisdifficulttodeterminewhat,ifany,harmmaydirectlyresultfromaninterruptionorattack,any
failuretomaintainperformance,reliability,security,andavailabilityofourproductsandtechnicalinfrastructuretothesatisfactionof
ourusersmayseriouslyharmourreputationandourabilitytoretainexistingusersandattractnewusers.
Inaddition,spammersattempttouseourproductstosendtargetedanduntargetedspammessagestousers,whichmayembarrass
orannoyusersandmakeourproductslessuserfriendly.Wecannotbecertainthatthetechnologiesthatwehavedevelopedtorepel
spamming attacks will be able to eliminate all spam messages from our products. Our actions to combat spam may also require
diversionofsignificanttimeandfocusofourengineeringteamfromimprovingourproducts.Asaresultofspammingactivities,our
usersmayuseourproductslessorstopusingthemaltogether,andresultincontinuingoperationalcosttous.
Similarly,terrorandothercriminalgroupsmayuseourproductstopromotetheirgoalsandencourageuserstoengageinterror
andotherillegalactivities.Weexpectthatasmorepeopleuseourproducts,thesegroupswillincreasinglyseektomisuseourproducts.
Althoughweinvestresourcestocombattheseactivities,includingbysuspendingorterminatingaccountswebelieveareviolatingour
TermsofServiceandCommunityGuidelines,weexpectthesegroupswillcontinuetoseekwaystoactinappropriatelyandillegallyon
Snapchat.Combatingthesegroupsrequiresourengineeringteamtodivertsignificanttimeandfocusfromimprovingourproducts.In
addition,wemaynotbeabletocontrolorstopSnapchatfrombecomingthepreferredapplicationofusebythesegroups,whichmay
becomepublicknowledgeandseriouslyharmourreputationorleadtolawsuitsorattentionfromregulators.Iftheseactivitiesincrease
onSnapchat,ourreputation,usergrowthanduserengagement,andoperationalcoststructurecouldbeseriouslyharmed.
Because we store, process, and use data, some of which contains personal information, we are subject to complex and evolving
federal, state, and foreign laws and regulations regarding privacy, data protection, and other matters. Many of these laws and
regulationsaresubjecttochangeanduncertaininterpretation,andcouldresultininvestigations,claims,changestoourbusiness
practices,increasedcostofoperations,anddeclinesinusergrowth,retention,orengagement,anyofwhichcouldseriouslyharm
ourbusiness.
We are subject to a variety of laws and regulations in the United States and other countries that involve matters central to our
business,includinguserprivacy,rightsofpublicity,dataprotection,content,intellectualproperty,distribution,electroniccontractsand
othercommunications,competition,protectionofminors,consumerprotection,taxation,andonlinepaymentservices.Theselawscan
be particularly restrictive in countries outside the United States. Both in the United States and abroad, these laws and regulations
constantlyevolveandremainsubjecttosignificantchange.Inaddition,theapplicationandinterpretationoftheselawsandregulations
areoftenuncertain,particularlyinthenewandrapidlyevolvingindustryinwhichweoperate.Becausewestore,process,andusedata,
someofwhichcontainspersonalinformation,wearesubjecttocomplexandevolvingfederal,state,andforeignlawsandregulations
regarding privacy, data protection, and other matters. Many of these laws and regulations are subject to change and uncertain
interpretation,andcouldresultininvestigations,claims,changestoourbusinesspractices,increasedcostofoperations,anddeclinesin
usergrowth,retention,orengagement,anyofwhichcouldseriouslyharmourbusiness.

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Severalproposalsarependingbeforefederal,state,andforeignlegislativeandregulatorybodiesthatcouldsignificantlyaffectour
business. For example, a revision to the 1995 European Union Data Protection Directive is currently being considered by European
legislative bodies that may include more stringent operational requirements for data processors and significant penalties for non
compliance.Inaddition,theGeneralDataProtectionRegulationintheEuropeanUnion,whichwillgointoeffectonMay25,2018,
mayrequireustochangeourpoliciesandproceduresand,ifwearenotcompliant,mayseriouslyharmourbusiness.
Ourfinancialconditionandresultsofoperationswillfluctuatefromquartertoquarter,whichmakesthemdifficulttopredict.
Our quarterly results of operations have fluctuated in the past and will fluctuate in the future. Additionally, we have a limited
operatinghistorywiththecurrentscaleofourbusiness,whichmakesitdifficulttoforecastourfutureresults.Asaresult,youshould
not rely on our past quarterly results of operations as indicators of future performance. You should take into account the risks and
uncertaintiesfrequentlyencounteredbycompaniesinrapidlyevolvingmarkets.Ourfinancialconditionandresultsofoperationsinany
givenquartercanbeinfluencedbynumerousfactors,manyofwhichweareunabletopredictorareoutsideofourcontrol,including:

ourabilitytomaintainandgrowouruserbaseanduserengagement

thedevelopmentandintroductionofnewproductsorservices,suchasSpectacles,byusorourcompetitors

theabilityofourdataserviceproviderstoscaleeffectivelyandtimelyprovidethenecessarytechnicalinfrastructuretooffer

ourservice

ourabilitytoattractandretainadvertisersinaparticularperiod

seasonal fluctuations in spending by our advertisers and product usage by our users, each of which may change as our

productofferingsevolveorasourbusinessgrows

thenumberofadvertisementsshowntousers

thepricingofouradvertisementsandotherproducts

ourabilitytodemonstratetoadvertiserstheeffectivenessofouradvertisements

thediversificationandgrowthofrevenuesourcesbeyondcurrentadvertising

increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to

remaincompetitive

ourabilitytomaintaingrossmarginsandoperatingmargins

systemfailuresorbreachesofsecurityorprivacy

inaccessibilityofSnapchatduetothirdpartyactions

stockbasedcompensationexpense,includingapproximately$millionthatwewillincurinthequarterofourinitial
publicofferinginconnectionwiththevestingofRSUsforwhichtheservicebasedconditionwassatisfiedasofthedateof

ourinitialpublicoffering(assuminganinitialpublicofferingpriceof$pershare,themidpointoftheestimatedprice
rangesetforthonthecoverpageofthisprospectus)

adverselitigationjudgments,settlements,orotherlitigationrelatedcosts

changes in the legislative or regulatory environment, including with respect to privacy, or enforcement by government

regulators,includingfines,orders,orconsentdecrees

fluctuationsincurrencyexchangeratesandchangesintheproportionofourrevenueandexpensesdenominatedinforeign

currencies

fluctuationsinthemarketvaluesofourportfolioinvestmentsandinterestrates

changesinoureffectivetaxrate

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announcementsbycompetitorsofsignificantnewproductsoracquisitions

ourabilitytomakeaccurateaccountingestimatesandappropriatelyrecognizerevenueforourproductsforwhichthereare

norelevantcomparableproducts

changesinaccountingstandards,policies,guidance,interpretations,orprinciplesand

changesinbusinessormacroeconomicconditions.
Ifweareunabletosuccessfullygrowouruserbaseandfurthermonetizeourproducts,ourbusinesswillsuffer.
Wehavemade,andarecontinuingtomake,investmentstoenableusersandadvertiserstocreatecompellingcontentanddeliver
advertisingtoourusers.ExistingandprospectiveSnapchatusersandadvertisersmaynotbesuccessfulincreatingcontentthatleadsto
andmaintainsuserengagement.Wearecontinuouslyseekingtobalancetheobjectivesofourusersandadvertiserswithourdesireto
provide an optimal user experience. We do not seek to monetize all of our products and we may not be successful in achieving a
balancethatcontinuestoattractandretainusersandadvertisers.Ifwearenotsuccessfulinoureffortstogrowouruserbaseorifwe
areunabletobuildandmaintaingoodrelationswithouradvertisers,ourusergrowthanduserengagementandourbusinessmaybe
seriouslyharmed.Inaddition,wemayexpendsignificantresourcestolaunchnewproductsthatweareunabletomonetize,whichmay
Additionally, we may not succeed in further monetizing Snapchat. We currently monetize Snapchat by displaying in the
applicationadvertisementsthatwesellandadvertisementssoldbyourpartners.Asaresult,ourfinancialperformanceandabilityto
growrevenuecouldbeseriouslyharmedif:

wefailtoincreaseormaintainDailyActiveUsers

we fail to increase or maintain the amount of time spent on Snapchat or usage of our Creative Tools, Chat Service, or

StorytellingPlatform

partnersdonotcreateengagingcontentforusersorrenewtheiragreementswithus

advertisersdonotcontinuetointroduceengagingadvertisements

advertisersreducetheiradvertisingonSnapchat

wefailtomaintaingoodrelationshipswithadvertisersorattractnewadvertisersor

thecontentonSnapchatdoesnotmaintainorgainpopularity.
Wecannotassureyouthatwewilleffectivelymanageourgrowth.
Ouremployeeheadcountandthescopeandcomplexityofourbusinesshaveincreasedsignificantly,withthenumberoffulltime
employeesincreasingfrom600asofDecember31,2015to1,859asofDecember31,2016.Weexpectheadcountgrowthtocontinue
fortheforeseeablefuture.Thegrowthandexpansionofourbusinessandproductscreatesignificantchallengesforourmanagement,
including managing multiple relationships with users, advertisers, partners, and other third parties, and constrain operational and
financialresources.Ifouroperationsorthenumberofthirdpartyrelationshipscontinuestogrow,ourinformationtechnologysystems
andourinternalcontrolsandproceduresmaynotadequatelysupportouroperations.Inaddition,somemembersofourmanagementdo
nothavesignificantexperiencemanaginglargeglobalbusinessoperations,soourmanagementmaynotbeabletomanagesuchgrowth
effectively.Toeffectivelymanageourgrowth,wemustcontinuetoimproveouroperational,financial,andmanagementprocessesand
systemsandeffectivelyexpand,train,andmanageouremployeebase.
Asourorganizationcontinuestogrowandwearerequiredtoimplementmorecomplexorganizationalmanagementstructures,we
may also find it increasingly difficult to maintain the benefits of our corporate culture, including our ability to quickly develop and
launchnewandinnovativeproducts.Thiscouldnegativelyaffectourbusinessperformanceandseriouslyharmourbusiness.

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Ourcostsaregrowingrapidly,whichcouldseriouslyharmourbusinessorincreaseourlosses.
Providingourproductstoourusersiscostly,andweexpectourexpenses,includingthoserelatedtopeopleandhosting,togrow
inthefuture.Thisexpensegrowthwillcontinueaswebroadenouruserbase,asusersincreasethenumberofconnectionsandamount
ofcontenttheyconsumeandshare,aswedevelopandimplementnewproductfeaturesthatrequiremorecomputinginfrastructure,and
aswehireadditionalemployeesatarapidpacetosupportpotentialfuturegrowth.Historically,ourcostshaveincreasedeachyeardue
tothesefactors,andweexpecttocontinuetoincurincreasingcosts.Ourcostsarebasedondevelopmentandreleaseofnewproducts
andtheadditionofusersandmaynotbeoffsetbyacorrespondinggrowthofourrevenue.Weexpecttocontinuetoinvestinourglobal
infrastructuretoprovideourproductsquicklyandreliablytoallusersaroundtheworld,includingincountrieswherewedonotexpect
significantshorttermmonetization,ifany.Ourexpensesmaybegreaterthanweanticipate,andourinvestmentstomakeourbusiness
and our technical infrastructure more efficient may not succeed and may outpace monetization efforts. In addition, we expect to
increasemarketing,sales,andotheroperatingexpensestogrowandexpandouroperationsandtoremaincompetitive.Increasesinour
costswithoutacorrespondingincreaseinourrevenuewouldincreaseourlossesandcouldseriouslyharmourbusiness.
Ourbusinessdependsonourabilitytomaintainandscaleourtechnologyinfrastructure.Anysignificantdisruptiontoourservice
coulddamageourreputation,resultinapotentiallossofusersanddecreaseinuserengagement,andseriouslyharmourbusiness.
Ourreputationandabilitytoattract,retain,andserveusersdependsonthereliableperformanceofSnapchatandourunderlying
technology infrastructure. Our systems may not be adequately designed with the necessary reliability and redundancy to avoid
performancedelaysoroutagesthatcouldseriouslyharmourbusiness.IfSnapchatisunavailablewhenusersattempttoaccessit,orifit
does not load as quickly as they expect, users may not return to Snapchat as often in the future, or at all. As our user base and the
volumeandtypesofinformationsharedonSnapchatcontinuetogrow,wewillneedanincreasingamountoftechnologyinfrastructure,
includingnetworkcapacityandcomputingpower,tocontinuetosatisfyourusersneeds.Itispossiblethatwemayfailtoeffectively
scale and grow our technology infrastructure to accommodate these increased demands. In addition, our business is subject to
interruptions,delays,andfailuresresultingfromearthquakes,othernaturaldisasters,terrorism,andothercatastrophicevents.
Asubstantialportionofournetworkinfrastructureisprovidedbythirdparties.Anydisruptionorfailureintheserviceswereceive
fromtheseproviderscouldharmourabilitytohandleexistingorincreasedtrafficandcouldseriouslyharmourbusiness.Anyfinancial
orotherdifficultiestheseprovidersfacemayseriouslyharmourbusiness.Andbecauseweexerciselittlecontrolovertheseproviders,
wearevulnerabletoproblemswiththeservicestheyprovide.
Ourbusinessemphasizesrapidinnovationandprioritizeslongtermuserengagementovershorttermfinancialconditionorresults
ofoperations.Thatstrategymayyieldresultsthatsometimesdontalignwiththemarketsexpectations.Ifthathappens,ourstock
pricemaybenegativelyaffected.
Ourbusinessisgrowingandbecomingmorecomplex,andoursuccessdependsonourabilitytoquicklydevelopandlaunchnew
and innovative products. We believe our culture fosters this goal. Our focus on complexity and quick reactions could result in
unintendedoutcomesordecisionsthatarepoorlyreceivedbyourusers,advertisers,orpartners.Forexample,wemade,andexpectto
continuetomake,significantinvestmentstodevelopandlaunchSpectaclesandwearenotyetabletodeterminewhetheruserswill
purchaseoruseSpectaclesinthefuture.Ourculturealsoprioritizesourlongtermuserengagementovershorttermfinancialcondition
orresultsofoperations.Wefrequentlymakedecisionsthatmayreduceourshorttermrevenueorprofitabilityifwebelievethatthe
decisionsbenefittheaggregateuserexperienceandwilltherebyimproveourfinancialperformanceoverthelongterm.Forexample,
wemonitorhowadvertisingonSnapchataffectsourusersexperiencestoensurewedonotdelivertoomanyadvertisementstoour
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decrease the number of advertisements to ensure our users satisfaction in the product. In addition, we improve Snapchat based on
feedbackprovidedbyourusersandpartners.Thesedecisionsmaynotproducethelongtermbenefitsthatweexpect,inwhichcaseour
usergrowthandengagement,ourrelationshipswithadvertisersandpartners,andourbusinesscouldbeseriouslyharmed.
Ifweareunabletoprotectourintellectualproperty,thevalueofourbrandandotherintangibleassetsmaybediminished,andour
businessmaybeseriouslyharmed.Ifweneedtolicenseoracquirenewintellectualproperty,wemayincursubstantialcosts.
We aim to protect our confidential proprietary information, in part, by entering into confidentiality agreements and invention
assignmentagreementswithallouremployees,consultants,advisors,andanythirdpartieswhoaccessorcontributetoourproprietary
knowhow,information,ortechnology.Wealsorelyontrademark,copyright,patent,tradesecret,anddomainnameprotectionlawsto
protect our proprietary rights. In the United States and internationally, we have filed various applications to protect aspects of our
intellectualproperty,andwecurrentlyholdanumberofissuedpatentsinmultiplejurisdictions.Inthefuturewemayacquireadditional
patentsorpatentportfolios,whichcouldrequiresignificantcashexpenditures.However,thirdpartiesmayknowinglyorunknowingly
infringeourproprietaryrights,thirdpartiesmaychallengeproprietaryrightsheldbyus,andpendingandfuturetrademarkandpatent
applicationsmaynotbeapproved.Inaddition,effectiveintellectualpropertyprotectionmaynotbeavailableineverycountryinwhich
we operate or intend to operate our business. In any of these cases, we may be required to expend significant time and expense to
prevent infringement or to enforce our rights. Although we have taken measures to protect our proprietary rights, there can be no
assurance that others will not offer products or concepts that are substantially similar to ours and compete with our business. In
addition, we regularly contribute software source code under opensource licenses and have made other technology we developed
availableunderotheropenlicenses,andweincludeopensourcesoftwareinourproducts.Fromtimetotime,wemayfaceclaimsfrom
third parties claiming ownership of, or demanding release of, the opensource software or derivative works that we have developed
usingsuchsoftware,whichcouldincludeourproprietarysourcecode,orotherwiseseekingtoenforcethetermsoftheapplicableopen
source license. These claims could result in litigation and could require us to make our software source code freely available, seek
licenses from third parties to continue offering our products for certain uses, or cease offering the products associated with such
softwareunlessanduntilwecanreengineerthemtoavoidinfringement,whichmaybeverycostly.Ifweareunabletoprotectour
proprietaryrightsorpreventunauthorizeduseorappropriationbythirdparties,thevalueofourbrandandotherintangibleassetsmay
be diminished, and competitors may be able to more effectively mimic our service and methods of operations. Any of these events
If our users do not continue to contribute content or their contributions are not perceived as valuable to other users, we may
experience a decline in user growth, retention, and engagement on Snapchat, which could result in the loss of advertisers and
revenue.
Our success depends on our ability to provide Snapchat users with engaging content, which in part depends on the content
contributed by our users. If users, including influential users such as world leaders, government officials, celebrities, athletes,
journalists, sports teams, media outlets, and brands, do not continue to contribute engaging content to Snapchat, our user growth,
retention, and engagement may decline. That, in turn, may impair our ability to maintain good relationships with our advertisers or
attractnewadvertisers,whichmayseriouslyharmourbusinessandfinancialperformance.
ForeigngovernmentinitiativestorestrictaccesstoSnapchatintheircountriescouldseriouslyharmourbusiness.
Foreigndataprotection,privacy,consumerprotection,contentregulation,andotherlawsandregulationsareoftenmorerestrictive
than those in the United States. Foreign governments may censor Snapchat in their countries, restrict access to Snapchat from their
countriesentirely,orimposeotherrestrictionsthatmayaffect

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their citizens ability to access Snapchat for an extended period of time or even indefinitely. If foreign governments think we are
violatingtheirlaws,orforotherreasons,theymayseektorestrictaccesstoSnapchat,whichwouldgiveourcompetitorsanopportunity
to penetrate geographic markets that we cannot access. As a result, our user growth, retention, and engagement may be seriously
harmed, and we may not be able to maintain or grow our revenue as anticipated and our business could be seriously harmed. For
example,accesstoGoogle,whichcurrentlypowersourinfrastructure,isrestrictedinChina,andwedonotknowifwewillbeableto
enterthemarketinamanneracceptabletotheChinesegovernment.
Our users may increasingly engage directly with our partners instead of through Snapchat, which may negatively affect our
advertisingrevenueandseriouslyharmourbusiness.
WeallowpartnerstodisplaytheiradvertisementsonSnapchat.Usingourproducts,somepartnersnotonlycaninteractdirectly
withourusers,butcanalsodirectouruserstocontentonthepartnerswebsitedirectly.Whenusersvisitapartnerswebsite,wedonot
deliver advertisements to these websites. So, if our partners websites draw users away from Snapchat, the sort of user activity that
generates advertising opportunities may decline, which could negatively affect our advertising revenue. Although we believe that
SnapchatreapssignificantlongtermbenefitsfromincreaseduserengagementoncontentonSnapchatprovidedbyourpartners,these
benefitsmaynotoffsetthepossiblelossofadvertisingrevenue,inwhichcaseourbusinesscouldbeseriouslyharmed.
If events occur that damage our reputation and brand, our ability to expand our user base, advertisers, and partners may be
impaired,andourbusinessmaybeseriouslyharmed.
Wehavedevelopedabrandthatwebelievehascontributedtooursuccess.Wealsobelievethatmaintainingandenhancingour
brand is critical to expanding our user base, advertisers, and partners. Because many of our users join Snapchat on the invitation or
recommendationofafriendorfamilymember,oneofourprimaryfocusesisonensuringthatouruserscontinuetoviewSnapchatand
ourbrandfavorablysothatthesereferralscontinue.Maintainingandenhancingourbrandwilldependlargelyonourabilitytocontinue
toprovideuseful,novel,fun,reliable,trustworthy,andinnovativeproducts,whichwemaynotdosuccessfully.Wemayintroducenew
productsorrequireouruserstoagreetonewtermsofservicerelatedtonewandexistingproductsthatusersdonotlike,whichmay
negativelyaffectourbrand.Additionally,ourpartnersactionsmayaffectourbrandifusersdonotappreciatewhatthosepartnersdoon
Snapchat. In the past, we have experienced, and we expect that in the future we will continue to experience, media, legislative, and
regulatoryscrutinyofourdecisionsregardinguserprivacyorotherissues,whichmayseriouslyharmourreputationandbrand.Wemay
alsofailtoadequatelysupporttheneedsofourusers,advertisers,orpartners,whichcoulderodeconfidenceinourbrand.Maintaining
andenhancingourbrandmayrequireustomakesubstantialinvestmentsandtheseinvestmentsmaynotbesuccessful.Ifwefailto
successfullypromoteandmaintainourbrandorifweincurexcessiveexpensesinthiseffort,ourbusinessmaybeseriouslyharmed.
Unfavorablemediacoveragecouldseriouslyharmourbusiness.
We and our founders receive a high degree of media coverage globally. Unfavorable publicity regarding us, for example, our
privacy practices, product changes, product quality, litigation, or regulatory activity, or regarding the actions of our partners or our
users,couldseriouslyharmourreputation.Suchnegativepublicitycouldalsoadverselyaffectthesize,demographics,engagement,and
loyaltyofouruserbaseandresultindecreasedrevenueorslowerusergrowthrates,whichcouldseriouslyharmourbusiness.

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If we are not successful in expanding and operating our business in international markets, we may need to lay off employees in
thosemarkets,whichmayseriouslyharmourreputationandbusiness.
We have rapidly expanded to new international markets, including areas where we do not yet understand the full scope of
commerce and culture. In connection with this rapid international expansion we have also hired new employees in many of these
markets.Thisrapidexpansionmay:

impedeourabilitytocontinuouslymonitortheperformanceofourinternationalemployees

resultinhiringofemployeeswhomaynotyetfullyunderstandourbusiness,products,andcultureand

causeustoexpandinmarketsthatmaylackthecultureandinfrastructureneededtoadoptourproducts.
These issues may eventually lead to layoffs of employees in these markets and may harm our ability to grow our business in these
markets.
WeanticipatespendingsubstantialfundsinconnectionwiththetaxliabilitiesontheinitialsettlementofRSUsinconnectionwith
thisoffering.Themannerinwhichwefundthesetaxliabilitiesmayhaveanadverseeffectonourfinancialcondition.
GiventhelargenumberofRSUsthatwillinitiallysettleinconnectionwithourinitialpublicoffering,weanticipatethatwewill
expendsubstantialfundstosatisfytaxwithholdingandremittanceobligationsontheeffectivedateofourregistrationstatement.Onthe
settlement date, we plan to withhold and remit income taxes at applicable statutory rates based on the thencurrent value of the
underlyingshares.Wecurrentlyexpectthattheaverageofthesewithholdingtaxrateswillbeapproximately47%.Ifthepriceofour
common stock at the time of settlement were equal to $16.33 per share, which is the fair value of our common stock as of
December31,2016,weestimatethatthistaxobligationwouldbeapproximately$187.2millionintheaggregate.TosettletheseRSUs,
assuming an approximate 47% tax withholding rate, we anticipate that we will netsettle the awards by delivering an aggregate of
approximately13.2millionsharesofClassAcommonstockandClassBcommonstocktoRSUholdersandwithholdinganaggregate
of approximately 11.5 million shares of Class A common stock and Class B common stock, based on RSUs outstanding as of
December31,2016forwhichtheservicebasedrequirementwassatisfiedonthatday.Inconnectionwiththesenetsettlements,wewill
withholdandremitthetaxliabilitiesonbehalfoftheRSUholdersincashtotheapplicabletaxauthorities.
Tofundthewithholdingandremittanceobligations,wemaysellequitysecuritiesneartheinitialsettlementdateinanamountthat
issubstantiallyequivalenttothenumberofsharesofcommonstockthatwewithholdinconnectionwiththesenetsettlements,such
thatthenewlyissuedsharesshouldnotbedilutive.However,intheeventthatweissueequitysecurities,wecannotassureyouthatwe
willbeabletosuccessfullymatchtheproceedstotheamountofthistaxliability.Inaddition,anysuchequityfinancingcouldresultina
declineinourstockprice.Ifweelectnottofullyfundtaxwithholdingandremittanceobligationsthroughtheissuanceofequityorwe
areunabletocompletesuchanofferingduetomarketconditionsorotherwise,wemaychoosetoborrowfundsunderourcreditfacility,
useasubstantialportionofourexistingcash,includingfundsraisedinthisoffering,orrelyonacombinationofthesealternatives.In
theeventthatweelecttosatisfytaxwithholdingandremittanceobligationsinwholeorinpartbydrawingonourcreditfacility,our
interestexpenseandprincipalrepaymentrequirementscouldincreasesignificantly,whichcouldhaveanadverseeffectonourfinancial
conditionorresultsofoperations.
Ourproductsarehighlytechnicalandmaycontainundetectedsoftwarebugsorhardwareerrors,whichcouldmanifestinwaysthat
couldseriouslyharmourreputationandourbusiness.
Ourproductsarehighlytechnicalandcomplex.SnapchatandSpectacles,oranyotherproductswemayintroduceinthefuture,
maycontainundetectedsoftwarebugs,hardwareerrors,andothervulnerabilities.These

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bugs and errors can manifest in any number of ways in our products, including through diminished performance, security
vulnerabilities, malfunctions, or even permanently disabled products. We have a practice of rapidly updating our products and some
errorsinourproductsmaybediscoveredonlyafteraproducthasbeenshippedandusedbyusers,andmayinsomecasesbedetected
only under certain circumstances or after extended use. Spectacles, as an eyewear product, is regulated by the U.S. Food and Drug
Administration,ortheFDA,andmaymalfunctioninawaythatphysicallyharmsauser.Weofferalimitedoneyearwarrantyinthe
UnitedStatesandanysuchdefectsdiscoveredinourproductsaftercommercialreleasecouldresultinalossofsalesandusers,which
could seriously harm our business. Any errors, bugs, or vulnerabilities discovered in our code after release could damage our
reputation,driveawayusers,lowerrevenue,andexposeustodamagesclaims,anyofwhichcouldseriouslyharmourbusiness.
Wecouldalsofaceclaimsforproductliability,tort,orbreachofwarranty.Inaddition,ourproductcontractswithuserscontain
provisionsrelatingtowarrantydisclaimersandliabilitylimitations,whichmaynotbeupheld.Defendingalawsuit,regardlessofits
merit,iscostlyandmaydivertmanagementsattentionandseriouslyharmourreputationandourbusiness.Inaddition,ifourliability
insurancecoverageprovesinadequateorfuturecoverageisunavailableonacceptabletermsoratall,ourbusinesscouldbeseriously
harmed.
Asourbusinessexpands,wemayoffercredittoourpartnerstostaycompetitive,andasaresultwemaybeexposedtocreditriskof
someofourpartners,whichmayseriouslyharmourbusiness.
Asourbusinesscontinuestogrowandexpand,wemaydecidetoengageinbusinesswithsomeofourpartnersonanopencredit
basis.Whilewemaymonitorindividualpartnerpaymentcapabilitywhenwegrantopencreditarrangementsandmaintainallowances
we believe are adequate to cover exposure for doubtful accounts, we cannot assure investors these programs will be effective in
managingourcreditrisksinthefuture,especiallyasweexpandourbusinessinternationallyandengagewithpartnersthatwemaynot
befamiliarwith.Ifweareunabletoadequatelycontroltheserisks,ourbusinesscouldbeseriouslyharmed.
We may be subject to regulatory investigations and proceedings in the future, which could cause us to incur substantial costs or
requireustochangeourbusinesspracticesinawaythatcouldseriouslyharmourbusiness.
Itispossiblethataregulatoryinquirymightforceustochangeourpoliciesorpractices.Andwerewetoviolateexistingorfuture
regulatory orders or consent decrees, we might incur substantial monetary fines and other penalties that could seriously harm our
business.Inaddition,itispossiblethatfutureordersissuedby,orenforcementactionsinitiatedby,regulatoryauthoritiescouldcauseus
toincursubstantialcostsorrequireustochangeourbusinesspracticesinawaythatcouldseriouslyharmourbusiness.
Forexample,inDecember2014,theFTCresolvedaninvestigationintosomeofourearlypracticesbyissuingafinalorder.That
orderrequires,amongotherthings,thatweestablisharobustprivacyprogramtogovernhowwetreatuserdata.Duringthe20year
term of the order, we must complete biannual independent privacy audits. In addition, in June 2014, we entered into a 10year
assurance of discontinuance with the Attorney General of Maryland implementing similar practices, including measures to prevent
minors under the age of 13 from creating accounts and providing annual compliance reports.Violating existing or future regulatory
orders or consent decrees could subject us to substantial monetary fines and other penalties that could seriously harm our business.
Similarly,wemaybesubjecttoadditionalgeneralinquiriesfromtimetotime,whichmayseriouslyharmourbusiness.
Wearecurrently,andexpecttobeinthefuture,partytopatentlawsuitsandotherintellectualpropertyclaimsthatareexpensive
andtimeconsuming.Ifresolvedadversely,lawsuitsandclaimscouldseriouslyharmourbusiness.
Companiesinthemobile,camera,communication,media,internet,andothertechnologyrelatedindustriesownlargenumbersof
patents,copyrights,trademarks,tradesecrets,andotherintellectualpropertyrights,and

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frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or
otherrights.Inaddition,variousnonpracticingentitiesthatownpatents,copyrights,trademarks,tradesecrets,andotherintellectual
propertyrightsoftenattempttoaggressivelyasserttheirrightstoextractvaluefromtechnologycompanies.Furthermore,fromtimeto
timewemayintroducenewproductsormakeotherbusinesschanges,includinginareaswherewecurrentlydonotcompete,which
couldincreaseourexposuretopatent,copyright,trademark,tradesecret,andotherintellectualpropertyrightsclaimsfromcompetitors
andnonpracticingentities.Fromtimetotime,wereceivelettersfrompatentholdersallegingthatsomeofourproductsinfringetheir
patentrightsandfromtrademarkholdersalleginginfringementoftheirtrademarkrights.Wehavebeensubjecttolitigationwithrespect
to thirdparty patents, trademarks, and other intellectual property and we expect to continue to be subject to intellectual property
litigation.
We rely on a variety of statutory and commonlaw frameworks for the content we provide our users, including the Digital
MillenniumCopyrightAct,orDMCA,theCommunicationsDecencyAct,orCDA,andthefairusedoctrine.TheDMCAlimits,but
does not necessarily eliminate, our potential liability for caching, hosting, listing, or linking to thirdparty content that may include
materialsthatinfringecopyrightsorotherrights.TheCDAfurtherlimitsourpotentialliabilityforcontentuploadedontoSnapchatby
thirdparties.Andthefairusedoctrine(andrelateddoctrinesinothercountries)limitsourpotentialliabilityforfeaturingthirdparty
intellectualpropertycontentproducedbySnapInc.forpurposessuchasreporting,commentary,andparody.However,eachofthese
statutesanddoctrinesissubjecttouncertainjudicialinterpretationandregulatoryandlegislativeamendments.Moreover,someofthem
provideprotectiononlyorprimarilyintheUnitedStates.Iftherulesaroundthesedoctrineschange,ifinternationaljurisdictionsrefuse
toapplysimilarprotections,orifacourtweretodisagreewithourapplicationofthoserulestoourservice,wecouldincurliabilityand
ourbusinesscouldbeseriouslyharmed.
Fromtimetotime,weareinvolvedinclassactionlawsuitsandotherlitigationmattersthatareexpensiveandtimeconsuming.If
resolvedadversely,lawsuitsandotherlitigationmatterscouldseriouslyharmourbusiness.
Weareinvolvedinnumerouslawsuits,includingputativeclassactionlawsuitsbroughtbyusers,manyofwhichclaimstatutory
damages.Weanticipatethatwewillcontinuetobeatargetforlawsuitsinthefuture.Becausewehavemillionsofusers,theplaintiffs
inclassactioncasesfiledagainstustypicallyclaimenormousmonetarydamagesintheaggregateeveniftheallegedperuserharmis
smallornonexistent.Anylitigationtowhichweareapartymayresultinanonerousorunfavorablejudgmentthatmaynotbereversed
onappeal,orwemaydecidetosettlelawsuitsonsimilarlyunfavorableterms.Anysuchnegativeoutcomecouldresultinpaymentsof
substantial monetary damages or fines, or changes to our products or business practices, and accordingly our business could be
seriously harmed. Although the results of lawsuits and claims cannot be predicted with certainty, we do not believe that the final
outcomeofthosemattersthatwecurrentlyfacewillseriouslyharmourbusiness.However,defendingtheseclaimsiscostlyandcan
imposeasignificantburdenonmanagementandemployees,andwemayreceiveunfavorablepreliminary,interim,orfinalrulingsin
thecourseoflitigation,whichcouldseriouslyharmourbusiness.
We do not have manufacturing capabilities and depend on a single contract manufacturer. If we encounter problems with this
contract manufacturer or if the manufacturing process stops or is delayed for any reason, we may not deliver our hardware
products,suchasSpectacles,toourcustomersontime,whichmayseriouslyharmourbusiness.
We have limited manufacturing experience for our only physical product, Spectacles, and we do not have any internal
manufacturingcapabilities.Instead,werelyononecontractmanufacturertobuildSpectacles.Ourcontractmanufacturerisvulnerable
tocapacityconstraintsandreducedcomponentavailability,andourcontroloverdeliveryschedules,manufacturingyields,andcosts,
particularlywhencomponentsareinshortsupply,orifweintroduceanewproductorfeature,islimited.Inaddition,wehavelimited
controloverourmanufacturersqualitysystemsandcontrols,andthereforemustrelyonourmanufacturertomanufactureourproducts
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quality and performance standards and specifications. Delays, component shortages, including custom components that are
manufacturedforusatourdirection,andothermanufacturingandsupplyproblemscouldimpairthedistributionofourproductsand
ultimatelyourbrand.Furthermore,anyadversechangeinourcontractmanufacturersfinancialorbusinessconditioncoulddisruptour
abilitytosupplyourproductstoourretailersanddistributors.Ifwearerequiredtochangeourcontractmanufacturerorassumeinternal
manufacturingoperations,wemayloserevenue,incurincreasedcosts,anddamageourreputationandbrand.Qualifyinganewcontract
manufacturerandcommencingproductionisexpensiveandtimeconsuming.Inaddition,ifweexperienceincreaseddemandforour
products,wemayneedtoincreaseourcomponentpurchases,contractmanufacturingcapacityandinternaltestandqualityfunctions.
The inability of our contract manufacturers to provide us with adequate supplies of highquality products could delay our order
fulfillment,andmayrequireustochangethedesignofourproductstomeetthisincreaseddemand.Anyredesignwouldrequireusto
requalifyourproductswithanyapplicableregulatorybodies,whichwouldbecostlyandtimeconsuming.Thismayleadtounsatisfied
customersandusersandincreasecoststous,whichcouldseriouslyharmourbusiness.
Componentsusedinourproductsmayfailasaresultofamanufacturing,design,orotherdefectoverwhichwehavenocontrol,
andrenderourdevicesinoperable.
Werelyonthirdpartycomponentsupplierstoprovidesomeofthefunctionalitiesneededtooperateanduseourproducts,suchas
Spectacles. Any errors or defects in that thirdparty technology could result in errors in our products that could seriously harm our
business. If these components have a manufacturing, design, or other defect, they can cause our products to fail and render them
permanentlyinoperable.Forexample,thetypicalmeansbywhichourSpectaclesproductconnectstomobiledevicesisbywayofa
BluetoothtransceiverlocatedintheSpectaclesproduct.IftheBluetoothtransceiverinourSpectaclesproductweretofail,itwouldnot
be able to connect to a users mobile device and Spectacles would not be able to deliver any content to the mobile device and the
Snapchatapplication.Asaresult,wewouldhavetoreplacetheseproductsatoursolecostandexpense.Shouldwehaveawidespread
problemofthiskind,thereputationaldamageandthecostofreplacingtheseproductscouldseriouslyharmourbusiness.
TheFDAandotherstateandforeignregulatoryagenciesregulateSpectacles.Wemaydevelopfutureproductsthatareregulated
as medical devices by the FDA. Government authorities, primarily the FDA and corresponding regulatory agencies, regulate the
medicaldeviceindustry.Unlessthereisanexemption,wemustobtainregulatoryapprovalfromtheFDAandcorrespondingagencies
beforewecanmarketorsellanewregulatedproductormakeasignificantmodificationtoanexistingproduct.Obtainingregulatory
clearances to market a medical device can be costly and timeconsuming, and we may not be able to obtain these clearances or
approvalsonatimelybasis,oratall,forfutureproducts.Anydelayin,orfailuretoreceiveormaintain,clearanceorapprovalforany
medicaldeviceproductsunderdevelopmentcouldpreventusfromlaunchingnewproducts.Wecouldseriouslyharmourbusinessand
theabilitytosellourproductsifweexperienceanyproductproblemsrequiringFDAreporting,ifwefailtocomplywithapplicable
FDAandotherstateorforeignagencyregulations,orifwearesubjecttoenforcementactionssuchasfines,civilpenalties,injunctions,
productrecalls,orfailuretoobtainFDAorotherregulatoryclearancesorapprovals.
Our offices are dispersed in various cities, and we do not have a designated headquarters office, which may negatively affect
employeemoraleandcouldseriouslyharmourbusiness.
Wehavemanyoffices,bothdomesticandabroad,withourprincipalofficesbeinglocatedinVenice,California.Butwedonot
haveonedesignatedheadquartersofficeinVeniceweinsteadhavemanyofficebuildingsthataredispersedthroughoutthecity.This
diffusestructuremaypreventusfromfosteringpositiveemployeemoraleandencouragingsocialinteractionamongouremployeesand
different business units. Moreover, because our office buildings are dispersed throughout the area, we may be unable to adequately
overseeemployeesandbusinessfunctions.Ifwecannotcompensatefortheseandotherissuescausedbythisgeographicallydispersed
officestructure,wemayloseemployees,whichcouldseriouslyharmourbusiness.

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We may face lawsuits or incur liability based on information retrieved from or transmitted over the internet and then posted to
Snapchat.
We have faced, currently face, and will continue to face claims relating to information that is published or made available on
Snapchat. In particular, the nature of our business exposes us to claims related to defamation, intellectual property rights, rights of
publicityandprivacy,andpersonalinjurytorts.Forexample,wedonotmonitororeditcontentthatwelicensefromourpartnerson
Snapchat. This risk is enhanced in certain jurisdictions outside the United States where our protection from liability for thirdparty
actions may be unclear and where we may be less protected under local laws than we are in the United States. We could incur
significantcostsinvestigatinganddefendingsuchclaimsand,ifwearefoundliable,significantdamages.Ifanyoftheseeventsoccur,
ourbusinesscouldbeseriouslyharmed.
Weplantocontinueexpandingouroperationsabroadwherewehavelimitedoperatingexperienceandmaybesubjecttoincreased
businessandeconomicrisksthatcouldseriouslyharmourbusiness.
We plan to continue expanding our business operations abroad and translating our products into other languages. Snapchat is
currently available in more than 20 languages, and we have offices in more than five countries. We plan to enter new international
marketswherewehavelimitedornoexperienceinmarketing,selling,anddeployingourproducts.Ifwefailtodeployormanageour
operationsininternationalmarketssuccessfully,ourbusinessmaysuffer.Inthefuture,asourinternationaloperationsincrease,ormore
of our expenses are denominated in currencies other than the U.S. dollar, our operating results may be more greatly affected by
fluctuationsintheexchangeratesofthecurrenciesinwhichwedobusiness.Inaddition,wearesubjecttoavarietyofrisksinherentin
doingbusinessinternationally,including:

political,social,andeconomicinstability

risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy, and

unexpectedchangesinlaws,regulatoryrequirements,andenforcement

potential damage to our brand and reputation due to compliance with local laws, including potential censorship and

requirementstoprovideuserinformationtolocalauthorities

fluctuationsincurrencyexchangerates

higherlevelsofcreditriskandpaymentfraud

complyingwithmultipletaxjurisdictions

enhanceddifficultiesofintegratinganyforeignacquisitions

complying with a variety of foreign laws, including certain employment laws requiring national collective bargaining

agreementsthatsetminimumsalaries,benefits,workingconditions,andterminationrequirements

reducedprotectionforintellectualpropertyrightsinsomecountries

difficulties in staffing and managing global operations and the increased travel, infrastructure, and compliance costs

associatedwithmultipleinternationallocations

regulationsthatmightadddifficultiesinrepatriatingcashearnedoutsidetheUnitedStatesandotherwisepreventingusfrom

freelymovingcash

importandexportrestrictionsandchangesintraderegulation

complyingwithstatutoryequityrequirements

complyingwiththeU.S.ForeignCorruptPracticesAct,theU.K.BriberyAct,andsimilarlawsinotherjurisdictionsand

exportcontrolsandeconomicsanctionsadministeredbytheDepartmentofCommerceBureauofIndustryandSecurityand

theTreasuryDepartmentsOfficeofForeignAssetsControl.

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Ifweareunabletoexpandinternationallyandmanagethecomplexityofourglobaloperationssuccessfully,ourbusinesscouldbe
seriouslyharmed.
NewlegislationthatwouldchangeU.S.orforeigntaxationofinternationalbusinessactivitiesorothertaxreformpoliciescould
ReformingthetaxationofinternationalbusinesseshasbeenapriorityforU.S.politicians,andkeymembersofthelegislativeand
executivebrancheshaveproposedawidevarietyofpotentialchanges.CertainchangestoU.S.taxlaws,includinglimitationsonthe
abilitytodeferU.S.taxationonearningsoutsideoftheUnitedStatesuntilthoseearningsarerepatriatedtotheUnitedStates,could
affectthetaxtreatmentofourforeignearnings,aswellascashandcashequivalentbalanceswemaintainoutsidetheUnitedStates.
Due to the large and expanding scale of our international business activities, any changes in the U.S. or foreign taxation of such
activitiesmayincreaseourworldwideeffectivetaxrateandtheamountoftaxeswepayandseriouslyharmourbusiness.
Exposure to United Kingdom political developments, including the outcome of the referendum on membership in the European
Union,couldbecostlyanddifficulttocomplywithandcouldseriouslyharmourbusiness.
InJune2016,areferendumwaspassedintheUnitedKingdomtoleavetheEuropeanUnion,commonlyreferredtoasBrexit.
This decision creates an uncertain political and economic environment in the United Kingdom and other European Union countries,
even though the formal process for leaving the European Union may take years to complete. We have licensed a portion of our
intellectualpropertytoourUnitedKingdomsubsidiaryandintendtobaseasignificantportionofournonU.S.operationsintheUnited
Kingdom. The longterm nature of the United Kingdoms relationship with the European Union is unclear and there is considerable
uncertaintywhenanyrelationshipwillbeagreedandimplemented.ThepoliticalandeconomicinstabilitycreatedbyBrexithascaused
andmaycontinuetocausesignificantvolatilityinglobalfinancialmarketsanduncertaintyregardingtheregulationofdataprotection
intheUnitedKingdom.Brexitcouldalsohavetheeffectofdisruptingthefreemovementofgoods,services,andpeoplebetweenthe
UnitedKingdom,theEuropeanUnion,andelsewhere.ThefulleffectofBrexitisuncertainanddependsonanyagreementstheUnited
Kingdom may make to retain access to European Union markets. Consequently, no assurance can be given about the impact of the
outcome and our business, including operational and tax policies, may be seriously harmed or require reassessment if our European
operationsorpresencebecomeasignificantpartofourbusiness.
Weplantocontinuetomakeacquisitions,whichcouldrequiresignificantmanagementattention,disruptourbusiness,diluteour
stockholders,andseriouslyharmourbusiness.
Aspartofourbusinessstrategy,wehavemadeandintendtomakeacquisitionstoaddspecializedemployeesandcomplementary
companies,products,andtechnologies.Ourabilitytoacquireandsuccessfullyintegratelargerormorecomplexcompanies,products,
andtechnologiesisunproven.Inthefuture,wemaynotbeabletofindothersuitableacquisitioncandidates,andwemaynotbeableto
complete acquisitions on favorable terms, if at all. Our previous and future acquisitions may not achieve our goals, and any future
acquisitionswecompletecouldbeviewednegativelybyusers,advertisers,partners,orinvestors.Inaddition,ifwefailtosuccessfully
close transactions or integrate new teams, or integrate the products and technologies associated with these acquisitions into our
company,ourbusinesscouldbeseriouslyharmed.Anyintegrationprocessmayrequiresignificanttimeandresources,andwemaynot
beabletomanagetheprocesssuccessfully.Wemaynotsuccessfullyevaluateorusetheacquiredproducts,technology,andpersonnel,
oraccuratelyforecastthefinancialimpactofanacquisitiontransaction,includingaccountingcharges.Wemayalsoincurunanticipated
liabilitiesthatweassumeasaresultofacquiringcompanies.Wemayhavetopaycash,incurdebt,orissueequitysecuritiestopayfor
anyacquisition,anyofwhichcouldseriouslyharmourbusiness.Sellingequitytofinanceanysuchacquisitionswouldalsodiluteour
stockholders. Incurring debt would increase our fixed obligations and could also include covenants or other restrictions that would
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In addition, on average, it has historically taken us approximately one year after the closing of an acquisition to finalize the
purchasepriceallocation.Therefore,itispossiblethatourvaluationofanacquisitionmaychangeandresultinunanticipatedwriteoffs
orcharges,impairmentofourgoodwill,oramaterialchangetothefairvalueoftheassetsandliabilitiesassociatedwithaparticular
acquisition,anyofwhichcouldseriouslyharmourbusiness.
Our acquisition strategy may not succeed if we are unable to remain attractive to target companies or expeditiously close
transactions.IssuingsharesofClassAcommonstocktofundanacquisitionwouldcauseeconomicdilutiontoexistingstockholdersbut
not voting dilution. If we develop a reputation for being a difficult acquirer or having an unfavorable work environment, or target
companies view our nonvoting ClassA common stock unfavorably, we may be unable to consummate key acquisition transactions
essentialtoourcorporatestrategyandourbusinessmaybeseriouslyharmed.
Ifwedefaultonourcreditobligations,ouroperationsmaybeinterruptedandourbusinesscouldbeseriouslyharmed.
We have a credit facility that we may draw on to finance our operations, acquisitions, and other corporate purposes, such as
fundingourtaxwithholdingandremittanceobligationsinconnectionwithsettlingRSUs.Ifwedefaultonthesecreditobligations,our
lendersmay:

requirerepaymentofanyoutstandingamountsdrawnonourcreditfacility

terminateourcreditfacilityand

requireustopaysignificantdamages.
Ifanyoftheseeventsoccur,ouroperationsmaybeinterruptedandourabilitytofundouroperationsorobligations,aswellasour
business,couldbeseriouslyharmed.Inaddition,ourcreditfacilitycontainsoperatingcovenants,includingcustomarylimitationson
the incurrence of certain indebtedness and liens, restrictions on certain intercompany transactions, and limitations on the amount of
dividends and stock repurchases. Our ability to comply with these covenants may be affected by events beyond our control, and
breachesofthesecovenantscouldresultinadefaultunderthecreditfacilityandanyfuturefinancialagreementsintowhichwemay
enter.Ifnotwaived,defaultscouldcauseouroutstandingindebtednessunderourcreditfacilityandanyfuturefinancingagreements
that we may enter into to become immediately due and payable. For more information on our credit facility, see Managements
DiscussionandAnalysisofFinancialConditionandResultsofOperationsLiquidityandCapitalResources.
Wemayhaveexposuretogreaterthananticipatedtaxliabilities,whichcouldseriouslyharmourbusiness.
Our income tax obligations are based on our corporate operating structure and thirdparty and intercompany arrangements,
includingthemannerinwhichwedevelop,value,anduseourintellectualpropertyandthevaluationsofourintercompanytransactions.
The tax laws applicable to our international business activities, including the laws of the United States and other jurisdictions, are
subject to change and uncertain interpretation. The taxing authorities of the jurisdictions in which we operate may challenge our
methodologiesforvaluingdevelopedtechnology,intercompanyarrangements,ortransferpricing,whichcouldincreaseourworldwide
effective tax rate and the amount of taxes we pay and seriously harm our business. Taxing authorities may also determine that the
mannerinwhichweoperateourbusinessisnotconsistentwithhowwereportourincome,whichcouldincreaseoureffectivetaxrate
and the amount of taxes we pay and seriously harm our business. In addition, our future income taxes could fluctuate because of
earningsbeinglowerthananticipatedinjurisdictionsthathavelowerstatutorytaxratesandhigherthananticipatedinjurisdictionsthat
have higher statutory tax rates, by changes in the valuation of our deferred tax assets and liabilities, or by changes in tax laws,
regulations,oraccountingprinciples.WearesubjecttoregularreviewandauditbyU.S.federalandstateandforeigntaxauthorities.
Anyadverseoutcomefromarevieworauditcouldseriouslyharmourbusiness.Inaddition,

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determiningourworldwideprovisionforincometaxesandothertaxliabilitiesrequiressignificantjudgmentbymanagement,andthere
are many transactions where the ultimate tax determination is uncertain. Although we believe that our estimates are reasonable, the
ultimatetaxoutcomemaydifferfromtheamountsrecordedinourfinancialstatementsforsuchperiodorperiodsandmayseriously
harmourbusiness.
Ourabilitytouseournetoperatinglosscarryforwardsandcertainothertaxattributesmaybelimited,eachofwhichcouldseriously
harmourbusiness.
As of December 31, 2016, we had U.S. federal net operating loss carryforwards of approximately $73.7 million and state net
operatinglosscarryforwardsofapproximately$146.3million.UnderSections382and383oftheInternalRevenueCodeof1986,as
amended,ortheCode,ifacorporationundergoesanownershipchange,thecorporationsabilitytouseitsprechangenetoperating
losscarryforwardsandotherprechangetaxattributes,suchasresearchtaxcredits,tooffsetitspostchangeincomeandtaxesmaybe
limited.Ingeneral,anownershipchangeoccursifthereisacumulativechangeinourownershipby5%shareholdersthatexceeds
50percentagepointsoverarollingthreeyearperiod.Similarrulesmayapplyunderstatetaxlaws.Intheeventthatitisdeterminedthat
wehaveinthepastexperiencedanownershipchange,orifweexperienceoneormoreownershipchangesasaresultofthisofferingor
futuretransactionsinourstock,thenwemaybelimitedinourabilitytouseournetoperatinglosscarryforwardsandothertaxassetsto
reducetaxesowedonthenettaxableincomethatweearn.Anylimitationsontheabilitytouseournetoperatinglosscarryforwardsand
othertaxassetscouldseriouslyharmourbusiness.
Ifourgoodwillorintangibleassetsbecomeimpaired,wemayberequiredtorecordasignificantchargetoearnings,whichcould
UnderU.S.generallyacceptedaccountingprinciples,orGAAP,wereviewourintangibleassetsforimpairmentwheneventsor
changesincircumstancesindicatethecarryingvaluemaynotberecoverable.Goodwillisrequiredtobetestedforimpairmentatleast
annually. As of December 31, 2016, we had recorded a total of $395.1 million of goodwill and intangible assets, net related to our
acquisitions. An adverse change in market conditions, particularly if such change has the effect of changing one of our critical
assumptions or estimates, could result in a change to the estimation of fair value that could result in an impairment charge to our
goodwillorintangibleassets.Anysuchmaterialchargesmayseriouslyharmourbusiness.
Wecannotbecertainthatadditionalfinancingwillbeavailableonreasonabletermswhenneeded,oratall,whichcouldseriously
harmourbusiness.
Wehaveincurrednetlossesandnegativecashflowfromoperationsforallpriorperiods,andwemaynotachieveormaintain
profitability.Asaresult,wemayneedadditionalfinancing.Ourabilitytoobtainadditionalfinancing,ifandwhenrequired,willdepend
oninvestordemand,ouroperatingperformance,theconditionofthecapitalmarkets,andotherfactors.Totheextentweuseavailable
fundsordrawonourcreditfacility,wemayneedtoraiseadditionalfundsandwecannotassureinvestorsthatadditionalfinancingwill
beavailabletousonfavorabletermswhenrequired,oratall.Ifweraiseadditionalfundsthroughtheissuanceofequity,equitylinked,
ordebtsecurities,thosesecuritiesmayhaverights,preferences,orprivilegesseniortotherightsofourClassAcommonstock,andour
existingstockholdersmayexperiencedilution.Intheeventthatweareunabletoobtainadditionalfinancingonfavorableterms,our
interestexpenseandprincipalrepaymentrequirementscouldincreasesignificantly,whichcouldseriouslyharmourbusiness.
PaymenttransactionsusingSnapcashorfutureproductsmaysubjectustoadditionalregulatoryrequirementsandotherrisksthat
couldbecostlyanddifficulttocomplywithandcouldseriouslyharmourbusiness.
Our users can use Snapchat to send cash to other users using our Snapcash feature. Depending on how our Snapcash product
evolvesorwhetherwedevelopadditionalcommerceproductsinthefuture,wemaybesubjecttoavarietyoflawsandregulationsin
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money transmission, gift cards, and other prepaid access instruments, electronic funds transfers, antimoney laundering, counter
terroristfinancing,gambling,bankingandlending,andimportandexportrestrictions.Althoughwecurrentlyusetheserviceofathird
party to provide the Snapcash feature, these laws may apply to us in some jurisdictions. To increase flexibility in how our use of
Snapcashmayevolveandtomitigateregulatoryuncertainty,wemayberequiredtoapplyforcertainmoneytransmitterlicensesinthe
United States, which may generally require us to demonstrate compliance with many domestic laws in these areas. Our efforts to
comply with these laws and regulations could be costly and divert managements time and effort and may still not guarantee
compliance. If we are found to violate any of these legal or regulatory requirements, we may be subject to monetary fines or other
penalties,suchasaceaseanddesistorder,orwemayberequiredtomakeproductchanges,anyofwhichcouldseriouslyharmour
business.Moreover,theSnapcashproductisnotenabledonSnapchatbydefault,andourusersmustmanuallyenablethefeaturewithin
the application, which may prevent the Snapcash product from gaining traction with our users or becoming a material part of our
business.WehavenotrecognizedrevenuerelatedtoSnapcashtodate.
Inaddition,wemaybesubjecttoavarietyofadditionalrisksasaresultofSnapcash,including:

increasedcostsanddiversionofmanagementtimeandeffortandotherresourcestodealwithbadtransactionsorcustomer

disputes

potentialfraudulentorotherwiseillegalactivitybyusersorthirdparties

restrictionsontheinvestmentofconsumerfundsusedtomakeSnapcashtransactionsand

additionaldisclosureandreportingrequirements.
Ifanyoftheserisksoccurs,ourbusinessmaybeseriouslyharmed.
RisksRelatedtoOurInitialPublicOfferingandOwnershipofOurClassACommonStock
HoldersofClassAcommonstockhavenovotingrights.Asaresult,holdersofClassAcommonstockwillnothaveanyabilityto
influencestockholderdecisions.
ClassAcommonstockholders,includingthosepurchasingClassAcommonstockinthisoffering,havenovotingrights,unless
requiredbyDelawarelaw.Asaresult,allmatterssubmittedtostockholderswillbedecidedbythevoteofholdersofClassBcommon
stockandClassCcommonstock.Mr.SpiegelandMr.Murphywillhavecontrolof%ofourvotingpowerafterthisoffering,and
potentiallyeitheroneofthemalone,havetheabilitytocontroltheoutcomeofallmatterssubmittedtoourstockholdersforapproval.In
addition,becauseourClassAcommonstockcarriesnovotingrights(exceptasrequiredbyDelawarelaw),theissuanceoftheClassA
commonstock,inthisofferingorfutureofferings,infuturestockbasedacquisitiontransactions,andtofundemployeeequityincentive
programs, could prolong the duration of Mr. Spiegels and Mr. Murphys current relative ownership of our voting power and their
abilitytoelectcertaindirectorsandtodeterminetheoutcomeofallmatterssubmittedtoavoteofourstockholders.Thisconcentrated
controleliminatesotherstockholdersabilitytoinfluencecorporatemattersand,asaresult,wemaytakeactionsthatourstockholders
donotviewasbeneficial.Asaresult,themarketpriceofourClassAcommonstockcouldbeadverselyaffected.
WearenotawareofanyothercompanythathascompletedaninitialpublicofferingofnonvotingstockonaU.S.stockexchange.
Wethereforecannotpredicttheimpactourcapitalstructureandtheconcentratedcontrolbyourfoundersmayhaveonourstock
priceorourbusiness.
AlthoughotherU.S.basedcompanieshavepubliclytradedclassesofnonvotingstock,toourknowledge,noothercompanyhas
completedaninitialpublicofferingofnonvotingstockonaU.S.stockexchange.Wecannotpredictwhetherthisstructure,combined
withtheconcentratedcontrolbyMr.SpiegelandMr.Murphy,willresultinalowertradingpriceorgreaterfluctuationsinthetrading
price of our ClassA common stock as compared to the market price were we to sell voting stock in this offering, or will result in
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BecauseourClassAcommonstockisnonvoting,weandourstockholdersareexemptfromcertainprovisionsofU.S.securities
laws.ThismaylimittheinformationavailabletoholdersofourClassAcommonstock.
BecauseourClassAcommonstockisnonvoting,significantholdersofourcommonstockareexemptfromtheobligationtofile
reportsunderSections13(d),13(g),and16oftheExchangeAct.Theseprovisionsgenerallyrequireperiodicreportingofbeneficial
ownershipbysignificantstockholders.OurdirectorsandofficersarerequiredtofilereportsunderSection16oftheExchangeAct.Our
significantstockholders,otherthandirectorsandofficers,areexemptfromtheshortswingprofitrecoveryprovisionsofSection16
oftheExchangeActandrelatedruleswithrespecttotheirpurchasesandsalesofoursecurities.SinceourClassAcommonstockwill
beouronlyclassofstockregisteredunderSection12oftheExchangeActandthatclassisnonvoting,wewillnotbesubjecttothe
proxyrulesunderSection14oftheExchangeAct,unlessavoteoftheClassAcommonstockisrequiredbyapplicablelaw.Moreover,
holdersofourClassAcommonstockwillbeunabletobringmattersbeforeourannualmeetingofstockholdersornominatedirectors
atsuchmeeting,norcantheysubmitstockholderproposalsunderRule14a8oftheExchangeAct.Formoreinformationregardingour
reportingobligations,seeWhereYouCanFindAdditionalInformation.
The market price of our ClassA common stock may be volatile or may decline steeply or suddenly regardless of our operating
performanceandwemaynotbeabletomeetinvestororanalystexpectations.Youmaynotbeabletoresellyoursharesatorabove
theinitialpublicofferingpriceandmayloseallorpartofyourinvestment.
TheinitialpublicofferingpriceforourClassAcommonstockwasdeterminedthroughnegotiationsbetweentheunderwritersand
us,andmayvaryfromthemarketpriceofourClassAcommonstockfollowingourinitialpublicoffering.Ifyoupurchasesharesof
ourClassAcommonstockinourinitialpublicoffering,youmaynotbeabletoresellthosesharesatorabovetheinitialpublicoffering
price.Wecannotassureyouthatthemarketpricefollowingourinitialpublicofferingwillequalorexceedpricesinprivatelynegotiated
transactions of our shares that have occurred from time to time before our initial public offering. The market price of our ClassA
commonstockmayfluctuateordeclinesignificantlyinresponsetonumerousfactors,manyofwhicharebeyondourcontrol,including:

actualoranticipatedfluctuationsinourusergrowth,retention,engagement,revenue,orotheroperatingresults

variations between our actual operating results and the expectations of securities analysts, investors, and the financial

community

ourplanstonotprovidequarterlyorannualfinancialguidanceorprojections

anyforwardlookingfinancialoroperatinginformationwemayprovidetothepublicorsecuritiesanalysts,anychangesin

thisinformation,orourfailuretomeetexpectationsbasedonthisinformation

actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities

analystswhofollowourcompany,orourfailuretomeettheseestimatesortheexpectationsofinvestors

whetherinvestorsoranalystsviewourstockstructureunfavorably,particularlyournonvotingClassAcommonstockand

thesignificantvotingcontrolofourcofounders

additionalsharesofourcommonstockbeingsoldintothemarketbyusorourexistingstockholders,ortheanticipationof
suchsales,includingifweissuesharestosatisfyRSUrelatedtaxobligationsorifexistingstockholderssellsharesintothe
marketwhenapplicablelockupperiodsend

announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic

partnerships,jointventures,orcapitalcommitments

announcementsbyusorestimatesbythirdpartiesofactualoranticipatedchangesinthesizeofouruserbaseorthelevelof

userengagement

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changes in operating performance and stock market valuations of technology companies in our industry, including our

partnersandcompetitors

priceandvolumefluctuationsintheoverallstockmarket,includingasaresultoftrendsintheeconomyasawhole

lawsuitsthreatenedorfiledagainstus

developmentsinnewlegislationandpendinglawsuitsorregulatoryactions,includinginterimorfinalrulingsbyjudicialor

regulatorybodiesand

othereventsorfactors,includingthoseresultingfromwarorincidentsofterrorism,orresponsestotheseevents.
In addition, extreme price and volume fluctuations in the stock markets have affected and continue to affect many technology
companies stock prices. Often, their stock prices have fluctuated in ways unrelated or disproportionate to the companies operating
performance.Inthepast,stockholdershavefiledsecuritiesclassactionlitigationfollowingperiodsofmarketvolatility.Ifwewereto
becomeinvolvedinsecuritieslitigation,itcouldsubjectustosubstantialcosts,divertresourcesandtheattentionofmanagementfrom
ourbusiness,andseriouslyharmourbusiness.
Delawarelawandprovisionsinouramendedandrestatedcertificateofincorporationandamendedandrestatedbylawsthatwillbe
ineffectattheclosingofourinitialpublicofferingcouldmakeamerger,tenderoffer,orproxycontestdifficult,therebydepressing
thetradingpriceofourClassAcommonstock.
Ouramendedandrestatedcertificateofincorporationandamendedandrestatedbylawscontainprovisionsthatcoulddepressthe
tradingpriceofourClassAcommonstockbyactingtodiscourage,delay,orpreventachangeofcontrolofourcompanyorchangesin
ourmanagementthatthestockholdersofourcompanymaydeemadvantageous.Theseprovisionsincludethefollowing:

our amended and restated certificate of incorporation provides for a triclass capital stock structure. As a result of this
structure,aftertheoffering,Mr.SpiegelandMr.Murphywillcontrolallstockholderdecisions.AsaresultofMr.Spiegels
RSUaward,Mr.Spiegelalonemayexercisevotingcontroloverouroutstandingcapitalstock.Iftheyvotetogether,theywill
havecontroloverallstockholdermatters.Thisincludestheelectionofdirectorsandsignificantcorporatetransactions,such

asamergerorothersaleofourcompanyorourassets.Thisconcentratedcontrolcoulddiscourageothersfrominitiatingany
potentialmerger,takeover,orotherchangeofcontroltransactionthatotherstockholdersmayviewasbeneficial.Asnoted
above,theissuanceoftheClassAcommonstockdividend,andanyfutureissuancesofClassAcommonstockdividends,
couldhavetheeffectofprolongingtheinfluenceofMr.SpiegelandMr.Murphyonthecompany

ourboardofdirectorshastherighttoelectdirectorstofillavacancycreatedbytheexpansionoftheboardofdirectorsorthe
resignation,death,orremovalofadirector,whichpreventsstockholdersfrombeingabletofillvacanciesonourboardof
directors

ouramendedandrestatedcertificateofincorporationprohibitscumulativevotingintheelectionofdirectors.Thislimitsthe

abilityofminoritystockholderstoelectdirectorcandidatesand

ourboardofdirectorsmayissue,withoutstockholderapproval,sharesofundesignatedpreferredstock.Theabilitytoissue
undesignatedpreferredstockmakesitpossibleforourboardofdirectorstoissuepreferredstockwithvotingorotherrights
orpreferencesthatcouldimpedethesuccessofanyattempttoacquireus.
Anyprovisionofouramendedandrestatedcertificateofincorporation,amendedandrestatedbylaws,orDelawarelawthathas
theeffectofdelayingordeterringachangeincontrolcouldlimittheopportunityforourstockholderstoreceiveapremiumfortheir
sharesofourcommonstock,andcouldalsoaffectthepricethatsome

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investorsarewillingtopayforourClassAcommonstock.Forinformationregardingtheseandotherprovisions,seeDescriptionof
CapitalStockAntiTakeoverProvisions.
AnactivetradingmarketforourClassAcommonstockmayneverdeveloporbesustained.
WehaveappliedtolistourClassAcommonstockontheNYSEunderthesymbolSNAP.However,wecannotassureyouthat
anactivetradingmarketforourClassAcommonstockwilldeveloponthatexchangeorelsewhereor,ifdeveloped,thatanymarket
willbesustained.Accordingly,wecannotassureyouofthelikelihoodthatanactivetradingmarketforourClassAcommonstockwill
develop or be maintained, the liquidity of any trading market, your ability to sell your shares of our ClassA common stock when
desiredorthepricesthatyoumayobtainforyourshares.
Futuresalesofsharesbyexistingstockholderscouldcauseourstockpricetodecline.
Ifourexistingstockholders,includingemployeesandserviceproviderswhoobtainequity,sell,orindicateanintentiontosell,
substantialamountsofourClassAcommonstockinthepublicmarketafterthelockupandlegalrestrictionsonresalediscussedinthis
prospectuslapse,thetradingpriceofourClassAcommonstockcoulddecline.BasedonsharesoutstandingasofDecember31,2016,
ontheclosingofthisoffering,wewillhaveoutstandingatotalofsharesofClassAcommonstock,sharesofClassB
commonstock,andsharesofClassCcommonstock,assumingnoexerciseofoutstandingoptions,andaftergivingeffecttothe
conversionofalloutstandingsharesofourpreferredstockintosharesofClassBcommonstockontheclosingofthisofferingandthe
saleofClassAcommonstockbythesellingstockholdersinthisoffering.Oftheseshares,onlythesharesofClassAcommonstock
sold in this offering will be freely tradable, without restriction, in the public market immediately after the offering. Each of our
directors,executiveofficers,andotherholdersofsubstantiallyallouroutstandingshareshaveenteredintolockupagreementswiththe
underwriters that restrict their ability to sell or transfer their shares. The lockup agreements pertaining to this offering will expire
150daysafterthedateofthisprospectusprovided,thatsuchrestrictedperiodwillendtenbusinessdayspriortothescheduledclosure
ofourtradingwindowforthefirstfullfiscalquartercompletedafterthedateofthisprospectusif(i)suchrestrictedperiodendsduring
orwithintenbusinessdayspriortothescheduledclosureofsuchtradingwindowand(ii)suchrestrictedperiodwillendatleast120
daysafterthedateofthisprospectus.Weanticipatethatthescheduledtradingwindowclosureforthefirstfullquarterafterthedateof
thisprospectuswillbeginonJune10,2017andopenafterthefirstfulltradingdayfollowingourannouncementofearningsforthat
quarter.However,eitherMorganStanley&Co.LLCorGoldman,Sachs&Co.may,initssolediscretion,waivethecontractuallock
up before the lockup agreements expire. In addition, we or the underwriters may, from time to time, enter into a separate lockup
agreementwithsomeoftheinvestorsinthisoffering.Thisseparatelockupagreementmayprovideforarestrictedperiodthatislonger
thantheperioddescribedabove.Afterthelockupagreementsexpire,allsharesoutstandingasofDecember31,2016willbe
eligibleforsaleinthepublicmarket,ofwhichsharesareheldbydirectors,executiveofficers,andotheraffiliatesandwillbe
subject to volume limitations under Rule 144 of the Securities Act of 1933, as amended, or the Securities Act, and various vesting
agreements. In addition, shares of ClassA common stock and shares of Class B common stock are subject to
outstandingstockoptionsandRSUsasofDecember31,2016andoutstandingRSUsandstockoptionstopurchaseanaggregateof
sharesofClassAcommonstockandsharesofClassBcommonstockweregrantedsubsequenttoDecember31,2016.
Theseshareswillbecomeeligibleforsaleinthepublicmarkettotheextentpermittedbytheprovisionsofvariousvestingagreements,
thelockupagreements,andRules144and701oftheSecuritiesAct.WeintendtofilearegistrationstatementonFormS8underthe
SecuritiesActcoveringallthesharesofClassAcommonstocksubjecttostockoptionsoutstandingandreservedforissuanceunderour
stockplans.Thisregistrationstatementwillbecomeeffectiveimmediatelyonfiling,andsharescoveredbythisregistrationstatement
will be eligible for sale in the public markets, subject to Rule 144 limitations applicable to affiliates and any lockup agreements
describedabove.Iftheseadditionalsharesaresold,orifitisperceivedthattheywillbesoldinthepublicmarket,thetradingpriceof
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Youshouldrelyonlyonstatementsmadeinthisprospectusindeterminingwhethertopurchaseourshares,notoninformationin
publicmediathatispublishedbythirdparties.
Youshouldcarefullyreadandevaluatealltheinformationinthisprospectus.Inthepast,wehavereceived,andmaycontinueto
receive, a high degree of media coverage. This includes coverage that is not attributable to statements made by our officers or
employeesorincorrectlyreportsonstatementsmadebyourofficersoremployees.Inaddition,coveragemaybemisleadingifitomits
information provided by us, our officers, or employees or public data. You should rely only on the information contained in this
prospectusindeterminingwhethertopurchaseoursharesofClassAcommonstock.
Wehavebroaddiscretioninhowwemayusethenetproceedsfromourinitialpublicoffering,andwemaynotusethemeffectively.
Wecannotspecifywithanycertaintytheparticularusesofthenetproceedsthatwewillreceivefromourinitialpublicoffering.
Ourmanagementwillhavebroaddiscretioninapplyingthenetproceedswereceivefromthisoffering.Wemayusethenetproceeds
forgeneralcorporatepurposes,includingworkingcapital,operatingexpenses,andcapitalexpenditures.Wemayuseaportionofthe
netproceedstoacquirecomplementarybusinesses,products,services,ortechnologies.Wemayalsousesomeofthenetproceedsto
satisfytaxwithholdingobligationsrelatedtothevestingofRSUs,whichwillbegintovestafterthecompletionofthisoffering.We
mayalsospendorinvesttheseproceedsinawaywithwhichourstockholdersdisagree.Ifourmanagementfailstousethesefunds
effectively,ourbusinesscouldbeseriouslyharmed.Pendingtheiruse,thenetproceedsfromourinitialpublicofferingmaybeinvested
inawaythatdoesnotproduceincomeorthatlosesvalue.
Ifsecuritiesorindustryanalystseitherdonotpublishresearchaboutus,orpublishinaccurateorunfavorableresearchaboutus,
ourbusiness,orourmarket,oriftheychangetheirrecommendationsregardingourcommonstockadversely,thetradingpriceor
tradingvolumeofourClassAcommonstockcoulddecline.
ThetradingmarketforourClassAcommonstockwillbeinfluencedinpartbytheresearchandreportsthatsecuritiesorindustry
analystsmaypublishaboutus,ourbusiness,ourmarket,orourcompetitors.Ifoneormoreoftheanalystsinitiateresearchwithan
unfavorable rating or downgrade our ClassA common stock, provide a more favorable recommendation about our competitors, or
publishinaccurateorunfavorableresearchaboutourbusiness,ourClassAcommonstockpricewouldlikelydecline.Ifanyanalyst
who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial
markets,whichinturncouldcausethetradingpriceortradingvolumetodecline.
Weareanemerginggrowthcompany,andanydecisiononourparttocomplyonlywithcertainreducedreportinganddisclosure
requirementsapplicabletoemerginggrowthcompaniescouldmakeourClassAcommonstocklessattractivetoinvestors.
Weareanemerginggrowthcompany,and,foraslongaswecontinuetobeanemerginggrowthcompany,wemaychoosetotake
advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth
companies,including:

not being required to have our independent registered public accounting firm audit our internal control over financial

reportingunderSection404oftheSarbanesOxleyAct

reduceddisclosureobligationsregardingexecutivecompensationinourperiodicreportsandproxystatementsand

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder

approvalofanygoldenparachutepaymentsnotpreviouslyapproved.

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We could be an emerging growth company for up to five years following the completion of this offering. Our status as an
emerginggrowthcompanywillendassoonasanyofthefollowingtakesplace:

thelastdayofthefiscalyearinwhichwehavemorethan$1.0billioninannualrevenue

thedatewequalifyasalargeacceleratedfiler,withatleast$700millionofequitysecuritiesheldbynonaffiliates

thedateonwhichwehaveissued,inanythreeyearperiod,morethan$1.0billioninnonconvertibledebtsecuritiesor

thelastdayofthefiscalyearendingafterthefifthanniversaryofthecompletionofthisoffering.
WecannotpredictifinvestorswillfindourClassAcommonstocklessattractiveifwechoosetorelyonanyoftheexemptions
affordedemerginggrowthcompanies.IfsomeinvestorsfindourClassAcommonstocklessattractivebecausewerelyonanyofthese
exemptions,theremaybealessactivetradingmarketforourClassAcommonstockandthemarketpriceofourClassAcommonstock
maybemorevolatile.
UndertheJOBSAct,emerginggrowthcompaniescanalsodelayadoptingneworrevisedaccountingstandardsuntilsuchtimeas
those standards apply to private companies. We have irrevocably elected not to avail ourselves of this accommodation allowing for
delayed adoption of new or revised accounting standards, and therefore, we will be subject to the same new or revised accounting
standardsasotherpubliccompaniesthatarenotemerginggrowthcompanies.
Wedonotintendtopaycashdividendsfortheforeseeablefuture.
Wehaveneverdeclaredorpaidcashdividendsonourcapitalstock.Wecurrentlyintendtoretainanyfutureearningstofinance
theoperationandexpansionofourbusiness,andwedonotexpecttodeclareorpayanycashdividendsintheforeseeablefuture.Asa
result,youmayonlyreceiveareturnonyourinvestmentinourClassAcommonstockifthemarketpriceofourClassAcommonstock
increases.Inaddition,ourcreditfacilityincludesrestrictionsonourabilitytopaycashdividends.
We have previously identified material weaknesses in our internal control over financial reporting, and if we are unable to
implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the
accuracyandcompletenessofourfinancialreports,andthemarketpriceofourClassAcommonstockmaybeseriouslyharmed.
As a public company, we will be required to maintain internal control over financial reporting and to report any material
weaknessesinthoseinternalcontrols,subjecttoanyexemptionsthatweavailourselvestoundertheJOBSAct.Forexample,wewill
berequiredtoperformsystemandprocessevaluationandtestingofourinternalcontroloverfinancialreportingtoallowmanagement
toreportontheeffectivenessofourinternalcontroloverfinancialreporting,asrequiredbySection404oftheSarbanesOxleyAct.We
are in the process of designing, implementing, and testing internal control over financial reporting required to comply with this
obligation.Thatprocessistimeconsuming,costly,andcomplicated.
Weandourpriorindependentregisteredpublicaccountingfirm,PricewaterhouseCoopersLLP,identifiedmaterialweaknessesin
ourinternalcontroloverfinancialreporting,fortheyearendedDecember31,2014,relatedtothelackofsufficientqualifiedaccounting
personnel,whichledtoincorrectapplicationofgenerallyacceptedaccountingprinciples,insufficientlydesignedsegregationofduties,
and insufficiently designed controls over business processes, including the financial statement close and reporting processes with
respect to the development of accounting policies, procedures, and estimates. After these material weaknesses were identified,
management implemented a remediation plan that included hiring key accounting personnel, creating a formal monthend close
process, and establishing more robust processes supporting internal controls over financial reporting, including accounting policies,
procedures,andestimates.AsofDecember31,2015,wehaveimplementedcontrolssufficienttoremediatethematerialweaknesses.
Ourremediationeffortsarecompleteandwedidnotincuranymaterialcosts.

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If we identify future material weaknesses in our internal control over financial reporting, if we are unable to comply with the
requirementsofSection404oftheSarbanesOxleyActinatimelymannerorassertthatourinternalcontroloverfinancialreportingis
effective,orifourindependentregisteredpublicaccountingfirmisunabletoexpressanopinionorexpressesaqualifiedoradverse
opinion about the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and
completenessofourfinancialreportsandthemarketpriceofourClassAcommonstockcouldbenegativelyaffected.Inaddition,we
could become subject to investigations by the stock exchange on which our securities are listed, the Securities and Exchange
Commission,ortheSEC,andotherregulatoryauthorities,whichcouldrequireadditionalfinancialandmanagementresources.
Therequirementsofbeingapubliccompanymaystrainourresources,resultinmorelitigation,anddivertmanagementsattention.
Asapubliccompany,wewillbesubjecttothereportingrequirementsoftheSecuritiesExchangeActof1934,asamended,orthe
ExchangeAct,theSarbanesOxleyAct,theDoddFrankWallStreetReformandConsumerProtectionAct,ortheDoddFrankAct,the
listingrequirementsoftheNYSE,andotherapplicablesecuritiesrulesandregulations.Complyingwiththeserulesandregulationswill
increaseourlegalandfinancialcompliancecosts,makesomeactivitiesmoredifficult,timeconsumingorcostly,andincreasedemand
onoursystemsandresources.TheExchangeActrequires,amongotherthings,thatwefileannual,quarterly,andcurrentreportswith
respecttoourbusinessandoperatingresults.
Bydisclosinginformationinthisprospectusandinfilingsrequiredofapubliccompany,ourbusinessandfinancialconditionwill
becomemorevisible,whichwebelievemayresultinthreatenedoractuallitigation,includingbycompetitorsandotherthirdparties.If
thoseclaimsaresuccessful,ourbusinesscouldbeseriouslyharmed.Eveniftheclaimsdonotresultinlitigationorareresolvedinour
favor,thetimeandresourcesneededtoresolvethemcoulddivertourmanagementsresourcesandseriouslyharmourbusiness.
IfyoupurchasesharesofourClassAcommonstockinourinitialpublicoffering,youwillexperiencesubstantialandimmediate
dilution.
Theassumedinitialpublicofferingpriceof$pershare,whichisthemidpointoftheestimatedofferingpricerangeonthe
cover page of this prospectus, is substantially higher than the net tangible book value per share of our outstanding common stock
immediatelyafterthisoffering.IfyoupurchasesharesofourClassAcommonstockinourinitialpublicoffering,youwillexperience
substantialandimmediatedilutionintheproformanettangiblebookvaluepershareof$pershareasofDecember31,2016,
basedontheinitialpublicofferingpriceof$pershare.Thatisbecausethepricethatyoupaywillbesubstantiallygreaterthan
theproformanettangiblebookvaluepershareoftheClassAcommonstockthatyouacquire.Thisdilutionisdueinlargeparttothe
factthatourearlierinvestorspaidsubstantiallylessthantheinitialpublicofferingpricewhentheypurchasedtheirsharesofourcapital
stock. You will experience additional dilution when those holding options exercise their right to purchase common stock under our
equityincentiveplans,whenRSUsvestandsettle,whenweissuerestrictedstocktoouremployeesunderourequityincentiveplans,or
whenweotherwiseissueadditionalsharesofourcommonstock.Formoreinformation,seeDilution.
OuramendedandrestatedcertificateofincorporationprovidesthattheCourtofChanceryoftheStateofDelawareandthefederal
district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our
stockholders,whichcouldlimitourstockholdersabilitytoobtainafavorablejudicialforumfordisputeswithusorourdirectors,
officers,oremployees.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the
exclusiveforumfor:

anyderivativeactionorproceedingbroughtonourbehalf

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anyactionassertingabreachoffiduciaryduty

any action asserting a claim against us arising under the Delaware General Corporation Law, our amended and restated

certificateofincorporation,orouramendedandrestatedbylawsand

anyactionassertingaclaimagainstusthatisgovernedbytheinternalaffairsdoctrine.
Our amended and restated certificate of incorporation further provides that the federal district courts of the United States of
AmericawillbetheexclusiveforumforresolvinganycomplaintassertingacauseofactionarisingundertheSecuritiesAct.
Theseexclusiveforumprovisionsmaylimitastockholdersabilitytobringaclaiminajudicialforumthatitfindsfavorablefor
disputeswithusorourdirectors,officers,orotheremployees,whichmaydiscouragelawsuitsagainstusandourdirectors,officers,and
otheremployees.Ifacourtweretofindeitherexclusiveforumprovisioninouramendedandrestatedcertificateofincorporationtobe
inapplicableorunenforceableinanaction,wemayincuradditionalcostsassociatedwithresolvingthedisputeinotherjurisdictions,
whichcouldseriouslyharmourbusiness.

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SPECIALNOTEREGARDINGFORWARDLOOKINGSTATEMENTS
Thisprospectuscontainsforwardlookingstatementsaboutusandourindustrythatinvolvesubstantialrisksanduncertainties.All
statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of
operationsorfinancialcondition,businessstrategyandplans,andobjectivesofmanagementforfutureoperations,areforwardlooking
statements. In some cases, you can identify forwardlooking statements because they contain words such as anticipate, believe,
contemplate,continue,could,estimate,expect,intend,may,plan,potential,predict,project,should,target,
will,orwouldorthenegativeofthesewordsorothersimilartermsorexpressions.
We have based these forwardlooking statements largely on our current expectations and projections about future events and
financialtrendsthatwebelievemayaffectourfinancialcondition,resultsofoperations,businessstrategy,andfinancialneeds.These
forwardlookingstatementsaresubjecttoknownandunknownrisks,uncertainties,andassumptions,includingrisksdescribedinRisk
Factorsandelsewhereinthisprospectus,regarding,amongotherthings:

ourfinancialperformance,includingourrevenues,costofrevenues,operatingexpenses,andourabilitytoattainandsustain

profitability

ourabilitytoattractandretainusers

ourabilitytoattractandretainadvertisers

ourabilitytocompeteeffectivelywithexistingcompetitorsandnewmarketentrants

ourabilitytosuccessfullyexpandinourexistingmarketsandpenetratenewmarkets

ourabilitytoeffectivelymanageourgrowth,andfutureexpenses

ourabilitytomaintain,protect,andenhanceourintellectualproperty

ourabilitytocomplywithmodifiedornewlawsandregulationsapplyingtoourbusiness

ourabilitytoattractandretainqualifiedemployeesandkeypersonneland

futureacquisitionsoforinvestmentsincomplementarycompanies,products,services,ortechnologies.
Youshouldnotrelyonforwardlookingstatementsaspredictionsoffutureevents.Wehavebasedtheforwardlookingstatements
containedinthisprospectusprimarilyonourcurrentexpectationsandprojectionsaboutfutureeventsandtrendsthatwebelievemay
affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward
looking statements is subject to risks, uncertainties, and other factors described in Risk Factors and elsewhere in this prospectus.
Moreover,weoperateinaverycompetitiveandrapidlychangingenvironment.Newrisksanduncertaintiesemergefromtimetotime,
anditisnotpossibleforustopredictallrisksanduncertaintiesthatcouldhaveanimpactontheforwardlookingstatementscontained
inthisprospectus.Theresults,events,andcircumstancesreflectedintheforwardlookingstatementsmaynotbeachievedoroccur,and
actualresults,events,orcircumstancescoulddiffermateriallyfromthosedescribedintheforwardlookingstatements.
In addition, statements that we believe and similar statements reflect our beliefs and opinions on the relevant subject. These
statementsarebasedoninformationavailabletousasofthedateofthisprospectus.Andwhilewebelievethatinformationprovidesa
reasonablebasisforthesestatements,thatinformationmaybelimitedorincomplete.Ourstatementsshouldnotbereadtoindicatethat
wehaveconductedanexhaustiveinquiryinto,orreviewof,allrelevantinformation.Thesestatementsareinherentlyuncertain,and
investorsarecautionednottoundulyrelyonthesestatements.

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Theforwardlookingstatementsmadeinthisprospectusrelateonlytoeventsasofthedateonwhichthestatementsaremade.We
undertakenoobligationtoupdateanyforwardlookingstatementsmadeinthisprospectustoreflecteventsorcircumstancesafterthe
dateofthisprospectusortoreflectnewinformationortheoccurrenceofunanticipatedevents,exceptasrequiredbylaw.Wemaynot
actually achieve the plans, intentions, or expectations disclosed in our forwardlooking statements, and you should not place undue
reliance on our forwardlooking statements. Our forwardlooking statements do not reflect the potential impact of any future
acquisitions,mergers,dispositions,jointventures,orinvestments.

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MARKET,INDUSTRY,ANDOTHERDATA
Thisprospectuscontainsestimatesandinformationconcerningourindustry,includingmarketsizeandgrowthratesofthemarkets
in which we participate, that are based on industry publications and reports. This information involves many assumptions and
limitations, and you are cautioned not to give undue weight to these estimates. We have not independently verified the accuracy or
completenessofthedatacontainedintheseindustrypublicationsandreports.Theindustryinwhichweoperateissubjecttoahigh
degreeofuncertaintyandriskduetoavarietyoffactors,includingthosedescribedinRiskFactors,thatcouldcauseresultstodiffer
materiallyfromthoseexpressedinthesepublicationsandreports.
Certain information in the text of this prospectus is contained in industry publications or data compiled by a third party. The
sourcesoftheseindustrypublicationsanddataareprovidedbelow:

AdvertiserPerceptions,Inc.,DigitalCampaignManagementSystemReport,WaveThree(September1,2016).
eMarketerInc.,AverageTimeSpentperDaywithMajorMediabyUSAdults(October1,2016).

eMarketerInc.,SmartphoneUsersinWesternEurope,byCountry,20152020(September1,2016).

InternationalDataCorporation,Inc.,WorldwideNewMediaMarketModel(January2,2017).

TheNielsenCompany(US),LLC,NationalTVRatingsDataTimeSpentonTraditionalTV(Q22010vs.Q22016).
Forsomestatisticalinformationinthisprospectus,werelyonindustrydatacompiledbyTheNielsenCompany,withwhomwe
alsohaveanarmslengthcommercialrelationship.
UserMetricsandOtherData
WedefineaDailyActiveUserasaregisteredSnapchatuserwhoopenstheSnapchatapplicationatleastonceduringadefined
24hourperiod.WemeasureaverageDailyActiveUsersforaparticularquarterbycalculatingtheaverageDailyActiveUsersforthat
quarter. We also break out Daily Active Users by geography because certain markets have a greater revenue opportunity and lower
bandwidthcosts.WedefineARPUasquarterlyrevenuedividedbytheaverageDailyActiveUsers.ForpurposesofcalculatingARPU,
revenuebyusergeographyisapportionedtoeachregionbasedonourdeterminationofthegeographiclocationinwhichadvertising
impressionsaredelivered,asthisapproximatesrevenuebasedonuseractivity.Thisallocationdiffersfromourrevenuebygeography
disclosure in the notes to our consolidated financial statements, where revenue is based on the billing address of the advertising
customer.Forinformationconcerningthesemetricsasmeasuredbyus,includingadiscussionofanalternativemethodofcalculating
DailyActiveUsers,seeManagementsDiscussionandAnalysisofFinancialConditionandResultsofOperationsOverview.
Unless otherwise stated, statistical information regarding our users and their activities is determined by calculating the daily
average of the selected activity for the most recently completed quarter included in this prospectus. For example, we state that on
averageover2.5billionSnapswerecreatedeverydayinthequarterendedDecember31,2016.Thismetricistheaverageofthetotal
numberofSnapscreateddailythroughoutthequarterendedDecember31,2016,whichisthemostrecentlycompletedquarterincluded
in this prospectus. This same methodology is used to calculate other metrics related to Daily Active Users, including percentage of
DailyActiveUsersthatusetheChatServiceeveryday,numberoftimesadayDailyActiveUsersvisitSnapchat,andamountoftime
spentonSnapchateveryday.
Whilethesemetricsaredeterminedbasedonwhatwebelievetobereasonableestimatesofouruserbasefortheapplicableperiod
ofmeasurement,thereareinherentchallengesinmeasuringhowourproductsareusedacrosslargepopulationsglobally.Forexample,
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even though we forbid that in our Terms of Service and implement measures to detect and suppress that behavior. We have not
determined the number of such multiple accounts. Our user metrics are also affected by technology on certain mobile devices that
automaticallyrunsinthebackgroundofourSnapchatapplicationwhenanotherphonefunctionisused,andthisactivitycancauseour
system to miscount the user metrics associated with such account. Changes in our products, mobile operating systems, or metric
tracking system, or the introduction of new products, may impact our ability to accurately determine Daily Active Users or other
metricsandwemaynotdeterminesuchinaccuraciespromptly.
Someofourdemographicdatamaybeincompleteorinaccurate.Forexample,becauseusersselfreporttheirdatesofbirth,our
agedemographicdatamaydifferfromourusersactualages.AndbecauseuserswhosignedupforSnapchatbeforeJune2013were
notaskedtosupplytheirdateofbirth,weexcludethoseusersandestimatetheiragesbasedonasampleoftheselfreportedageswedo
have.IfourDailyActiveUsersprovideuswithincorrectorincompleteinformationregardingtheirageorotherattributes,thenour
estimatesmayproveinaccurateandfailtomeetinvestorexpectations.
Inthepastwehavereliedonthirdpartyanalyticsproviderstocalculateourmetrics,buttodaywerelyprimarilyonouranalytics
platformthatwedevelopedandoperate.Forexample,beforeJune2015,weusedathirdpartythatcountedaDailyActiveUserwhen
theapplicationwasopenedoranotificationwasreceivedviatheapplicationonanydevice.Wenowuseananalyticsplatformthatwe
developedandoperateandwecountaDailyActiveUseronlywhenauseropenstheapplicationandonlyonceperuserperday.We
believethismethodologymoreaccuratelymeasuresouruserengagement.Additionally,toalignourpreJune2015DailyActiveUsers
withthisnewmethodology,wereducedourpreJune2015DailyActiveUsersby4.8%,theamountbywhichweestimatedthedata
generatedbythethirdpartywasoverstated.Asaresult,ourmetricsmaynotbecomparabletopriorperiods.
If we fail to maintain an effective analytics platform, our metrics calculations may be inaccurate. We regularly review, have
adjustedinthepast,andarelikelyinthefuturetoadjustourprocessesforcalculatingourinternalmetricstoimprovetheiraccuracy.As
aresultofsuchadjustments,ourDailyActiveUsersorothermetricsmaynotbecomparabletothoseinpriorperiods.Ourmeasuresof
Daily Active Users may differ from estimates published by third parties or from similarly titled metrics of our competitors due to
differencesinmethodologyordataused.

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USEOFPROCEEDS
Weestimatethatwewillreceivenetproceedsfromthisofferingof$billionbasedonanassumedinitialpublicoffering
priceof$pershareofClassAcommonstock,themidpointoftheestimatedpricerangesetforthonthecoverpageofthis
prospectus,afterdeductingestimatedunderwritingdiscountsandcommissionsandestimatedofferingexpensespayablebyus.Wewill
notreceiveanyoftheproceedsfromthesaleofClassAcommonstockinthisofferingbythesellingstockholders.
A$1.00increase(decrease)intheassumedinitialpublicofferingpriceof$pershareofClassAcommonstock,the
midpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus,wouldincrease(decrease)thenetproceedstous
fromthisofferingbyapproximately$million,assumingthenumberofsharesofferedbyus,assetforthonthecoverpageof
this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions payable by us. Similarly,
each increase (decrease) of 1.0 million shares in the number of shares of Class A common stock offered by us would increase
(decrease)thenetproceedstousfromthisofferingbyapproximately$million,assuminganinitialpublicofferingpriceof
$pershareofClassAcommonstock,themidpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus,
remainsthesame,andafterdeductingestimatedunderwritingdiscountsandcommissionspayablebyus.
Theprincipalpurposesofthisofferingaretoincreaseourcapitalizationandfinancialflexibilityandcreateapublicmarketforour
ClassA common stock. We intend to use the net proceeds we receive from this offering for general corporate purposes, including
working capital, operating expenses, and capital expenditures. We may use a portion of the net proceeds to acquire complementary
businesses,products,services,ortechnologies.However,wedonothaveagreementsorcommitmentsforanymaterialacquisitionsat
thistime.
WeintendtousesomeofthenetproceedstosatisfytaxwithholdingobligationsrelatedtothevestingandsettlementofRSUs,
whichwillbegintovestafterthecompletionofthisoffering.Wedonotcurrentlyknowtheamountofnetproceedsthatwouldbeused
tosatisfythesetaxwithholdingobligationsbecauseitdependsonmanyfactors,includingoursharepriceonthedateofsettlementand
thenumberofsharesunderlyingRSUsthataresettledonsuchdate.Basedontheassumedinitialpublicofferingpriceof$per
shareofClassAcommonstock,themidpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus,shares
underlyingRSUsvestingonsuchdate,andtheapplicableincometaxrateforcertainofouremployeesfromwhomwewillwithhold
taxes,wewoulduseapproximately$milliontosatisfythesetaxwithholdingobligations.A$1.00increase(decrease)inthe
assumedinitialpublicofferingpriceof$pershareofClassAcommonstock,themidpointoftheestimatedpricerangesetforth
onthecoverpageofthisprospectus,assumingnochangetotheapplicabletaxrates,wouldincrease(decrease)theamountwewouldbe
requiredtopaytosatisfythesetaxwithholdingobligationsbyapproximately$million.
Wewillhavebroaddiscretionoverhowtousethenetproceedsfromthisoffering.Weintendtoinvestthenetproceedstousfrom
theofferingthatarenotusedasdescribedaboveinshortterm,investmentgrade,interestbearinginstruments.
DIVIDENDPOLICY
Wehaveneverdeclaredorpaidcashdividendsonourcapitalstock.Weintendtoretainallavailablefundsandfutureearnings,if
any, to fund the development and expansion of our business, and we do not anticipate paying any cash dividends in the foreseeable
future. The terms of our outstanding credit facility also restrict our ability to pay dividends, and we may also enter into credit
agreementsorotherborrowingarrangementsinthefuturethatwillrestrictourabilitytodeclareorpaycashdividendsonourcapital
stock.
WehavepaidastockdividendofourClassAcommonstockonourcapitalstockinthepastandfromtimetotimeinthefuture
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thetermsofouramendedandrestatedcertificateofincorporationmustbepaidequallytoallstockholders.Anyfuturedetermination
regardingthedeclarationandpaymentofdividends,ifany,willbeatthediscretionofourboardofdirectorsandwilldependonthen
existing conditions, including our financial condition, operating results, contractual restrictions, capital requirements, business
prospects,andotherfactorsourboardofdirectorsmaydeemrelevant.

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CAPITALIZATION
Thefollowingtablesetsforthourcash,cashequivalents,andmarketablesecurities,andcapitalizationasofDecember31,2016:

onanactualbasis

onaproformabasis,givingeffectto(i)theautomaticconversionofallofouroutstandingsharesofconvertiblepreferred
stockotherthanSeriesFPpreferredstockintosharesofClassBcommonstockandtheconversionofSeriesFPpreferred
stock into shares of Class C common stock in connection with our initial public offering, (ii) stockbased compensation
expenseofapproximately$1.1billionassociatedwithoutstandingRSUssubjecttoaperformanceconditionforwhichthe
servicebasedvestingconditionwassatisfiedasofDecember31,2016andwhichwewillrecognizeontheeffectivenessof
our registration statement in connection with a qualifying initial public offering, as further described in Note 1 to our
consolidated financial statements included elsewhere in this prospectus, (iii) the increase in accrued expenses and other
current liabilities and an equivalent decrease in additional paidin capital of $187.2 million in connection with the
withholding tax obligations, based on $16.33 per share, which is the fair value of our common stock as of December 31,
2016, as we intend to issue shares of Class A common stock and Class B common stock on a net basis to satisfy the
associatedwithholdingtaxobligations,(iv)thenetissuanceof7.6millionsharesofClassAcommonstockand5.5million
sharesofClassBcommonstockthatwillvestandbeissuedfromthesettlementofsuchRSUs,(v)theissuanceoftheCEO
award, as described below, and (vi) the filing and effectiveness of our amended and restated certificate of incorporation
which will be in effect on the completion of this offering. The pro forma adjustment related to stockbased compensation
expenseofapproximately$1.1billionhasbeenreflectedasanincreasetoadditionalpaidincapitalandaccumulateddeficit.
Ontheclosingofthisoffering,ourCEOwillreceiveanRSUaward,ortheCEOaward,forsharesofSeriesFPpreferred
stock,whichwillbecomeanRSUcoveringanequivalentnumberofsharesofClassCcommonstockontheclosingofthis
offering.TheCEOawardwillrepresent3.0%ofalloutstandingsharesontheclosingofthisoffering,whichincludesshares
soldbyusinthisofferingandtheemployeeRSUsthatwillvestontheeffectivedateofthisoffering,asdescribedabove.
TheCEOawardwillvestimmediatelyontheclosingofthisofferingandsuchshareswillbedeliveredtoourCEOinequal
quarterlyinstallmentsoverthreeyearsbeginninginthethirdfullcalendarquarterfollowingthisofferingand

on a pro forma as adjusted basis, giving effect to (i) the pro forma adjustments set forth above and (ii) our receipt of
estimatednetproceedsfromthesaleofsharesofClassAcommonstockthatweareofferingatanassumedinitialpublic

offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, after
deductingtheestimatedunderwritingdiscountsandcommissionsandestimatedofferingexpensespayablebyus.

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You should read this table together with Managements Discussion and Analysis of Financial Condition and Results of
Operationsandourconsolidatedfinancialstatementsandrelatednotesincludedelsewhereinthisprospectus.

AsofDecember31,2016
ProForma,
As
Actual ProForma Adjusted
(inthousandsexceptpershareamount)
Cash,cashequivalents,andmarketablesecurities $ 987,368

$ 987,368

$

Stockholdersequity
Convertiblevotingpreferredstock,SeriesA,A1,andB,$0.00001parvalue.
146,962sharesauthorized,issuedandoutstanding,actual,andnoshares
authorized,issuedandoutstanding,proformaandproformaasadjusted $ 1 $ $
Convertiblenonvotingpreferredstock,SeriesC,$0.00001parvalue.16,000
sharesauthorized,issuedandoutstanding,actual,andnosharesauthorized,
issuedandoutstanding,proformaandproformaasadjusted
Convertiblenonvotingpreferredstock,SeriesD,E,andF,$0.00001parvalue.
83,851sharesauthorized,issuedandoutstanding,actual,andnoshares
authorized,issuedandoutstanding,proformaandproformaasadjusted. 2
SeriesFPconvertiblevotingpreferredstock,$0.00001parvalue.260,888shares
authorized,215,888sharesissuedandoutstanding,actual,andnoshares
authorized,issuedandoutstanding,proformaandproformaasadjusted. 2
Preferredstock,$0.00001parvalue.Nosharesauthorized,issued,and
outstanding,actual,and500,000sharesauthorized,nosharesissuedand
outstanding,proformaandproformaasadjusted
ClassAnonvotingcommonstock,$0.00001parvalue.1,500,000shares
authorized,504,902sharesissuedandoutstanding,actual,3,000,000shares
authorized,512,527sharesissuedandoutstanding,proforma3,000,000shares
authorized,sharesissuedandoutstanding,proformaasadjusted 5 5
ClassBvotingcommonstock,$0.00001parvalue.1,500,000sharesauthorized,
31,469sharesissuedandoutstanding,actual,700,000sharesauthorized,
283,817sharesissuedandoutstanding,proforma700,000sharesauthorized,
sharesissuedandoutstanding,proformaasadjusted 3
ClassCvotingcommonstock,$0.00001parvalue.260,888sharesauthorized,no
sharesissuedandoutstanding,actual,260,888sharesauthorized,
215,888sharesissuedandoutstanding,proforma260,888sharesauthorized,
sharesissuedandoutstanding,proformaasadjusted 2
Accumulatedothercomprehensiveincome(loss) (2,057) (2,057)
Accumulateddeficit
(1,207,862)

(2,305,851)

Totalstockholdersequity
$ 1,518,914

$ 1,331,722

$

Totalcapitalization $ 1,518,914
$ 1,331,722
$

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A$1.00increase(decrease)intheassumedinitialpublicofferingpriceof$pershareofClassAcommonstock,themidpoint
oftheestimatedpricerangesetforthonthecoverpageofthisprospectus,wouldincrease(decrease)eachofourproformaasadjusted
cash, cash equivalents, and marketable securities, additional paidin capital, total stockholders equity, and total capitalization by
approximately$million,assumingthenumberofsharesofferedbyus,assetforthonthecoverpageofthisprospectus,remains
thesame,andafterdeductingestimatedunderwritingdiscountsandcommissionspayablebyus.Similarly,eachincrease(decrease)of
1.0millionsharesinthenumberofsharesofClassAcommonstockofferedbyuswouldincrease(decrease)eachofourproformaas
adjustedcash,cashequivalents,andmarketablesecurities,additionalpaidincapital,totalstockholdersequity,andtotalcapitalization
byapproximately$million,assumingtheassumedinitialpublicofferingpriceof$pershareofClassAcommonstock,the
midpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus,remainsthesame,andafterdeductingestimated
underwritingdiscountsandcommissionspayablebyus.
ThenumberofsharesofClassAcommonstock,ClassBcommonstock,andClassCcommonstockthatwillbeoutstandingafter
this offering (which include shares of Class A common stock and Class B common stock to be net issued on the vesting of certain
outstanding RSUs subject to a performance condition in connection with this offering) is based on 512,527,443 shares of ClassA
common stock, 283,817,489 shares of Class B common stock, and 215,887,848 shares of Class C common stock outstanding as of
December31,2016,andexcludes:

21,185,669sharesofClassBcommonstockissuableontheexerciseofstockoptionsoutstandingasofDecember31,2016,
underour2012Planwithaweightedaverageexercisepriceof$2.33pershareand21,185,669sharesofClassAcommon
stockissuableontheexerciseofsuchoptionsundertheClassADividend

18,068,299sharesofClassBcommonstockissuableonthevestingandsettlementofRSUsoutstandingasofDecember31,
2016,underour2012Planand18,068,299sharesofClassAcommonstockissuableonthevestingandsettlementofsuch
RSUsundertheClassADividend

1,266,433sharesofClassAcommonstockissuableontheexerciseofstockoptionsoutstandingasofDecember31,2016,

70,099,641sharesofClassAcommonstockissuableonthevestingandsettlementofRSUsoutstandingasofDecember31,
2016underour2014Planand49,834,987sharesofClassAcommonstockissuableonthevestingandsettlementofsuch

sharesofSeriesFPpreferredstocksubjecttoanRSUawardtobegrantedtoourCEOontheclosingofthisoffering,or
theCEOaward,suchRSUswillbecomeanRSUcoveringanequivalentnumberofsharesofClassCcommonstockonthe
closingofthisoffering

355,522,498sharesofClassAcommonstockreservedforfutureissuanceunderour2017Plan,whichwillbecomeeffective

oncetheregistrationstatementofwhichthisprospectusformsapartisdeclaredeffective,including:

anaggregateof42,653,205sharesofClassAcommonstockandClassBcommonstockreservedforissuanceunder
our2012Planand2014Plan,asofDecember31,2016,whichshareswillbeaddedtothesharesreservedunderthe
2017Plan,plus

upto225,599,185additionalsharesthatmaybeaddedtothe2017Planontheexpiration,termination,forfeiture,or
otherreacquisitionofanysharesofClassAcommonstockandClassBcommonstockissuableontheexerciseof
stockoptionsoutstandingorvestingandsettlementofRSUsunderthe2012Planor2014Plan,plus

anyautomaticincreasesinthenumberofsharesofClassAcommonstockreservedforfutureissuanceunderthe2017

Plan

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16,484,690sharesofClassAcommonstockreservedforissuanceunderourESPP,whichwillbecomeeffectiveoncethe
registrationstatement,ofwhichthisprospectusformsapart,isdeclaredeffective,andanyautomaticincreasesinthenumber
ofsharesofClassAcommonstockreservedforfutureissuanceunderourESPP

2,500,000 shares of our Class A common stock reserved for future issuance to our employees and consultants in France

underour2014Planand

uptoanaggregateof13,000,000sharesofourClassAcommonstockthatweplantodonatetotheSnapFoundationafter

thisofferingoveraperiodof15to20years.

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DILUTION
IfyouinvestinourClassAcommonstockinthisoffering,yourinterestwillbedilutedtotheextentofthedifferencebetweenthe
initial public offering price per share of Class A common stock and the pro forma as adjusted net tangible book value per share
immediatelyafterthisoffering.
OurproformanettangiblebookvalueasofDecember31,2016was$929.5million,or$0.92pershare.Proformanettangible
bookvaluepersharerepresentstheamountofourtotaltangibleassetslessourtotalliabilitiesdividedbythenumberofoursharesof
commonstockoutstandingasofDecember31,2016,aftergivingeffecttotheautomaticconversionofalloutstandingsharesofour
Series FP preferred stock into an aggregate of 215,887,848 shares of Class C common stock and all other outstanding shares of
preferredstockintoanaggregateof246,813,076sharesofClassBcommonstock,andthenetissuanceof7,625,096sharesofClassA
commonstockand5,535,592sharesofClassBcommonstockthatwillvestandbeissuedfromthesettlementofcertainoutstanding
RSUssubjecttoaperformanceconditionforwhichtheservicebasedvestingconditionwassatisfied,ineachcaseimmediatelyonthe
closingofthisoffering.
AftergivingeffecttothesalebyusofsharesofClassAcommonstockinthisofferingatanassumedinitialpublic
offeringpriceof$pershare,themidpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus,andafter
deductingestimatedunderwritingdiscountsandcommissionsandestimatedofferingexpensespayablebyus,ourproformaasadjusted
nettangiblebookvalueasofDecember31,2016wouldhavebeen$billion,or$pershare.Thisamountrepresentsan
immediate increase in pro forma as adjusted net tangible book value of $ per share to our existing stockholders and an
immediatedilutioninproformaasadjustednettangiblebookvalueof$persharetonewinvestorspurchasingClassAcommon
stock in this offering. We determine dilution by subtracting the pro forma as adjusted net tangible book value per share after this
offeringfromtheamountofcashthatanewinvestorpaidforashareofClassAcommonstock.Thefollowingtableillustratesthis
dilutiononapersharebasis:

Assumedinitialpublicofferingpricepershare $
ProformanettangiblebookvaluepershareasofDecember31,2016 $0.92
Increaseinproformaasadjustednettangiblebookvaluepershareattributabletonewinvestors
purchasingsharesinthisoffering

Proformaasadjustednettangiblebookvaluepershareafterthisoffering

Dilutioninproformaasadjustednettangiblebookvaluepersharetonewinvestorsinthisoffering $

Thedilutioninformationdiscussedaboveisillustrativeonlyandmaychangebasedontheactualinitialpublicofferingpriceand
othertermsofthisoffering.A$1.00increase(decrease)intheassumedinitialpublicofferingpriceof$pershareofClassA
commonstock,themidpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus,wouldincrease(decrease)our
proformaasadjustednettangiblebookvaluepershareafterthisofferingby$pershareandincrease(decrease)thedilutionto
newinvestorsby$pershare,ineachcaseassumingthenumberofsharesofClassAcommonstockofferedbyus,assetforth
onthecoverpageofthisprospectus,remainsthesame,andafterdeductingestimatedunderwritingdiscountsandcommissionspayable
byus.Similarly,eachincreaseordecreaseof1.0millionsharesinthenumberofsharesofClassAcommonstockofferedbyuswould
increase(decrease)ourproformaasadjustednettangiblebookvaluebyapproximately$pershareanddecrease(increase)the
dilutiontonewinvestorsbyapproximately$pershare,ineachcaseassumingtheassumedinitialpublicofferingpriceof
$pershare,themidpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus,remainsthesame,andafter
deductingestimatedunderwritingdiscountsandcommissionsandestimatedofferingexpensespayablebyus.
Thefollowingtablesummarizes,asofDecember31,2016,onaproformaasadjustedbasisasdescribedabove,thenumberof
sharesofcommonstockpurchasedfromus,thetotalconsiderationandtheaverageprice

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per share (i) paid to us by existing stockholders, and (ii) to be paid by new investors acquiring our ClassA common stock in this
offeringatanassumedinitialpublicofferingpriceof$pershare,themidpointoftheestimatedpricerangesetforthonthe
cover page of this prospectus, before deducting estimated underwriting discounts and commissions and estimated offering expenses
payablebyus.

AveragePrice
SharesAcquired TotalConsideration PerShare
Number Percent Amount Percent
Existingstockholders % $ % $
Newinvestors

Totals
100.0%
$ 100.0%

Each$1.00increase(decrease)intheassumedinitialpublicofferingpriceof$pershare,themidpointoftheestimated
pricerangesetforthonthecoverpageofthisprospectus,wouldincrease(decrease)thetotalconsiderationpaidbynewinvestorsand
totalconsiderationpaidbyallstockholdersbyapproximately$million,assumingthatthenumberofsharesofClassAcommon
stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting
discountsandcommissionspayablebyus.
Salesbythesellingstockholdersinthisofferingwillcausethenumberofsharesheldbyexistingstockholderstobereducedto
shares,or%ofthetotalnumberofsharesofourcommonstockoutstandingfollowingthecompletionofthisoffering,and
willincreasethenumberofsharesheldbynewinvestorstoshares,or%ofthetotalnumberofsharesoutstandingfollowing
thecompletionofthisoffering.
If the underwriters exercise in full their option to purchase additional shares from certain selling stockholders, the number of
sharesheldbyexistingstockholderswillbereducedtoshares,or%ofthetotalnumberofsharesofourcommonstock
outstandingfollowingthecompletionofthisoffering,andwillincreasethenumberofsharesheldbynewinvestorstoshares,
or%ofthetotalnumberofsharesoutstandingfollowingthecompletionofthisoffering.
ThenumberofsharesofClassAcommonstock,ClassBcommonstock,andClassCcommonstockthatwillbeoutstandingafter
this offering (which include shares of Class A common stock and Class B common stock to be net issued on the vesting of certain
outstanding RSUs subject to a performance condition in connection with this offering) is based on 512,527,443 shares of ClassA
common stock, 283,817,489 shares of Class B common stock, and 215,887,848 shares of Class C common stock outstanding as of
December31,2016,andexcludes:

21,185,669sharesofClassBcommonstockissuableontheexerciseofstockoptionsoutstandingasofDecember31,2016,

18,068,299sharesofClassBcommonstockissuableonthevestingandsettlementofRSUsoutstandingasofDecember31,
2016,underour2012Planand18,068,299sharesofClassAcommonstockissuableonthevestingandsettlementofsuch

1,266,433sharesofClassAcommonstockissuableontheexerciseofstockoptionsoutstandingasofDecember31,2016,

70,099,641sharesofClassAcommonstockissuableonthevestingandsettlementofRSUsoutstandingasofDecember31,
2016underour2014Planand49,834,987sharesofClassAcommonstockissuableonthevestingandsettlementofsuch

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sharesofSeriesFPpreferredstocksubjecttoanRSUawardtobegrantedtoourCEOontheclosingofthis
offering,ortheCEOaward,suchRSUswillbecomeanRSUcoveringanequivalentnumberofsharesofClassCcommon
stockontheclosingofthisoffering

355,522,498sharesofClassAcommonstockreservedforfutureissuanceunderour2017Plan,whichwillbecomeeffective

oncetheregistrationstatement,ofwhichthisprospectusformsapart,isdeclaredeffective,including:

anaggregateof42,653,205sharesofClassAcommonstockandClassBcommonstockreservedforissuanceunder
our2012Planand2014Plan,asofDecember31,2016,whichshareswillbeaddedtothesharesreservedunderthe
2017Plan,plus

upto225,599,185additionalsharesthatmaybeaddedtothe2017Planontheexpiration,termination,forfeiture,or
otherreacquisitionofanysharesofClassAcommonstockandClassBcommonstockissuableontheexerciseof
stockoptionsoutstandingorvestingandsettlementofRSUsunderthe2012Planor2014Plan,plus

anyautomaticincreasesinthenumberofsharesofClassAcommonstockreservedforfutureissuanceunderthe2017

Plan

16,484,690sharesofClassAcommonstockreservedforissuanceunderourESPP,whichwillbecomeeffectiveoncethe
registrationstatement,ofwhichthisprospectusformsapart,isdeclaredeffective,andanyautomaticincreasesinthenumber
ofsharesofClassAcommonstockreservedforfutureissuanceunderourESPP

2,500,000 shares of our Class A common stock reserved for future issuance to our employees and consultants in France

underour2014Planand

uptoanaggregateof13,000,000sharesofourClassAcommonstockthatweplantodonatetotheSnapFoundationafter

thisofferingoveraperiodof15to20years.
To the extent that any outstanding options are exercised, outstanding RSUs settle, new options or RSUs are issued under our
stockbasedcompensationplans,orweissueadditionalsharesofcommonstockinthefuture,therewillbefurtherdilutiontoinvestors
participatinginthisoffering.IfalloutstandingoptionsorRSUsunderour2012Planand2014PlanasofDecember31,2016were
exercised or settled, then our existing stockholders, including the holders of these options, would own % and our new investors
would own % of the total number of shares of our ClassA common stock, Class B common stock, and Class C common stock
outstandingonthecompletionofthisoffering.

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SELECTEDCONSOLIDATEDFINANCIALDATA
Thefollowingtablesummarizescertainselectedconsolidatedfinancialdata.Wehavederivedtheselectedconsolidatedbalance
sheetdataasofDecember31,2015and2016andconsolidatedstatementsofoperationsdatafortheyearsendedDecember31,2015
and 2016 from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results are not
necessarilyindicativeofourresultsinanyfutureperiod.Youshouldreadthefollowingselectedconsolidatedfinancialdatatogether
with Managements Discussion and Analysis of Financial Condition and Results of Operations and our consolidated financial
statementsandtherelatednotesincludedelsewhereinthisprospectus.Theselectedconsolidatedfinancialdatainthissectionarenot
intendedtoreplaceourconsolidatedfinancialstatementsandtherelatednotesandarequalifiedintheirentiretybytheconsolidated
financialstatementsandrelatednotesincludedelsewhereinthisprospectus.

2015 2016
(inthousands,exceptper
shareamounts)
Revenue $ 58,663 $ 404,482
Costsandexpenses:

148,600

165,160


440,392

924,867



(152)

(4,568)



7,589

7,080
Netloss $(372,893)
$(514,643)

preferredstockholders(1):
Basic $ (0.51) $

(0.64)

Diluted $ (0.51) $

(0.64)

ProformanetlosspershareattributabletoClassA,ClassB,andClassCcommonstockholders(1):
Basic $ (0.53)

Diluted $ (0.53)

OtherFinancialInformation:
AdjustedEBITDA(2) $(292,898) $(459,428)
FreeCashFlow(3) $(325,827) $(677,686)

(1) SeeNote15ofthenotestoourconsolidatedfinancialstatementsincludedelsewhereinthisprospectusforadescriptionofhow
wecomputebasicanddilutednetlosspershareattributabletoClassAandClassBcommonstockholdersandSeriesD,E,F,and
FPpreferredstockholdersandproformabasicanddilutednetlosspershareattributabletoClassA,ClassB,andClassCcommon
stockholders.Therights,includingtheliquidationanddividendrights,ofClassAandClassBcommonstockandtheSeriesD,E,
F,andFPpreferredstockaresubstantiallyidenticalotherthanvotingrights.Accordingly,theClassAandClassBcommonstock
andtheSeriesD,E,F,andFPpreferredstockshareinournetlosses.

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(2) SeeAdjustedEBITDAandFreeCashFlowbelowformoreinformationandforareconciliationofAdjustedEBITDAtonet
loss,themostdirectlycomparablefinancialmeasurecalculatedandpresentedinaccordancewithGAAP.
(3) SeeAdjustedEBITDAandFreeCashFlowbelowformoreinformationandforareconciliationofFreeCashFlowtonet
cash used in operating activities, the most directly comparable financial measure calculated and presented in accordance with
GAAP.

December31,
2015 2016
(inthousands)
ConsolidatedBalanceSheetData:
Cash,cashequivalents,andmarketablesecurities $ 640,810 $ 987,368
Workingcapital 536,306 1,023,241
Totalassets 938,936 1,722,792
Totalliabilities 174,791 203,878
Accumulateddeficit (693,219) (1,207,862)
Totalstockholdersequity 764,145 1,518,914
AdjustedEBITDAandFreeCashFlow
Tosupplementourconsolidatedfinancialstatements,whicharepreparedandpresentedinaccordancewithGAAP,weusecertain
nonGAAP financial measures, as described below, to understand and evaluate our core operating performance. These nonGAAP
financialmeasures,whichmaybedifferentthansimilarlytitledmeasuresusedbyothercompanies,arepresentedtoenhanceinvestors
overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial
informationpreparedandpresentedinaccordancewithGAAP.
WeusethenonGAAPfinancialmeasureofAdjustedEBITDA,whichisdefinedasnetincome(loss),excludinginterestincome
interest expense other income (expense), net income tax benefit (expense) depreciation and amortization and stockbased
compensation expense. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be
maskedbytheeffectoftheexpensesthatweexcludeinAdjustedEBITDA.
WeusethenonGAAPfinancialmeasureofFreeCashFlow,whichisdefinedasnetcashusedinoperatingactivities,reducedby
purchasesofpropertyandequipment.WebelieveFreeCashFlowisanimportantliquiditymeasureofthecashthatisavailable,after
capital expenditures, for operational expenses and investment in our business and is a key financial indicator used by management.
Additionally, we believe that Free Cash Flow is an important measure since we use thirdparty infrastructure partners to host our
services and therefore we do not incur significant capital expenditures to support revenue generating activities. Free Cash Flow is
useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and
obligationsaremet,cashcanbeusedtomaintainastrongbalancesheetandinvestinfuturegrowth.
WebelievethatbothAdjustedEBITDAandFreeCashFlowprovideusefulinformationaboutourfinancialperformance,enhance
theoverallunderstandingofourpastperformanceandfutureprospects,andallowforgreatertransparencywithrespecttokeymetrics
used by our management for financial and operational decisionmaking. We are presenting the nonGAAP measures of Adjusted
EBITDAandFreeCashFlowtoassistinvestorsinseeingourfinancialperformancethroughtheeyesofmanagement,andbecausewe
believethatthesemeasuresprovideanadditionaltoolforinvestorstouseincomparingourcorefinancialperformanceovermultiple
periodswithothercompaniesinourindustry.

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These nonGAAP financial measures should not be considered in isolation from, or as substitutes for, financial information
prepared in accordance with GAAP. There are a number of limitations related to the use of these nonGAAP financial measures as
comparedtotheclosestcomparableGAAPmeasure.Someoftheselimitationsarethat:

Adjusted EBITDA excludes certain recurring, noncash charges such as deprecation of fixed assets and amortization of
acquiredintangibleassetsand,althoughthesearenoncashcharges,theassetsbeingdepreciatedandamortizedmayhaveto
bereplacedinthefuture

AdjustedEBITDAexcludesstockbasedcompensationexpense,whichhasbeen,andwillcontinuetobefortheforeseeable

future,asignificantrecurringexpenseinourbusinessandanimportantpartofourcompensationstrategy

AdjustedEBITDAdoesnotreflecttaxpaymentsthatreducecashavailabletousand

FreeCashFlowdoesnotreflectourfuturecontractualcommitments.
ThefollowingtablepresentsareconciliationofAdjustedEBITDAtonetloss,themostcomparableGAAPfinancialmeasure,for
eachoftheperiodspresented:

YearEnded
December31,
2015 2016
(inthousands)
AdjustedEBITDAreconciliation:
Netloss $(372,893) $(514,643)
Add(deduct):
Interestincome (1,399) (4,654)
Interestexpense 1,424
Other(income)expense,net 152 4,568
Incometax(benefit)expense (7,589) (7,080)
Depreciationandamortization 15,307 29,115
Stockbasedcompensationexpense

73,524

31,842

AdjustedEBITDA $(292,898)
$(459,428)

The following table presents a reconciliation of Free Cash Flow to net cash used in operating activities, the most comparable
GAAPfinancialmeasure,foreachoftheperiodspresented:

YearEnded
December31,
2015 2016
(inthousands)
FreeCashFlowreconciliation:
Netcashusedinoperatingactivities $(306,622) $(611,245)
Less:
Purchasesofpropertyandequipment (19,205) (66,441)

FreeCashFlow $(325,827) $(677,686)

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MANAGEMENTSDISCUSSIONANDANALYSISOFFINANCIALCONDITIONAND
RESULTSOFOPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with
Selected Consolidated Financial Data and our consolidated financial statements, related notes, and other financial information
appearing in this prospectus. In addition to historical consolidated financial information, the following discussion contains forward
lookingstatementsthatreflectourplans,estimates,andbeliefsthatinvolvesignificantrisksanduncertainties.Ouractualresultscould
differ materially from those discussed in the forwardlooking statements. Factors that could cause or contribute to these differences
includethosediscussedbelowandelsewhereinthisprospectus,particularlyinRiskFactorsandSpecialNoteRegardingForward
LookingStatements.
Unless otherwise stated, statistical information regarding our users and their activities is determined by calculating the daily
averageoftheselectedactivityforthemostrecentlycompletedquarterincludedinthisprospectus.
Overview
Webelievethatreinventingthecamerarepresentsourgreatestopportunitytoimprovethewaythatpeopleliveandcommunicate.
images.WecalleachofthoseshortvideosorimagesaSnap.Onaverage,158millionpeopleuseSnapchatdaily,andover2.5billion
Snapsarecreatedeveryday.Onaverage,ourusersvisitSnapchatmorethan18timesperday,andspend25to30minutesonSnapchat
everyday.
Our strategy is to focus on innovation and take risks to improve our products. We do this in an effort to drive daily user
engagement,whichwecanthenmonetizethroughadvertising.Weoftencreatenewtechnologiesandhighengagementproductsthat
often require highend mobile devices and highspeed cellular internet, and consequently the majority of our users come from
developedmarkets.Globaladvertisingspendespeciallymobileadvertisingspendisextremelyconcentratedamongafewcountries,
andouradvertisingbusinesshasbenefittedgreatlyfromourstrongpenetrationinthesecountries.Thismeansthatwecanscaleour
businessinmarketswherewehavethehighestrevenueperuserandcapitalefficiency,whichinturngeneratescashflowthatwewill
investintofutureproductinnovation.
For a discussion of the key opportunities and challenges we face in growing our business, see Factors Impacting our
Business.
WeareheadquarteredinVenice,California,andhaveseveralofficesaroundtheworld.
DailyActiveUsers
WedefineaDailyActiveUser,orDAU,asaregisteredSnapchatuserwhoopenstheSnapchatapplicationatleastonceduringa
defined24hourperiod.WemeasureaverageDailyActiveUsersforaparticularquarterbycalculatingtheaverageDailyActiveUsers
forthatquarter.WealsobreakoutDailyActiveUsersbygeographybecausecertainmarketshaveagreaterrevenueopportunityand
lowerbandwidthcosts.
WeassessthehealthofourbusinessbymeasuringDailyActiveUsersbecausewebelievethatthismetricisthemostreliableway
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to invest their time, energy, and creativity in our products. Daily engagement also influences our advertising inventory. We had
158 million Daily Active Users on average in the quarter ended December 31, 2016, an increase of 48% as compared to our Daily
ActiveUsersinthequarterendedDecember31,2015.
TherateofnetadditionalDailyActiveUserswasrelativelyflatintheearlypartofthequarterendedDecember31,2016,and
acceleratedinthemonthofDecember.AlthoughwehavehistoricallyexperiencedlumpinessinthegrowthofourDailyActiveUsers,
webelievethattheflatgrowthintheearlypartofthequarterwasprimarilyrelatedtoacceleratedgrowthinuserengagementearlierin
theyear,diminishedproductperformance,andincreasedcompetition.
TherateofnetadditionalDailyActiveUsersacceleratedinthefirsthalfof2016comparedtothesecondhalfof2015,largelydue
toincreaseduserengagementfromproductlaunchesandincreasedadoptionratesamongolderdemographicsandinternationalmarkets.
This created a higher baseline of Daily Active Users heading into the third and fourth quarters, so incremental net additions within
these quarters were more difficult even with strong yearoveryear growth. Additionally, in mid2016, we launched several products
andreleasedmultipleupdates,whichintroducedanumberoftechnicalissuesthatdiminishedtheperformanceofourapplication.We
believetheseperformanceissuesresultedinareductioninthegrowthofourDailyActiveUsers,particularlyamongAndroidusersand
regionswithahigherpercentageofAndroiddevices.Finally,wealsosawincreasedcompetitionbothdomesticallyandinternationally
in2016,asmanyofourcompetitorslaunchedproductswithsimilarfunctionalitytoours.
InthequarterendedDecember31,2016,weaddressedmanyofthetechnicalissuesintroducedearlierintheyearandlaunched
various product updates. We believe these efforts contributed to the increase in the rate of net additional Daily Active Users in
December.However,thereisalsoastrongdegreeofseasonalityinDecemberduetoincreasedusageduringtheholidayseason,which
webelievedroveasignificantportionofthenetadditionalDailyActiveUsersinthequarterendedDecember31,2016.Additionally,
thisseasonalgrowthtypicallycarriesthroughtheearlypartofthefirstquarter,meaningthatweexpecttherateofnetadditionalDaily
ActiveUserstobeimpactedby,amongotherthings,shorttermholidayseasonalitythatwedonotexpecttocontinuethroughfuture
months.

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QuarterlyAverageDailyActiveUsers(1)
(inmillions)

(1) ForadiscussionofhowwecalculatedDAUspriortoJune2015,seeMarket,Industry,andOtherData.
(2) NorthAmericaincludesMexicoandtheCaribbean.
(3) EuropeincludesRussiaandTurkey.
ThechartsabovepresentourhistoricalDailyActiveUsersbyusingthedailyaverageacrosseachquarterreported.Webelieve
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perspective on our business for several reasons. Our focus on driving Daily Active Users through product innovation means that
launchingandchangingourproductscanhaveasignificantimpactonDailyActiveUsersinanygivenmonth.Becausetheseproduct
launchesandchangesmayoccurduringanymonthofthequarter,wedonotbelieveitishelpfulforonlythelastmonthofaquarterto
bethemeasurethatinvestorsusetoassessuserengagement,sinceitwouldexcludetheimpactofhigherorlowerDailyActiveUsers
earlier in the quarter. Additionally, presenting Daily Active Users as a daily average across a quarter is consistent with how we use
DailyActiveUsersindeterminingAverageRevenueperUser,orARPU.
Werecognizethatothercompanieshavereportedtheirdailyactiveusersbyusingthedailyaverageforonlythelastmonthof
eachquarterreported.Forcomparison,wehavepresentedourDailyActiveUserscalculatedunderthisalternativemethodologyinthe
tablebelow.WebelievethatreportinguserengagementdatabasedonaverageDailyActiveUsersacrossthefullquarterprovidesa
moremeaningfulmetricforinvestorstoassessourbusinessforthereasonssetforthabove,andinthefutureweplantopresentDaily
ActiveUsersexclusivelyasthedailyaverageacrossthequarter.

Global NorthAmerica(2) Europe(3) RestofWorld
LastMonth DAUs YOY DAUs YOY DAUs YOY DAUs YOY
ofQuarter(1) (inmillions) Growth (inmillions) Growth (inmillions) Growth (inmillions) Growth
Mar14 50 415% 27 259% 16 1,065% 7 856%
June14 59 173 31 116 19 265 10 319
Sept14 65 126 32 82 21 176 12 258
Dec14 74 92 36 56 24 118 15 214
Mar15 81 62 38 38 27 73 16 134
June15 89 51 41 33 29 52 20 103
Sept15 99 53 46 42 31 51 22 90
Dec15 110 48 50 39 35 45 26 77
Mar16 130 60 57 50 42 53 32 95
June16 148 66 63 55 48 65 37 92
Sept16 154 55 66 43 50 59 38 74
Dec16 161 46 69 39 53 51 39 53

(1) ForadiscussionofhowwecalculatedDAUspriortoJune2015,seeMarket,Industry,andOtherData.
Monetization
We monetize our business primarily through advertising. Our advertising products include Snap Ads and Sponsored Creative
ToolslikeSponsoredLensesandSponsoredGeofilters.Whileouradvertisingbusinessisstillinitsearlystages,itisgrowingrapidly.
IntheyearendedDecember31,2016,werecordedrevenueof$404.5million,ascomparedtorevenueof$58.7millionfortheyear
endedDecember31,2015,representingmorethana6xyearoveryearincrease.
WemeasureprogressinouradvertisingbusinessusingARPUbecauseithelpsusunderstandtherateatwhichweremonetizing
ourdailyuserbase.WedefineARPUasquarterlyrevenuedividedbytheaverageDailyActiveUsers.
For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on a determination of the
geographiclocationinwhichadvertisingimpressionsaredelivered,asthisapproximatesrevenuebasedonuseractivity.Thisdiffers
fromthepresentationofourrevenuebygeographyinthenotestoourconsolidatedfinancialstatements,whererevenueisbasedonthe
billingaddressoftheadvertisingcustomer.

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QuarterlyAverageRevenueperUser

[GRAPHIC]


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QuarterlyRevenuebyGeography(1)
(inthousands)

NorthAmerica Europe Restof
Global (2) (3) World
Revenue Revenue Revenue Revenue
Q115 $ 3,920 $ 3,911 $ 9 $
Q215 5,300 5,216 79 5
Q315 16,725 15,859 860 6
Q415 32,718 31,364 1,257 97
Q116 38,798 35,898 2,702 198
Q216 71,798 65,219 6,236 343
Q316 128,204 114,755 11,791 1,658
Q416 165,682 145,356 14,665 5,661

(1) Total revenue for geographic reporting is apportioned to each region based on our determination of the geographic location in
whichadvertisingimpressionsaredelivered,asthisapproximatesrevenuebasedonuseractivity.Thisallocationisconsistentwith
how we determine ARPU. This differs from the presentation of our revenue by geography in the notes to our consolidated
financialstatements,whererevenueisbasedonthebillingaddressoftheadvertisingcustomer.
OurProducts
SnapchatopensdirectlyintotheCamera,makingiteasytocreateaSnapandsendittofriends.Snapsaredeletedbydefault,so
thereisalotlesspressuretolookprettyorperfectwhencreatingandsharingimagesonSnapchat.WeofferlotsoffunCreativeTools
likeLensesandGeofiltersthatallowourcommunitytoexpressthemselvesthroughSnaps.Lensesareinteractiveanimationsthatare
overlaidonapersonsfaceortheworldaroundthem.GeofiltersareartisticfiltersavailableafteraSnapistakenatpredefinedtimes
andlocations.PeoplecansendSnapsbackandforthwithfriendsusingourChatService,whichalsosupportstextbasedChat,voice
andvideocalling,andstickers.
StoriesarecollectionsofSnapsthatplayinchronologicalorder,andaredeletedwithin24hours.DifferenttypesofStoriesare
told from different perspectives. We started with My Story for each individual user, expanded to community Live Stories, and then
introducedPublisherStoriescreatedbyourexperiencedpublisherpartners.
InadditiontotheSnapchatapplication,therearetwootherwaystomakeSnaps:PublisherToolsandSpectacles.PublisherTools
areourgrowingsuiteofcontenttoolsforpartnerstobuild,edit,andpublishSnapsandattachmentsbasedonuniqueeditorialcontent.
OurlatestefforttoreinventthecameraisSpectacles,oursunglassesthatmakeSnaps.
FactorsImpactingourBusiness
UserEngagement
Dailyuserengagementwithourproductsisacriticalcomponenttoourbusinessbecauseitinfluencesouradvertisinginventoryas
wellasourexpenses.
Weexpectgrowthtocontinuetocomefromdevelopedmarketswithreadilyavailablehighspeedcellularinternetandhighend
mobile devices because we prioritize our investment in product innovation that often requires a lot of bandwidth and intensive
processing.Webenefitfromthisbecauseglobaladvertisingspendtendstobeconcentratedamongmanyofthesemarkets,andhosting
costsareoftenlowerduetolessexpensivebandwidth.Webelievethatourgrowthpotentialwillfollowthesizeoftheglobalpopulation
withaccesstostronginfrastructureandtechnology,andourusergrowthwillslowaswereachhigherpenetrationinthesemarkets.

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We also face regulatory challenges that may affect our ability to grow in certain markets. For example, we have very limited
access to the China market, as we have not yet established an operating presence in China to support Snapchat. Access to Google,
whichcurrentlypowersourinfrastructure,isrestrictedinChina.Additionally,certainproductslikeSpectaclesmaynotbeavailablein
alllocationsduetolocallawsandregulations.
Inthepast,wehavebeenabletoincreaseouruserengagementwiththeintroductionofnewproducts,likeStoriesandLenses,that
encouragepeopletoinvesttheirtime,energy,andcreativityintoourplatform.However,ourinvestmentcycleinproductinnovationis
lumpyandunpredictable.Opportunitiestocreatenewproductsarenotspreadoutevenlyandrequirevaryinginvestmentsintimeand
resources. Additionally, different products have different rates of user adoption once launched. This means that growth in user
engagement,asmeasuredbyDailyActiveUsers,hasbeen,andwillcontinuetobe,lumpyandunpredictable.
Weinvestheavilyinfutureproductinnovationandtakeriskstoimproveourcameraplatforminanefforttodrivelongtermuser
engagement. Sometimes this means sacrificing shortterm engagement to introduce products that might change the way people use
Snapchat.Ourproductsoftenusenewtechnologiesandrequirepeopletochangetheirbehavior,suchasusingacameratotalkwith
theirfriends.Thismeansthatourproductstakealotoftimeandmoneytodevelop,andmighthaveslowadoptionrates.Italsooften
takestimeforustooptimizetheperformanceofourproductsoncelaunched.Whilenotallofourinvestmentswillpayoffinthelong
run,wearewillingtotaketheserisksinanattempttocreatethebestandmostdifferentiatedproductsandexperiences.Additionally,
thehighlevelofbandwidthusedbymanyofourservicesmeansthatanincreaseinouruserbaseandengagementwillalsoincreaseour
hostingcosts.
AbilitytoMonetizeUsersinTopAdvertisingMarkets
Wemonetizeourdailyuserengagementprimarilythroughadvertising.Ourabilitytogrowourrevenuesdependsinlargeparton
our ability to increase ARPU in top advertising markets. There are a number of factors that we believe will help us grow ARPU,
including the demographics of our audience, the effectiveness of our advertising products, and our delivery and measurement
capabilities.
Whilethesefactorshelpusdrivevalueforouradvertisers,thepricingofouradvertisingproductsisalsoaffectedbyotherfactors
like the highly competitive nature of our industry. From time to time, we review and adjust the pricing of our advertising offerings
takingintoaccountallofthesevariables.
OurAudience
Ourusersareconcentratedamongtopadvertisingmarkets.Theglobaladvertisingmarketisexpectedtogrowfrom$652billionin
2016to$767billionin2020,withthetoptencountriescommandingover70%ofoverallworldwideadvertisingspendandnearly85%
ofmobileadvertisingspend,accordingtoIDC.Webenefitfromhavingover60%ofour158millionDailyActiveUserscomefrom
countriesonthislist,includingover60millionDailyActiveUsersintheUnitedStatesandCanada,andover10millionDailyActive
UsersintheUnitedKingdom.
Sincetheentiretyofouravailableadvertisinginventoryisonmobile,ourabilitytogrowourrevenueisinfluencedbythesizeand
growthofthemobileadvertisingmarket.IDCprojectsthatmobileadvertisingspendwillgrownearly3xfrom$66billionin2016to
$196 billion in 2020, while all other advertising spend will decrease by approximately $15 billion during the same time period. We
believethataspeoplesattentionshiftsfromtraditionalmedialikedesktopandtelevisiontomobile,significantadvertisingbudgetswill
similarly be transferred to mobile advertising.Additionally, this shift of attention to mobile is particularly prevalent among younger
audiences, with people aged 18 to 24our largest age group among our U.S. Daily Active Usershaving spent 35% less time
watchingtraditional(liveandtimeshifted)televisioninanaveragemonthduringthesecondquarterof2016comparedtothesecond
quarterof2010,accordingtoNielsen.

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AdvertisingProducts
Thesameteamthatdesignsourconsumerproductsalsohelpsdesignouradvertisingproducts.Thatmeansthatwecantakethe
thingswelearnwhilecreatingourconsumerproductsandapplythemtobuildinginnovativeandengagingadvertisingproductsthatfeel
familiartoourcommunity.SnapAds,forexample,arefullscreenvideoswithsound,inthesameformatastheSnapsthatdrivethe
video consumption on our platform. Furthermore, Sponsored Creative Tools leverage the popularity of Lenses and Geofilters to let
peopleengagecreativelywithbrands.
We believe that our ability to continue creating engaging user experiences and successfully converting that engagement into
advertisingproductswillinfluencetheeffectivenessofourfutureadvertisingproducts.
DeliveryandMeasurement
Ourabilitytoshowadvertisingthatisrelevanttoauserisakeyfactorindrivingareturnonadvertisingspend.Wearealways
tryingtoimproveouradvertisingdeliveryframeworkandscaleourbusinesstomakebetterandmoreefficientdecisions.
ProvingeffectivenesstoadvertisersisalsoamajordriverofARPUbecauseithelpsthemfeelmorecomfortablespendingmore
money to reach users on our platform. We offer thirdparty and inhouse solutions focusing on view verification, reach verification,
changesinuserperceptionofabrand,andchangesinbehavior.
InvestinginProductInnovation
Wecompeteforengagementinanenvironmentwhereanyonecandistributeproductsinstantlyandoftenatnocosttotheuser.We
thinkthebestwaytocompeteistomakegreatproductsthatpeoplewillwanttouse.Assuch,weinvestheavilyinproductinnovation
in an effort to drive user engagement. Since we monetize primarily through advertising, incremental user engagement also means
increasedadvertisinginventory.
Manyoftheproductswecreateleveragenewtechnologiesandmaybeconsiderablydifferentfromwhatisalreadyavailable.This
meansthatweoftenmakelargeinvestmentsandtakesubstantialriskstodevelopandlaunchthem.Theyalsooftenrequirepeopleto
adoptnewbehaviors,whichcantakealongtimeevenwhenwearesuccessful.Wealsoupdateanditerateonourproductsregularly,
which can sometimes negatively impact engagement in the shortterm. While product innovation contributes to our longterm user
growthandengagement,wehaveseenthattheresultscanbelumpyandunpredictable.
TheSnapchatapplicationisbasedonmobileoperatingsystemslikeiOSandAndroidaswellastheunderlyingmobilephoneson
which it is installed. Our product opportunity is heavily influenced by these technology providerswe may be able to create new
productsbasedonadvancesintheircapabilities,butwemayalsobelimitediftheychoosetoblockaparticularfeatureorrejectnew
updatestoourapplication.Wealsorelyontheinternetinfrastructureavailabletoourusers,meaningthatcertaincountriesmayblock
someorallofourfeaturestoeveryoneinthatcountry.
Someofourproductshavehighproductioncostsandlongdevelopmenttimelines,andweexpecttoseeanincreaseinourcosts
and expenses due to the launch of Spectacles and future capitalintensive projects. Additionally, products that drive growth and
engagementonSnapchatarealsolikelytoincreaseourinfrastructurecosts.
Mostofourproductswillnotinitiallygeneraterevenue.Wedontmonetizemanyofourproducts,andusetheminsteadtotryto
driveengagementtoourrevenuegeneratingproducts.Evenwhenwedodecidetomonetizeanewproduct,weusuallywait,sometimes
foralongtime,forittoreachalevelofmaturityandadoptionwherewefeelcomfortablepredictingandsellingadvertisingagainst
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OperatingLeverageinOurBusiness
Ourabilitytoachieveandmaintainlongtermoperatingleveragedependsonourabilitytoefficientlyscalebothouradvertising
businessandtheinfrastructurethatsupportsourgrowinguserengagement.Webelievetheconcentrationofouruserbaseamongtop
advertisingmarketsgivesustheopportunitytogrowourARPU.Whilegrowthinuserengagementincreasesouroverallmonetization
opportunity,italsobearsanincrementalcosttoourbusinessbyincreasingourhostingcosts.
We currently have a capitallight business model because we work with thirdparty infrastructure partners, primarily Google
Cloud,torunandscaleourservicesratherthanbuildingourowninfrastructure,whichwouldrequiresignificantupfrontcapitaland
resources. We believe that working with these partners will result in lower costs for us in both the short and long term. Large scale
infrastructureprovidersofferseveraladvantages,includingglobalscaletoserveouraudience,theabilitytohandlepeakdemandmore
economically,andpurchasingpowertoprocureequipmentdirectlyfrominfrastructureequipmentvendorsthatresultsinlowernetcosts
tous.
We also benefit from the concentration of our users in developed markets because the hosting costs of serving these users is
typicallylowerthaninothermarkets.Ourhostingcostsmayincreasesignificantlyinthefuturebecausewepayincrementalhosting
costs for new users and increased engagement. We rely on Google Cloud to host the vast majority of our computing, storage,
bandwidth, and other services. Any transition of such services to another cloud provider would be difficult to implement, and may
causeustoincursignificanttimeandexpense.Wehavecommittedtospend$2billionwithGoogleCloudoverthenextfiveyearsand
havebuiltoursoftwareandcomputersystemstousecomputing,storagecapabilities,bandwidth,andotherservicesprovidedbyGoogle
Cloud,someofwhichdonothaveanalternativeinthemarket.Wearecurrentlynegotiatinganagreementwithanothercloudprovider
forredundantinfrastructuresupportofourbusinessoperations.Inthefuture,wemayinvestinbuildingourowninfrastructuretobetter
serveourcustomers.
Additionally,wefacegreaterchallengesoptimizingouroperatingleverageinlessdevelopedmarkets,resultinginloweroperating
marginsonaverageinthesecountries.Whilethecostsofhiringpeopleandbuildingalocalsalesorganizationareusuallylowerinthese
countries compared to more developed markets, hosting costs tend to be higher. In addition, we also face greater challenges in
increasingourARPUinlessdevelopedmarketsastheiradvertisingmarketstendtobesmallerandlessdeveloped.Forexample,many
ofthesemarketshavenotyetseenasstrongashiftinattentionfromtraditionalformsofmediatomobile,meaningtheremaybea
smallermarketopportunityformobileadvertising.
Wearebuildingmanysolutionsthatwillhelpusscaleouradvertisingbusiness.Forexample,weallowpeopletobuyOnDemand
Geofilters through our selfserve platform, and we recently started allowing certain partners to run advertisements on our platform
throughanAPI.
InvestinginOurTeam
Ourbusinessreliesonourabilitytoattractandretaintherightteamtocreateandmonetizeourproducts.Weinvestheavilyin
hiringandretainingtalentedpeople,particularlyaswegrowourbusiness.OurheadcountatDecember31,2016was1,859employees,
anincreaseofapproximately210%comparedtoDecember31,2015.Weexpecttocontinuetoexpandourteamatarapidpacethrough
hiringandacquisitionstosupportpotentialfuturegrowth.
SeasonalityinOurBusiness
Historically,wehaveseenahighdegreeofseasonalityinourbusinessandfinancialresults.Overalladvertisingspendtendstobe
strongestinthefourthquarterofeverycalendaryear,andweobserveasimilarpatterninourhistoricaladvertisingrevenue.Wehave
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generally less engagement in summer months. The rapid growth in our business and user engagement has generally masked these
trendstodate,andweexpecttheimpactofseasonalitytobemorepronouncedinthefuture.
AcquisitionsandStrategicPartnerships
Weacquirecompaniesfromtimetotimewithteamsandtechnologiesthathelpusaccelerateourproductroadmap.Sometimeswe
acquirecompaniesthataccelerateourpathtoamonetizableproduct.Othercompaniesmayhaveamuchlongerorlessdirectpathto
engagement or monetization. Most of these companies have not had meaningful revenue at the time of acquisition, and ongoing
operatingcostsfromfutureacquisitionsmaynegativelyaffectourfinancialperformance.
Weenterintostrategicrelationshipswithavarietyofpartnersthatcontributetoseveralaspectsofourbusiness,includingpartners
that create content for our platform and partners that help us measure advertising effectiveness. From time to time, we make
investmentsincurrentandpotentialpartnerstostrengthenourrelationship.
StockBasedCompensationExpense
We have granted RSUs and stock options to our employees and advisors. Substantially all RSUs granted before December 31,
2016vestonthesatisfactionofbothaservicebasedconditionandaperformancecondition.Theservicebasedconditionformostof
theseRSUsissatisfiedoverfouryears.Theperformanceconditionissatisfiedontheoccurrenceofaqualifyingevent,definedasa
changeincontrolortheeffectivedateoftheregistrationstatementforourinitialpublicoffering.AllRSUsgrantedafterDecember31,
2016vestonthesatisfactionofonlyservicebasedconditions.
Stockbased compensation expense is recognized only for those RSUs that are expected to meet the servicebased and
performanceconditions.AsofDecember31,2015and2016,achievementoftheperformanceconditionwasnotprobable.Achangein
controleventandeffectiveregistrationstatementarenotdeemedprobableuntilconsummated.Iftheinitialpublicofferinghadoccurred
onDecember31,2016,wewouldhaverecognized$1.1billionofstockbasedcompensationexpenseforallRSUswithaperformance
condition that had satisfied the servicebased condition on that date, and would have approximately $1.5 billion of unrecognized
compensationcost,whichisexpectedtoberecognizedoveraweightedaverageperiodofapproximately3.4years.
Inadditiontotheabove,ontheclosingofthisoffering,theCEOwillreceiveanRSUaward,ortheCEOaward,forsharesof
SeriesFPpreferredstockrepresenting3.0%ofalloutstandingsharesontheclosingofthisoffering,whichincludessharessoldbyusin
thisofferingandtheemployeeRSUsthatwillvestontheeffectivedateofthisoffering.TheCEOawardwillbecomeanRSUcovering
anequivalentnumberofsharesofClassCcommonstockontheclosingofthisoffering.TheCEOawardwillvestimmediatelyonthe
closingofthisofferingandsuchshareswillbedeliveredtotheCEOinequalquarterlyinstallmentsoverthreeyearsbeginninginthe
thirdfullcalendarquarterfollowingthisoffering.TheCEOawardwillberecognizedascompensationexpensebasedon3.0%ofshares
outstandingontheclosingofthisofferingandatanassumedinitialpublicofferingpriceof$pershare,themidpointoftheprice
range set forth on the cover page of this prospectus. The CEO award compensation expense will be recognized immediately on the
closingofthisoffering.
AsofDecember31,2016,therewas$48.6millionofunrecognizedstockbasedcompensationexpenserelatedtostockoptions
and$3.2millionofunrecognizedstockbasedcompensationexpenserelatedtoRSUswithoutaperformancecondition.Weexpectthis
unrecognizedstockbasedcompensationexpensetoberecognizedoveraweightedaverageperiodof2.3yearsforstockoptionsand
1.8yearsforRSUswithoutaperformancecondition.Wedidnotgrantanystockoptionsin2015.IntheyearendedDecember31,2016,
wegrantedoptionswithanaggregategrantdatefairvalueof$37.8milliontocertainemployeesinconjunctionwithanacquisition.

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Foradditionalinformationregardingourstockbasedcompensationexpense,seeCriticalAccountingPoliciesandEstimates
StockBasedCompensation.
ResultsofOperations
Thefollowingtablesummarizescertainselectedhistoricalfinancialresults:

2015 2016
(inthousands)
Revenue $ 58,663 $ 404,482
Netloss (372,893) (514,643)
AdjustedEBITDA(1) (292,898) (459,428)

(1) ForinformationonhowwedefineandcalculateAdjustedEBITDA,andareconciliationofnetlosstoAdjustedEBITDA,see
SelectedConsolidatedFinancialDataAdjustedEBITDAandFreeCashFlow.
AsofDecember31,2016,wehad1,859employees,ascomparedto600employeesasofDecember31,2015.Thisincrease,and
therelatedincreaseinexpenses,weredrivenbythecontinuedexpansionofourbusiness.
ComponentsofResultsofOperations
Revenue
Wegeneratesubstantiallyallofourrevenuethroughthesaleofouradvertisingproducts,whichincludeSnapAdsandSponsored
CreativeTools.Weselladvertisingdirectlytoadvertisers,referredtoasSnapsoldrevenue.Certainpartnersthatprovidecontenton
Snapchat,orcontentpartners,alsoselldirectlytoadvertisers,referredtoaspartnersoldrevenue.WereportSnapsoldrevenueona
gross basis and partnersold revenue on a net basis. Currently, our Sponsored Creative Tools, which include Sponsored Lenses and
Sponsored Geofilters, are only Snapsold. For the years ended December 31, 2015 and 2016, approximately 87% and 91% of our
advertising revenue was Snapsold, and approximately 13% and 9% of our advertising revenue was partnersold, respectively. Snap
Ads,whetherSnapsoldorpartnersold,maybesubjecttorevenuesharingarrangementsbetweenusandthecontentpartner.
For additional discussion related to Snapsold and partnersold revenue, see Critical Accounting Policies and Estimates
RevenueRecognitionandNote1toourconsolidatedfinancialstatementsincludedelsewhereinthisprospectus.
We also generate revenue from sales of our hardware product, Spectacles. This revenue was not material for the year ended
December31,2016andisreportednetofallowancesforreturns.
CostofRevenue
Cost of revenue consists primarily of payments to thirdparty infrastructure partners for hosting our products. Hosting costs
primarilyincludeexpensesrelatedtobandwidth,computing,andstoragecosts.Costofrevenuealsoincludesrevenuesharepayments
to our content partners, content creation costs, which include personnelrelated costs, and advertising measurement services. In
addition, cost of revenue includes inventory costs for Spectacles and facilities and other supporting overhead costs, including
depreciationandamortization.
ResearchandDevelopmentExpenses
Research and development expenses consist primarily of personnelrelated costs, including salaries, benefits, and stockbased
compensationexpensesforourengineersandotheremployeesengagedintheresearch

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and development of our products. In addition, research and development expenses include facilities and other supporting overhead
costs,includingdepreciationandamortization.Researchanddevelopmentcostsareexpensedasincurred.
SalesandMarketingExpenses
Salesandmarketingexpensesconsistprimarilyofpersonnelrelatedcosts,includingsalaries,benefits,commissions,andstock
basedcompensationexpenseforouremployeesengagedinsalesandsalessupport,businessdevelopment,media,marketing,corporate
partnerships,communications,andcustomerservicefunctions.Salesandmarketingexpensesalsoincludecostsincurredforindirect
advertising,marketresearch,tradeshows,branding,marketing,promotionalexpense,andpublicrelations,aswellasfacilitiesandother
supportingoverheadcosts,includingdepreciationandamortization.
GeneralandAdministrativeExpenses
General and administrative expenses consist primarily of personnelrelated costs, including salaries, benefits, and stockbased
compensation expense for our executives, finance, legal, information technology, human resources, and other administrative teams,
includingfacilitiesandsupportingoverheadcosts,anddepreciationandamortization.Generalandadministrativeexpensesalsoinclude
externalprofessionalservices.
InterestIncome
Interestincomeconsistsprimarilyofinterestearnedonourcash,cashequivalents,andmarketablesecurities.
InterestExpense
Interestexpenseconsistsprimarilyofinterestonbuildtosuitleasefinancingobligationsandcommitmentfeesandamortization
ofcostsrelatedtoourrevolvingcreditfacility.
OtherIncome(Expense),Net
Otherincome(expense),netconsistsofrealizedgainsandlossesonsalesofmarketablesecurities,ourportionofequitymethod
investmentincomeandlossesandforeigncurrencytransactiongainsandlosses.
IncomeTaxBenefit(Expense)
WearesubjecttoincometaxesintheUnitedStatesandnumerousforeignjurisdictions.Theseforeignjurisdictionshavedifferent
statutory tax rates than the United States. Additionally, certain of our foreign earnings may also be taxable in the United States.
Accordingly,oureffectivetaxrateswillvarydependingontherelativeproportionofforeigntodomesticincome,useofforeigntax
credits,changesinthevaluationofourdeferredtaxassetsandliabilities,andchangesintaxlaws.
AdjustedEBITDA
We define Adjusted EBITDA as net income (loss), excluding interest income interest expense other income (expense), net
income tax benefit (expense) depreciation and amortization and stockbased compensation expense. We consider the exclusion of
certain noncash expenses in calculating Adjusted EBITDA to provide a useful measure for periodtoperiod comparisons of our
businessandforinvestorsandotherstoevaluateouroperatingresultsinthesamemannerasdoesourmanagement.Additionally,we
believe that Adjusted EBITDA is an important measure since we use thirdparty infrastructure partners to host our services and
therefore we do not incur significant capital expenditures to support revenuegenerating activities. See Selected Consolidated
Financial Statement DataAdjusted EBITDA and Free Cash Flow for additional information and a reconciliation of net loss to
AdjustedEBITDA.

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DiscussionofResultsofOperations
Thefollowingtablesummarizesourhistoricalconsolidatedstatementsofoperationsdata:

YearEnded
December31,
2015 2016
(inthousands)
Revenue $ 58,663 $ 404,482
Costsandexpenses:
Generalandadministrative 148,600
165,160

Totalcostsandexpenses 440,392
924,867



(152)

(4,568)



7,589

7,080

Netloss $ (372,893)
$ (514,643)

AdjustedEBITDA(1) $ (292,898) $ (459,428)

(1) See Selected Consolidated Financial DataAdjusted EBITDA and Free Cash Flow for more information and for a
reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure calculated and presented in
accordancewithGAAP.
Thefollowingtablesetsforththecomponentsofourconsolidatedstatementsofoperationsdataforeachoftheperiodspresented
asapercentageofrevenue:

YearEnded
December31,
2015 2016
Revenue 100% 100%
Costsandexpenses:
Costofrevenue 311 112
Researchanddevelopment 140 45
Salesandmarketing 46 31

253

41


751

229

Lossfromoperations 651 129

Interestincome 2 1
Interestexpense

1

Lossbeforeincometaxes 649 129

Incometaxbenefit(expense) 13

2

Netloss 636%
127%

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YearsEndedDecember31,2015and2016
Revenue

YearEnded
December31, Dollar Percent
2015 2016 Change Change
(dollarsinthousands)
(NM=NotMeaningful)
Revenue $58,663 $404,482 $345,819 NM
RevenuefortheyearendedDecember31,2016increased$345.8millioncomparedtothesameperiodin2015.Revenuegrew
betweentheperiodsprimarilyduetoanincreaseinthenumberofadvertisementsdelivered.Thenumberofadvertisementsdelivered
increasedbetweentheperiodsprimarilyduetoincreasedadvertiserdemandacrossourproductofferings,ourgrowingsalesteam,and
increaseduserengagementasmeasuredbya48%increaseinDAUs.ARPUincreasedduetothegrowthinrevenueasaresultofthe
number of advertisements delivered, which outpaced DAU growth during the period. Snapsold revenue was $365.0 million and
partnersoldrevenuewas$34.9millionduringtheyearendedDecember31,2016comparedto$50.9millionforSnapsoldrevenueand
$7.7millionforpartnersoldrevenueduringtheyearendedDecember31,2015.
CostofRevenue

YearEnded
CostofRevenue $182,341 $451,660 $269,319 148%
CostofrevenuefortheyearendedDecember31,2016increased$269.3million,or148%,comparedtothesameperiodin2015.
The increase in cost of revenue primarily consisted of $191.9 million related to increased hosting costs, in part attributable to DAU
growth of 48% between the periods, $48.2 million related to increased revenue share payments to our partners consistent with our
overallincreaseinrevenue,and$13.3millionrelatedtoincreasedcontentcreationcosts,whichincludepersonnelrelatedcosts.
ResearchandDevelopmentExpenses

YearEnded
ResearchandDevelopmentExpenses $82,235 $183,676 $101,441 123%
ResearchanddevelopmentexpensesfortheyearendedDecember31,2016increased$101.4million,or123%,comparedtothe
sameperiodin2015.Theincreasewasprimarilyduetoanincreaseinresearchanddevelopmentheadcount,andtherelatedsalaries,
benefits,andstockbasedcompensationexpenses.Theinvestmentinpersonnelsupportedoureffortstocontinuegrowingouruserbase
andbuildingandimprovingproductsforourusersandadvertisers.

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SalesandMarketingExpenses

YearEnded
SalesandMarketingExpenses $27,216 $124,371 $97,155 357%
SalesandmarketingexpensesfortheyearendedDecember31,2016increased$97.2million,or357%,comparedtothesame
periodin2015.Theincreasewasprimarilyduetoanincreaseinsalesandmarketingheadcountofapproximately340%.Wealsomade
marketinginvestmentsduringtheyearendedDecember31,2016.
GeneralandAdministrativeExpenses

YearEnded
GeneralandAdministrativeExpenses $148,600 $165,160 $16,560 11%
General and administrative expenses for the year ended December 31, 2016 increased $16.6 million, or 11%, compared to the
same period in 2015. The increase was primarily due to increased personnel costs from an increase in general and administrative
headcount of approximately 220%, partially offset by $43.6 million of stockbased compensation from the accelerated vesting of
modifiedstockbasedcompensationawardsforcertainformeremployeesin2015.
TotalCostsandExpenses
Weanticipatethatcostofrevenuewillincreasefortheforeseeablefutureasuserengagementincreases,includingaswecontinue
to deliver new product offerings. We anticipate that research and development, sales and marketing, and general and administrative
expenseswillallincreaseinabsolutedollarsfromcontinuedgrowthinheadcountandpersonnelrelatedexpenses.Wealsoanticipatea
significantincreaseintotalcostsandexpensesfromthestockbasedcompensationexpenserelatedtoRSUsthathavebothaservice
basedandperformancecondition.
In September 2016, we announced the launch of Spectacles, our cameraenabled sunglasses that make Snaps. We expect to
experience production and operating costs related to Spectacles that will exceed the related revenue in the near future. In 2017, we
expecttocontinuetomakesubstantialinvestmentsininventory,marketing,distribution,andproductinnovationasweassessproduct
demand. Additionally, we plan to significantly broaden the distribution of Spectacles, which will increase our costs and overall
financialrisk.
InterestIncome

YearEnded
InterestIncome $1,399 $4,654 $3,255 233%
InterestincomefortheyearendedDecember31,2016increased$3.3million,or233%,comparedtothesameperiodin2015.The
increasewasprimarilyaresultofalargerinvestedbalanceinmarketablesecurities,whichreturnedahigherrateofinterest.

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InterestExpense

YearEnded
(NM=NotMeaningful)
InterestExpense $ $(1,424) $(1,424) NM
Interest expense for the year ended December 31, 2016 was $1.4 million, compared to $0 in the same period in 2015. Interest
expensewascomposedprimarilyofinterestonbuildtosuitleasefinancingobligationsplacedintoserviceinthethirdquarterof2016
andcommitmentfeesandamortizationofcostsrelatedtoourrevolvingcreditfacility,whichwasexecutedinthethirdquarterof2016.
OtherIncome(Expense),Net

YearEnded
(NM=NotMeaningful)
OtherIncome(Expense),Net $(152) $(4,568) $(4,416) NM
Otherexpense,netfortheyearendedDecember31,2016was$4.6million.Theincreaseinexpensewasprimarilyaresultofan
increaseinourshareoflossesonequitymethodinvestmentsandanincreaseinforeigncurrencytransactionlosses,partiallyoffsetby
gainsonsalesofmarketablesecurities.

YearEnded
IncomeTaxBenefit(Expense) $7,589 $7,080 $ (509) (7)%

EffectiveTaxRate 2.0% 1.4%
Incometaxbenefitwas$7.1millionfortheyearendedDecember31,2016,ascomparedto$7.6millionforthesameperiodin
2015.Theincometaxbenefitsinbothperiodswereprimarilyfromthepartialreleaseofavaluationallowanceagainstournetdeferred
tax assets. The valuation allowance release was the result of net deferred tax liabilities originating from acquisitions that were an
availablesourceofincometorealizeaportionofourdeferredtaxassets.
OureffectivetaxratediffersfromtheU.S.statutoryrateprimarilyduetovaluationallowancesagainstournetdeferredtaxassets
primarilyrelatedtonetoperatinglosscarryforwardswhereitismorelikelythannotthatsomeorallofthedeferredtaxassetswillnot
berealized.Foradditionaldiscussion,seeNote7toourconsolidatedfinancialstatementsincludedelsewhereinthisprospectus.
NetLossandAdjustedEBITDA

YearEnded
NetLoss $(372,893) $(514,643) $(141,750) 38%

AdjustedEBITDA $(292,898) $(459,428) $(166,530) 57%

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NetlossfortheyearendedDecember31,2016was$514.6millionascomparedto$372.9millionforthesameperiodin2015.
AdjustedEBITDAlossfortheyearendedDecember31,2016was$459.4millionascomparedto$292.9millionforthesameperiodin
2015. The increase in net loss and Adjusted EBITDA loss was primarily a result of an increase in cost of revenue and operating
expenses,whichmorethanoffsetrevenuegrowthduringtheperiod.Theincreaseincostofrevenuewasprimarilyrelatedtohigher
hostingcostsandrevenuesharepaymentstoourpartnersfortheyearendedDecember31,2016.Theincreaseinoperatingexpenses
wasprimarilyrelatedtoincreasedheadcount.ForadiscussionofthelimitationsassociatedwithusingAdjustedEBITDAratherthan
GAAPmeasuresandareconciliationofthismeasuretonetloss,seeSelectedConsolidatedFinancialDataAdjustedEBITDAand
FreeCashFlow.
UnauditedQuarterlyResultsofOperationsData
Thefollowingtablesetsforthourunauditedquarterlyconsolidatedresultsofoperationsforeachoftheeightquarterlyperiodsin
the period ended December 31, 2016. These unaudited quarterly results of operations have been prepared on the same basis as our
audited consolidated financial statements included elsewhere in this prospectus. In the opinion of management, the financial
information reflects all normal recurring adjustments necessary for the fair statement of results of operations for these periods. This
informationshouldbereadinconjunctionwithourconsolidatedfinancialstatementsandtherelatednotesincludedelsewhereinthis
prospectus.Theresultsofhistoricalperiodsarenotnecessarilyindicativeoftheresultsinanyfutureperiod.

ThreeMonthsEnded
March31, June30, September30, December31, March31, June30, September30, December31,
2015 2015 2015 2015 2016 2016 2016 2016
(inthousands)
ConsolidatedStatementsof
OperationsData:
Revenue $ 3,920 $ 5,300 $ 16,725 $ 32,718 $ 38,798 $ 71,798 $ 128,204 $ 165,682
Costsandexpenses(1):
Costofrevenue 20,749 40,598 56,227 64,767 75,773 94,757 127,780 153,350
Researchanddevelopment 16,587 17,259 18,989 29,400 28,098 36,052 54,562 64,964
Salesandmarketing 3,453 5,872 8,206 9,685 14,737 24,587 34,658 50,389

61,977

29,392

30,205

27,026

24,011

32,261

42,172

66,716


102,766

93,121

113,627

130,878

142,619

187,657

259,172

335,419

Lossfromoperations

(98,846)

(87,821)

(96,902)

(98,160)

(103,821)

(115,859)

(130,968)

(169,737)

Interestincome 194 332 475 398 359 871 1,938 1,486

Interestexpense (648) (776)

40

(46)

(229)

83

(993)

(939)

(1,421)

(1,215)

Lossbeforeincometaxes (98,612) (87,535) (96,656) (97,679) (104,455) (115,927) (131,099) (170,242)


7,700

(111)

(121)

33

6,871

297

Netloss $ (98,612)

$(79,835)

$ (96,656)

$ (97,790)

$(104,576)

$(115,894)
$ (124,228)

$ (169,945)

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(1) Stockbasedcompensationexpenseincludedinabovelineitems:

ThreeMonthsEnded
2015 2015 2015 2015 2016 2016 2016 2016
(inthousands)
StockBasedCompensation
Expense:
Costofrevenue $ 127 $ 128 $ 128 $ 105 $ 154 $ 128 $ 128 $ 122
Researchanddevelopment 2,715 2,297 2,638 2,659 2,648 2,700 12,138 4,449
Salesandmarketing 830 875 862 967 775 553 1,251 1,377

47,990 2,736

5,081

3,386

1,961

1,361

1,278

819
Total $ 51,662 $ 6,036 $

8,709
$ 7,117
$ 5,538
$ 4,742 $
14,795

$ 6,767

ThefollowingtablepresentsareconciliationofAdjustedEBITDAtonetloss,themostcomparableGAAPfinancialmeasure,for
eachoftheperiodspresented:

ThreeMonthsEnded
2015 2015 2015 2015 2016 2016 2016 2016
(inthousands)
ReconciliationofAdjusted
EBITDA:
Netloss $ (98,612) $(79,835) $ (96,656) $ (97,790) $(104,576) $(115,894) $ (124,228) $ (169,945)
Add(deduct):
Interestincome (194) (332) (475) (398) (359) (871) (1,938) (1,486)
Interestexpense 648 776
Other(income)expense,net (40) 46 229 (83) 993 939 1,421 1,215
Incometaxexpense
(benefit) (7,700) 111 121 (33) (6,871) (297)
Depreciationand
amortization 3,198 3,882 4,118 4,109 5,049 5,996 7,437 10,633
Stockbasedcompensation
expense
51,662 6,036

8,709

7,117

5,538

4,742

14,795

6,767

AdjustedEBITDA $ (43,986) $(77,903) $

(84,075) $

(86,934) $ (93,234) $(105,121) $

(108,736) $

(152,337)

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The following table presents a reconciliation of Free Cash Flow to net cash used in operating activities, the most comparable
GAAPfinancialmeasure,foreachofperiodspresented:

ThreeMonthsEnded
2015 2015 2015 2015 2016 2016 2016 2016
(inthousands)
ReconciliationofFreeCash
Flow:
Netcashusedinoperating
activities $ (40,057) $(66,618) $ (97,495) $ (102,452) $ (92,541) $(134,110) $ (216,866) $ (167,728)
Less:
Purchaseofpropertyand
equipment (1,568) (8,473)

(4,352)

(4,812) (12,452) (16,421)

(17,192)

(20,376)
FreeCashFlow $ (41,625) $(75,091) $

(101,847) $

(107,264) $(104,993) $(150,531) $

(234,058) $

(188,104)

The following table sets forth the components of our unaudited quarterly consolidated statements of operations for each of the
periodspresentedasapercentageofrevenue:

ThreeMonthsEnded
2015 2015 2015 2015 2016 2016 2016 2016
Consolidated
Statementsof
OperationsData:
Revenue 100% 100% 100% 100% 100% 100% 100% 100%
Costsandexpenses:
Costofrevenue 529 766 336 198 195 132 100 93
Researchand
development 423 326 114 90 72 50 43 39
Salesand
marketing 88 111 49 30 38 34 27 30
Generaland
administrative

1,581

555

181

83

62

45

33

40


2,622

1,757

679

400

368

261

202

202

Lossfromoperations

2,522

1,657

579

300

268

161

102

102

Interestincome 5 6 3 1 1 1 2 1
Interestexpense 1 1
Otherincome(expense),
net

1

1

1

3

1

1

1

Lossbeforeincome
taxes 2,516 1,652 578 299 269 161 102 103
Incometaxbenefit
(expense)

145

5

Netloss 2,516% 1,506%

578%

299%

270%

161%

97%

103%

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QuarterlyTrends
Revenue
Revenueincreasedduringeveryquarterpresented.However,webelievethatthisgrowthhasmaskedtheinherentseasonalityof
revenueinourbusiness.Advertisingspendistraditionallystrongestinthefourthquarterofeachyearandweakestinthefirstquarterof
eachyear.Forexample,revenuegrewatalowerrateinthefirstquarterof2016comparedtothefourthquarterof2015.Inaddition,we
expectaseasonaldeclineintotalrevenueforthefirstquarterof2017ascomparedtothefourthquarterof2016.Weexpectthatour
revenuewillcontinuetobeimpactedbyseasonality.
CostofRevenueandOperatingExpenses
Costofrevenuegenerallyincreasedduringeveryquarterpresented,primarilydrivenbyincreasesinhostingcostsduetogrowth
inengagement,higheradvertisingrevenueresultingingrowingrevenuesharepaymentstopartners,andincreasesinheadcount.Costof
revenueincreasedatahigherrateasapercentageofrevenueduringthesecondquarterof2015drivenbysteadyincreasesinhosting
spendduetogrowthinengagementascomparedtoasmallerincreaseinrevenueinthesameperiod.
Operating expenses generally increased due to increases in employee headcount and overall business expansion. General and
administrativeexpensewasahigherpercentageofrevenueduringthefirstquarterof2015duetostockbasedcompensationexpenses
fromtheacceleratedvestingofmodifiedstockbasedcompensationawardsforcertainformeremployees.Researchanddevelopment
expensesinthethirdquarterof2016werehigherthanthepreviousquarterspresentedduetostockbasedcompensationexpensefrom
themodificationofthetermsofRSUsgrantedtooneemployee.
For discussion on income tax benefit (expense), see Note 7 to our consolidated financial statements included elsewhere in this
prospectus.
Foradditionalinformationonmattersthatmayaffectourquarterlyresults,seeRiskFactorselsewhereinthisprospectus.
LiquidityandCapitalResources
Cash,cashequivalents,andmarketablesecuritieswere$987.4millionasofDecember31,2016,primarilyconsistingofcashon
deposit with banks and highly liquid investments in U.S. government and agency securities. Our primary source of liquidity is cash
generated through financing activities. Our primary uses of cash include operating costs such as personnelrelated expenses and the
hostingcostsoftheSnapchatapplication,acquisitionsandinvestments,andfacilityrelatedcapitalspending.Otherthanasnotedbelow,
therearenoknownmaterialsubsequenteventsthatcouldhaveamaterialimpactonourcashorliquidity.Wemaycontemplateand
engageinmergerandacquisitionactivitythatcouldmateriallyimpactourliquidityandcapitalresourceposition.
InJuly2016,weenteredintoafiveyearseniorunsecuredrevolvingcreditfacility,ortheCreditFacility,withlenders,someof
whichareaffiliatedwithcertainmembersofourunderwritingsyndicate,thatallowsustoborrowupto$1.1billiontofundworking
capitalandgeneralcorporatepurposeexpenditures.TheloanbearsinterestatLIBORplus0.75%,aswellasanannualcommitmentfee
of 0.10% on the daily undrawn balance of the facility. No origination fees were incurred at the closing of the Credit Facility. Any
amounts outstanding under this facility will be due and payable in July 2021. In December 2016, the amount we are permitted to
borrowundertheCreditFacilitywasincreasedto$1.2billion.AsofDecember31,2016,noamountswereoutstandingundertheCredit
Facility. See Underwriting and Note 5 to our consolidated financial statements included elsewhere in this prospectus for more
informationabouttheCreditFacility.

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Webelieveourexistingcashbalanceissufficienttofundourongoingworkingcapital,investing,andfinancingrequirementsfor
atleastthenext12months.Ourfuturecapitalrequirementswilldependonmanyfactorsincludingourgrowthrate,headcount,sales
andmarketingactivities,researchanddevelopmentefforts,andtheintroductionofnewfeatures,products,acquisitions,andcontinued
userengagement.
As of December 31, 2016, less than 1% of our cash, cash equivalents, and marketable securities was held outside the United
States.TheseamountswereprimarilyheldintheUnitedKingdomandareutilizedtofundourforeignoperations.Cashheldoutsidethe
United States may be repatriated, subject to certain limitations, and would be available to be used to fund our domestic operations.
However, repatriation of funds may result in additional tax liabilities. We believe our existing cash balance in the United States is
sufficienttofundourworkingcapitalneeds.Theamountofunremittedearningsrelatedtoourforeignsubsidiariesisnotmaterial.
Thefollowingtablesetsforththemajorcomponentsofourconsolidatedstatementsofcashflowsfortheperiodspresented:

2015 2016
(inthousands)
Netcashusedinoperatingactivities $(306,622) $ (611,245)

Netcashusedininvestingactivities (100,942) (1,021,334)
Netcashprovidedbyfinancingactivities

650,366

1,141,890

Netincrease(decrease)incash $ 242,802
$ (490,689)

FreeCashFlow(1) $(325,827) $ (677,686)

(1) ForinformationonhowwedefineandcalculateFreeCashFlowandareconciliationtonetcashusedinoperatingactivitiesto
FreeCashFlow,seeSelectedConsolidatedFinancialDataAdjustedEBITDAandFreeCashFlow.
YearsEndedDecember31,2015and2016
NetCashUsedinOperatingActivities
Netcashusedinoperatingactivitiesincreased$304.6millionintheyearendedDecember31,2016comparedtothesameperiod
in2015.Netcashusedinoperatingactivitieswas$611.2millionfortheyearendedDecember31,2016,resultingprimarilyfromnet
loss,adjustedfornoncashitems,andanincreaseinaccountsreceivableof$118.4millionrelatedtoanincreaseinadvertisingrevenue.
NetCashUsedinInvestingActivities
Net cash used in investing activities was $1.0 billion for the year ended December 31, 2016, an increase of $920.4 million as
comparedtothepriorperiod,primarilyduetotheuseof$1.6billionforthepurchaseofmarketablesecuritiesand$104.0millionfor
businessacquisitions,partiallyoffsetbycashprovidedbythesalesandmaturitiesofmarketablesecuritiesof$728.6million.
NetCashProvidedbyFinancingActivities
Netcashprovidedbyfinancingactivitieswas$650.4millionand$1.1billionfortheyearsendedDecember31,2015and2016,
respectively.Ourfinancingactivitieshaveprimarilyconsistedofpreferredstockissuances.
FreeCashFlow
FreeCashFlowwas$(325.8)millionand$(677.7)millionfortheyearsendedDecember31,2015and2016,respectively,and
wascomposedofnetcashusedinoperatingactivities,resultingprimarilyfromnetloss,

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adjusted for noncash items and changes in working capital. Free Cash Flow also included purchases of property and equipment of
$19.2millionand$66.4millionfortheyearsendedDecember31,2015and2016,respectively.
OffBalanceSheetArrangements
Wedonothaveanyoffbalancesheetarrangementsforanyoftheperiodspresented.
Contingencies
We are involved in claims, lawsuits, indirect and employeerelated tax matters, government investigations, and proceedings
arisingfromtheordinarycourseofourbusiness.Werecordaprovisionforaliabilitywhenwebelievethatitisbothprobablethata
liabilityhasbeenincurredandtheamountcanbereasonablyestimated.Wedisclosematerialcontingencieswhenwebelievethataloss
isnotprobablebutreasonablypossible.Significantjudgmentisrequiredtodeterminebothprobabilityandtheestimatedamount.Such
claims, suits, and proceedings are inherently unpredictable and subject to significant uncertainties, some of which are beyond our
control.Manyoftheselegalandtaxcontingenciescantakeyearstoresolve.Shouldanyoftheseestimatesandassumptionschangeor
provetobeincorrect,itcouldhaveamaterialimpactonourresultsofoperations,financialposition,andcashflows.
Commitments
ThefollowingtablesummarizesourcontractualobligationsasofDecember31,2016:

Lessthan After5
Total 1Year 13Years 35Years Years
(inthousands)
Operatingleases $379,497 $ 32,631 $ 89,101 $100,467 $157,298

Financingleases 46,324 4,659 9,522 10,039 22,104
Datahostingcommitments 33,800 31,200 2,600
Otherpurchasecommitments

87,131

73,873

13,258

Totalcontractualcommitments $546,752
$142,363
$114,481
$ 110,506
$179,402

Foradditionaldiscussiononouroperatingandfinancingleasesanddatahostingandotherpurchasecommitments,seeNote8toour
consolidatedfinancialstatementsincludedelsewhereinthisprospectus.
OnJanuary30,2017,weenteredintotheGoogleCloudPlatformLicenseAgreement.Undertheagreement,weweregranteda
licensetoaccessandusecertaincloudservices.Theagreementhasaninitialtermoffiveyearsandwearerequiredtopurchaseatleast
$400.0millionofcloudservicesineachyearoftheagreement,thoughforeachofthefirstfouryears,upto15%ofthisamountmaybe
moved to a subsequent year. If we fail to meet the minimum purchase commitment during any year, we are required to pay the
difference.
CriticalAccountingPoliciesandEstimates
WeprepareourfinancialstatementsinaccordancewithGAAP.Preparingthesefinancialstatementsrequiresustomakeestimates
and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. We evaluate our
estimatesandassumptionsonanongoingbasis.Ourestimatesarebasedonhistoricalexperienceandvariousotherassumptionsthatwe
believetobereasonableunderthecircumstances.Ouractualresultscoulddifferfromtheseestimates.
The critical accounting estimates, assumptions, and judgments that we believe to have the most significant impact on our
consolidatedfinancialstatementsaredescribedbelow.

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RevenueRecognition
Wegeneratethemajorityofourrevenuethroughthedeliveryofadvertisements.Revenueisrecognizedwhenpersuasiveevidence
of an arrangement exists, the services have been provided or delivered, the fees are fixed or determinable, and collectability of the
related receivable is reasonably assured. These arrangements are either on a fixedfee basis over a period of time or based on the
number of advertising impressions delivered. Revenue related to agreements based on the number of impressions delivered is
recognized when the advertisement is displayed. Revenue related to fixed fee arrangements is recognized ratably over the service
period,typicallylessthan30daysinduration,andsucharrangementsdonotcontainminimumimpressionguarantees.
SnapAdsmaybesubjecttorevenuesharingarrangementsbetweenusandthecontentpartner.Ifarevenuesharepaymentisowed
to a content partner related to Snapsold revenue, we recognize that payment as cost of revenue. Under revenue share arrangements
withourcontentpartners,wepayaportionoftheadvertisingrevenuegeneratedfromthedisplayofSnapsoldadvertisementsinthe
content partners Publisher Stories. These arrangements generally do not contain minimum financial commitments to our publisher
partnersandaregenerallynottiedtospecificeventsorpromotions.
Currently,ourSponsoredCreativeToolsareonlySnapsoldandarenotsubjecttorevenuesharearrangements.Snapsoldrevenue
isrecognizedbasedonthegrossamountthatwechargetheadvertiser.Partnersoldrevenueisrecognizedbasedonthenetamountof
revenuewereceivefromthecontentpartner.
Thereissignificantjudgmentinaccountingforthesearrangementsrelatedtowhetherweshouldreportrevenuebasedonthegross
amountthatwechargetheadvertiserorthenetamountofrevenuereceivedfromthecontentpartner.Todetermineifweshouldreport
revenueonagrossornetbasis,weassesswhetherweareactingastheprincipaloragentinthetransaction.Ifweareactingasthe
principal,werecordrevenueonagrossbasis.Ifweareactingastheagent,werecordrevenueonanetbasis.Weevaluateallofthe
indicatorsintheguidancetomakethisdetermination.Whilenooneindicatorisdeterminative,weplacethemostweightontheanalysis
ofwhetherwearetheprimaryobligor.
We report Snapsold revenue on a gross basis predominantly because we are the primary obligor responsible for fulfilling the
advertisementdeliveryandmaintainingtherelationshipwiththeadvertiser,includingtheacceptabilityoftheservicesdelivered.We
alsoestablishpricingwiththeadvertiserandhavediscretioninsupplierselectiongivenwecanchoosewheretoplacetheadvertisement
onavailableinventoryacrossourplatform.Wereportpartnersoldrevenueonanetbasispredominantlybecausethecontentpartneris
theprimaryobligorresponsibleforfulfillmentandmaintainingtherelationshipwiththeadvertiser,includingtheacceptabilityofthe
services delivered. The content partner also has latitude in establishing the selling price with the advertiser and has discretion in
supplierselection.
StockBasedCompensation
WehavegrantedstockbasedawardsconsistingprimarilyofRSUs,andtoalesserextent,stockoptions,toemployees,members
of our board of directors, and nonemployee advisors. The substantial majority of our stockbased awards have been made to
employees.SubstantiallyallofouroutstandingRSUsgrantedbeforeDecember31,2016containbothaservicebasedvestingcondition
and a performance vesting condition. The servicebased condition for the majority of these awards is satisfied over four years. The
performance condition is satisfied on the occurrence of a qualifying event, which includes a change in control transaction or the
effective date of an initial public offering. Because no qualifying event has occurred, we have not recognized any stockbased
compensationexpensefortheRSUswithbothaservicebasedvestingconditionandaperformancecondition.AllRSUsgrantedafter
December31,2016vestonthesatisfactionofonlyservicebasedconditions.
Weaccountforstockbasedemployeecompensationunderthefairvaluerecognitionandmeasurementprovisions,inaccordance
withapplicableaccountingstandards,whichrequiresstockbasedawardstobe

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measured based on the grant date fair value. Stockbased compensation expense is recorded net of estimated forfeitures in our
consolidatedstatementsofoperations.Accordingly,stockbasedcompensationexpenseisonlyrecordedforthosestockbasedawards
that we expect to vest. We estimate the forfeiture rate based on historical forfeitures of equity awards and adjust the rate to reflect
changes in facts and circumstances, if any. We will revise our estimated forfeiture rate if actual forfeitures differ from our initial
estimates.Amodificationofthetermsofastockbasedawardistreatedasanexchangeoftheoriginalawardforanewawardwithtotal
compensationcostequaltothegrantdatefairvalueoftheoriginalawardplustheincrementalvalueofthemodificationtotheaward.
StockOptions
Totalunrecognizedcompensationcostrelatedtostockoptionswas$30.7millionand$48.6millionasofDecember31,2015and
December31,2016,respectively.Stockoptionsgenerallyvestoveraserviceperiodoffouryears.Stockbasedcompensationexpense
forstockoptionsgrantedtoemployeesisrecognizedonastraightlinebasisovertherequisiteserviceperiod,basedontheestimated
grantdatefairvalue,calculatedundertheBlackScholesoptionpricingmodel.
TheBlackScholesmodelincludessubjectiveassumptions,includingthefairvalueofourcommonstock,expectedtermofthe
option, expected volatility, risk free rate, and expected dividend yield. These assumptions involve inherent uncertainties and the
applicationofmanagementsjudgment.Iffactorschangeanddifferentassumptionsareused,ourstockbasedcompensationexpense
couldbemateriallydifferentinthefuture.
TheassumptionsundertheBlackScholesmodelareestimatedasfollows:
FairValueofCommonStockSeeCommonStockValuationsbelow.
ExpectedTermTheexpectedtermofoptionsrepresentstheperiodthatourstockbasedawardsareexpectedtobeoutstanding.
VolatilityWe determine the price volatility factor based on the historical volatilities of our peer group as we do not have a
sufficient trading history for our common stock. When considering which companies to include in our comparable industry peer
companies,wefocusedonpubliclytradedcompanieswithbusinessessimilartoours.
Risk Free Interest RatesThese rates are based on the implied yield currently available on U.S. Treasury notes with terms
approximatelyequaltotheexpectedlifeoftheoption.
DividendYieldWehavenotanddonotexpecttopaycashdividendsonourcommonstock.
IntheyearendedDecember31,2016,wegrantedoptionstoemployeeswithanaggregategrantdatefairvalueof$37.8millionin
conjunctionwithanacquisition.Theweightedaverageassumptionsusedtodeterminethefairvalueofemployeestockoptionsgranted
duringtheyearendedDecember31,2016wereasfollows:

Expectedtermfromgrantdate(inyears) 6.2
Riskfreeinterestrate 1.4%
Expectedvolatility 63%
Dividendyield 0%
Strikeprice $ 1.00
The weightedaverage fair value of employee stock options granted during the year ended December 31, 2016 was $30.19 per
share.

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RestrictedStockUnits
SubstantiallyallofourRSUsgrantedbeforeDecember31,2016vestonthesatisfactionofbothaservicebasedconditionanda
performancecondition.AsofDecember31,2015and2016,80.5millionsharesofcommonstocksubjecttoRSUsand180.5million
sharesofcommonstocksubjecttoRSUswereoutstanding,respectively,andincludedbothservicebasedandperformanceconditions
tovest.Theserviceconditionisgenerallysatisfiedoverfouryears,10%afterthefirstyearofservice,20%overthesecondyear,30%
overthethirdyear,and40%overthefourthyear.Theperformanceconditionissatisfiedontheoccurrenceofaqualifyingevent,which
includes a change in control or the effective date of an initial public offering. We recognize stockbased compensation using the
accelerated attribution method, net of estimated forfeitures. The grant date fair value of RSUs is based on the fair value of the
underlyingstockonthedateofgrant.SeeCommonStockValuationsbelow.
AsofDecember31,2015and2016,nostockbasedcompensationhasbeenrecognizedforemployeeRSUsbecausesuchawards
include a performance condition and the qualifying events had not occurred. In the quarter in which our initial public offering is
completed, we will begin recording stockbased compensation expense using the accelerated attribution method, net of forfeitures,
based on the grant date fair value of the RSUs. If our initial public offering had occurred on December 31, 2016, we would have
recognized$1.1billionofcumulativestockbasedcompensationrelatedtoemployeeRSUsforwhichtheservicebasedconditionhas
been satisfied. As of December 31, 2016, employee RSUs representing $1.5 billion of unrecognized compensation cost had not yet
satisfiedtheservicebasedvestingcondition.
CEOAward
On the closing of this offering, our CEO will receive an RSU award, the CEO award, for shares of Series FP preferred stock,
whichwillbecomeanRSUcoveringanequivalentnumberofsharesofClassCcommonstockontheclosingofthisoffering.TheCEO
awardwillrepresent3.0%ofalloutstandingsharesontheclosingoftheinitialpublicoffering,whichincludessharessoldbyusinthis
offering and the employee RSUs that will vest on the effective date of this offering. The CEO award will vest immediately on the
closingofthisofferingandsuchshareswillbedeliveredtoourCEOinequalquarterlyinstallmentsoverthreeyearsbeginninginthe
thirdfullcalendarquarterfollowingthisoffering.AsofDecember31,2016,nostockbasedcompensationwasrecognizedfortheCEO
awardbecausetheinitialpublicofferinghadnotoccurred.TheCEOawardcompensationexpensewillberecognizedimmediatelyon
theclosingofthisoffering.
CommonStockValuations
The valuations of our common stock were determined in accordance with the guidelines outlined in the American Institute of
CertifiedPublicAccountantsPracticeAid,ValuationofPrivatelyHeldCompanyEquitySecuritiesIssuedasCompensation.
Weconsideredobjectiveandsubjectivefactorstodetermineourbestestimateofthefairvalueofourcommonstock,includingthe
followingfactors:

recentissuancesofpreferredstock,aswellastherights,preferences,andprivilegesofourpreferredstockrelativetoour

commonstock

thirdparty valuations of our common stock completed as of February 17, 2015, September 30, 2015, March 31, 2016,

July31,2016,September30,2016,October31,2016,andDecember31,2016

ourperformanceandmarketpositionrelativetoourcompetitorsorsimilarpubliclytradedcompanies

the likelihood of achieving a liquidity event, such as an initial public offering or sale of our company, given internal

companyandexternalmarketconditionsand

ourdevelopmentsandmilestones.

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Fiscal2015andSixMonthsEndedJune30,2016
IntheyearendedDecember31,2015andinthesixmonthsendedJune30,2016,weraisedproceedsof$651.3millionand$1.2
billion, respectively, from the sale of Series F preferred stock, net of issuance costs. The Series F preferred stock has rights and
privileges that are equivalent to common stock, with the exception of voting rights applicable to some classes of common stock.
BecauseofthesimilarityintherightsandprivilegesbetweentheSeriesFpreferredstockandourcommonstock,andthesignificance
oftheproceedsraisedfromunrelatednewinvestorsintheissuancesofSeriesFpreferredstock,wedeterminedthepricepaidpershare
forourSeriesFpreferredstockwasasignificantindicatorindeterminingthefairvalueofourcommonstock.
To determine the fair value of our common stock underlying stock option and RSU grants, we first determine our total equity
value,orTEV,andthenallocatetheTEVtoeachequityelementofourcapitalstructure(preferredstock,commonstock,options,and
RSUs).OurTEVwasestimatedusingtheOptionPricingMethodBacksolve,orOPMBacksolve.Thismethodologyutilizesthemost
recent negotiated armslength transactions involving the sale or transfer of our stock or equity interests. Our indicated TEV at each
valuationdatewasallocatedtothesharesofpreferredstock,commonstock,options,andRSUsusingtheOPMBacksolve.Basedon
thesimilarityintherightsandprivilegesoftheSeriesFpreferredstockandourcommonstock,theOPMBacksolvemethodindicated
thevaluepershareofcommonstockwasequaltothepricepersharerelatedtotheissuanceofSeriesFpreferredstockintheyear
endedDecember31,2015andthesixmonthsendedJune30,2016.
SixMonthsEndedDecember31,2016
Ateachvaluationdateinthethirdandfourthquartersof2016,wecontinuedtousetheOPMBacksolvemethod.Wealsoutilized
theProbabilityWeightedExpectedReturnMethod,orPWERM,whichinvolvesestimatingmultiplefuturepotentialoutcomesforthe
business,andestimatesoftheprobabilityofeachrespectivepotentialoutcome.Additionally,weconsideredtwopossiblefutureIPO
dates and the relative probability of each IPO date. The enterprise value for each IPO scenario was determined using a market
approach.Theenterprisevaluewasthenallocatedtothevariousclassesofsharesinourequitystructure.
We determined the probability of an IPO within the two possible future IPO dates and utilized that probability to weight the
PWERM in our common stock valuation. We applied the residual weighting to the OPM Backsolve method in our common stock
valuation.
In the absence of market transactions with new investors, the fair value of our common stock between valuation dates was
determinedusingastraightlinecalculation,withthebenefitofhindsight.Wedeterminedthatthestraightlinecalculationprovidesthe
mostreasonablebasisforthevaluationforourcommonstockbecausewedidnotidentifyanysingleeventthatoccurredduringthese
periodsbetweenvaluationdatesthatwouldhavecausedamaterialchangeinfairvalue.

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SummaryofRSUAwardsGranted
InOctober2016,ourboardofdirectorsapprovedastockspliteffectedintheformofadividendofsharesofClassAcommon
stocktotheholdersofallpreferredstockandcommonstockoutstanding.Eachoutstandingequityawardwasadjustedtoincludeone
shareofClassAcommonstockforeachoutstandingrestrictedstockawardorstockoptiontoacquireashareofeitherClassAcommon
stockorClassBcommonstock.Shareandpershareamountsdisclosedbelowhavebeenretroactivelyadjustedtoreflecttheeffectsof
thisstocksplit.

GrantDate
FairValueper
GrantDate SharesUnderlyingRSUs Share
(sharesinthousands)
2015
April2015December2015 65,114 $ 15.36
2016
January2016May2016 22,292 $ 15.36
July12,2016 15,507 $ 15.53
July15,2016 7,581 $ 15.54
August19,2016 8,900 $ 15.75
September15,2016 5,759 $ 15.98
October26,2016 24,438 $ 16.29
November2016December2016 20,306 $ 16.33
SummaryofStockOptionsGranted
InJuly2016,wegranted1,253,028stockoptionswithanunderlyingcommonstockfairvalueof$31.08pershare.Thesestock
optionawardsentitletheholdertoanadditionalshareofnonvotingClassAcommonstockonexercise.Thetotalstockoptionsgranted
andunderlyingcommonstockfairvaluedonotgiveeffecttothisstocksplit.
BusinessCombinationsandValuationofGoodwillandOtherAcquiredIntangibleAssets
Weestimatethefairvalueofassetsacquiredandliabilitiesassumedinabusinesscombination.Goodwillasoftheacquisitiondate
is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the
liabilitiesassumed.Whileweuseourbestestimatesandassumptionstoaccuratelyvalueassetsacquiredandliabilitiesassumedatthe
acquisitiondate,ourestimatesareinherentlyuncertainandsubjecttorefinement.
Significantestimatesinvaluingcertainintangibleassetsinclude,butarenotlimitedto,futureexpectedcashflowsfromacquired
technology,usefullives,anddiscountrates.Althoughwebelievetheassumptionsandestimateswehavemadeinthepasthavebeen
reasonable and appropriate, they are based in part on historical experience and information obtained from the management of the
acquiredcompaniesandareinherentlyuncertain.Duringthemeasurementperiod,whichmaybeuptooneyearfromtheacquisition
date,werecordadjustmentstotheassetsacquiredandliabilitiesassumedwiththecorrespondingoffsettogoodwill.Ontheconclusion
of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any
subsequentadjustmentsarerecordedtoourconsolidatedstatementsofoperations.
IncomeTaxes
We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required in
determiningouruncertaintaxpositions.

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Werecognizetaxbenefitsfromuncertaintaxpositionsonlyifwebelievethatitismorelikelythannotthatthetaxpositionwillbe
sustained on examination by the taxing authorities based on the technical merits of the position. Although we believe that we have
adequatelyreservedforouruncertaintaxpositions,wecanprovidenoassurancethatthefinaltaxoutcomeofthesematterswillnotbe
materiallydifferent.Wemakeadjustmentstothesereserveswhenfactsandcircumstanceschange,suchastheclosingofataxauditor
the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such
differences may affect the provision for income taxes in the period in which such determination is made and could have a material
impactonourfinancialconditionandresultsofoperations.
RecentAccountingPronouncements
See Note 1 to our consolidated financial statements included elsewhere in this prospectus for recently adopted accounting
pronouncementsandrecentlyissuedaccountingpronouncementsnotyetadoptedasofthedateofthisprospectus.
QualitativeandQuantitativeFactorsaboutMarketRisk
Weareexposedtomarketrisksintheordinarycourseofourbusiness.Theserisksprimarilyincludeinterestrateriskandforeign
currencyriskasfollows:
InterestRateRisk
Wehadcashandcashequivalentstotaling$640.8millionand$150.1millionatDecember31,2015and2016,respectively.We
hadmarketablesecuritiestotaling$0and$837.2millionatDecember31,2015and2016,respectively.Ourcashandcashequivalents
consist of cash in bank accounts and marketable securities consist of U.S. government debt and agency securities. The primary
objectivesofourinvestmentactivitiesaretopreserveprincipalandprovideliquiditywithoutsignificantlyincreasingrisk.Wedonot
enter into investments for trading or speculative purposes. Due to the relatively shortterm nature of our investment portfolio, a
hypothetical100basispointchangeininterestrateswouldnothaveamaterialeffectonthefairvalueofourportfoliofortheperiods
presented.
ForeignCurrencyRisk
FortheyearsendedDecember31,2015and2016,themajorityofoursalesandoperatingexpensesweredenominatedinU.S.
dollars. We therefore have not had material foreign currency risk associated with sales and costbased activities. The functional
currencyofourmaterialoperatingentitiesistheU.S.dollar.FortheyearsendedDecember31,2015and2016,ouroperationsoutside
oftheUnitedStatesarenotconsideredmaterialandincuramajorityoftheiroperatingexpensesinforeigncurrencies.Therefore,our
results of operations and cash flows are minimally subject to fluctuations from changes in foreign currency rates. We believe the
exposure to foreign currency fluctuation from operating expenses is immaterial at this time as the related costs do not constitute a
significant portion of our total expenses. As we grow operations, our exposure to foreign currency risk will likely become more
significant.FortheyearsendedDecember31,2015and2016,wedidnotenterintoanyforeigncurrencyexchangecontracts.Wedo,
however,anticipateenteringintoforeigncurrencyexchangecontractsforpurposesofhedgingforeignexchangeratefluctuationsonour
business operations in future operating periods as our exposures are deemed to be material. For additional discussion on foreign
currencyrisk,seeRiskFactorselsewhereinthisprospectus.

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BUSINESS
Overview
Webelievethatreinventingthecamerarepresentsourgreatestopportunitytoimprovethewaythatpeopleliveandcommunicate.
images.WecalleachofthoseshortvideosorimagesaSnap.Onaverage,158millionpeopleuseSnapchatdaily,andover2.5billion
Snapsarecreatedeveryday.
Inthewaythattheflashingcursorbecamethestartingpointformostproductsondesktopcomputers,webelievethatthecamera
screenwillbethestartingpointformostproductsonsmartphones.Thisisbecauseimagescreatedbysmartphonecamerascontainmore
contextandricherinformationthanotherformsofinputliketextenteredonakeyboard.Thismeansthatwearewillingtotakerisksin
anattempttocreateinnovativeanddifferentcameraproductsthatarebetterabletoreflectandimproveourlifeexperiences.
OurStory
DeletebyDefault
Technology has helped people communicate with each other long before cameras existed. Telegraphs allowed people to send
messagesquicklyacrosslongdistances.Telephonesenabledpeopletohearthevoicesoftheirfarawayfriendsinrealtime.Snapchat
empowerspeopletospeakvisually.
For over 130 years, people have used cameras to document their lives by taking photographs. Today, people use cameras to
communicate,bymakingimagesandsendingthembackandforthtooneanother.Snapchathelpedmakethispossibleinpartthrough
theintroductionofdeletionbydefault,whereSnapsaredeletedfromourserversaftertherecipientviewsthem(thoughthesenderor
therecipientcanalwayskeepacopy).Makingdeletionthedefaultandpermanencetheoptionchangedthewaythatpeoplethinkabout
their cameras, and empowered them to talk with their friends using Snaps instead of simply commemorating their lives with
photographs.
Backwhencameraswerefirstinvented,itwasdifficultandexpensivetocreateaphotograph.Thismadetraditionalphotographs
preciousandpeoplewantedtosaveallofthem.Whenitbecamesomucheasiertotakeandsendphotoswithsmartphones,itbecame
lessimportanttosavethem.Peoplebroughttheirsmartphoneswiththemeverywhere,sotheyhadacamerawiththemallthetime,not
just for special occasions. When images became so easy to take and share with smartphones, it became easier to use images for
communication.
Peoplebegansendingphotosandvideosthroughtextmessageswhentheywantedtocommunicatevisually.However,textingwas
builtprimarilyforwrittencommunication,notvisualcommunication.Textingwasslow,andphotoswerealwaysattachmentsnotthe
primarywayofcommunicating.Touchscreenkeyboardsonsmartphoneswerentveryeasytouse.Wethoughttherehadtobeabetter
waytocommunicatewithimages.
WhenwelaunchedSnapchatinSeptember2011,itwasoneofthefastestwaystosendaphotoonasmartphone.EverySnapwas
deleted from our servers by default after it was viewed, and a copy was saved only if the sender or recipient took a screenshot or
otherwisesavedit.Sincethebeginning,manypeoplehaveusedSnapchatprimarilytosendselfies,digitalselfportraitscapturedand
sharedusingourCamera.Wethinkthisisbecausedeletionbydefaultmakesourusersfeelcomfortablesendingphotosofthemselves
evenwhentheydontlookprettyorperfect.Overtime,asweaddedmoreCreativeTools,ourcommunitybegantoexpressthefull
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Using Snaps to communicate isnt just fast and convenient for the sender, its also a far more engaging and rich form of
communication for the recipient. The human brain processes images much faster than text, and images can convey emotion very
quickly.Itcanbefrustratingwhenthepeopleweretextingdontunderstandhowwefeel.Itseasytocommunicatethatfeelingwitha
Snap.
ThefirstversionofSnapchatunlockedanexplosionofcreativitybecausedeletionbydefault,ourinternetconnectedsmartphone
Camera,andnewCreativeToolsgaveourcommunityavisualvoicetoexpressthemselvesinthemoment.Welearnedthatcreativity
canbesuppressedbythefearofpermanence,butalsoempoweredthroughephemerality.
ListentoLearn
SnapchathasgrownandchangedalotsincewefirsthelpedpeopleexpressthemselvesthroughSnaps.Theprimarywaythatwe
evolveourproductsisbylisteningtoourcommunitysothatwecantrytounderstandhowpeoplewanttoexpressthemselves,livein
themoment,learnabouttheworld,andhavefuntogether.
OneofthefirstthingswedidtoimproveSnapchatwasaddtheoptiontorecordvideoSnaps,becauseourcommunitytoldusthat
sometimes photos werent enough to fully capture a moment. We also heard that people found it annoying and confusing to switch
betweenphotoandvideomodeontheirsmartphonecameras,andthatsometimestheyaccidentallycreatedvideoswhentheymeantto
takeaphoto.
We took what we learned and built a photo and video camera that didnt require users to switch modes. Users simply tap the
Camerabuttontotakeaphoto,orholdtheCamerabuttontorecordavideo.Eliminatingtheinconvenienceofseparatephotoandvideo
modesmeantthatuserscouldcreateSnapsquicklyandeasilywithoutfumblingaroundwithdifferentsettings.Onaverage,over2.5
billionSnapsarecreatedonSnapchateveryday,inpartbecausewesolvedanannoyingproblemforourusers.
AsSnapchatspopularitygrew,peoplebegantomakemorefriendsontheservice.Ourcommunitystartedaskingforaneasier
waytosendaSnaptoalloftheirfriends,notjustoneortwoatatime.Ittooktoolongtoindividuallyselecteachfriendaftercreatinga
Snap,anditbecamedifficulttomanagesomanydifferentconversations.SomepeopleinourcommunityaskedforaSendtoAll
button,butwethoughtthismightencourageuserstospameachotherbymakingittooeasytosendaSnaptoeveryoneveryquickly,
ruiningwhatmadeSnapchatpersonalandfun.
Welearnedthatourcommunityoftensharedthingswithalloftheirfriendsusingsocialmedia,butwealsoheardthattraditional
socialmediawasconfusingbecausethetypicalfeedplacedeveryupdateinreversechronologicalorder.Ifyoupostedphotosfroma
birthdaypartyandthenviewedtheminthefeed,thefirstphotointhefeedwouldbefromtheendoftheparty,andthelastphotointhe
feedwouldbefromthebeginningoftheparty.Ourcommunitywantedtoviewupdatesinchronologicalorder,thewaythattheywere
experienced.Thatmadesensetousbecausehumanshavebeentellingstorieswithabeginning,amiddle,andanendforalongtime.
Whileweunderstoodwhypeopleusedsocialmedia,wedidntwanttomakeatraditionalprofileonSnapchatbecauseweknew
fromourexperiencewithdeletebydefaultthatpeopledidntliketheburdenofaccumulatingperfectmomentsfortheirfriends.Our
communitywantedtoexpressthemselvesandtellstoriesinawaythatembracedchangeandgrowth.
InOctober2013,slightlymorethantwoyearsafterwefirstlaunchedSnapchat,weintroducedMyStory.Storiesarecollectionsof
Snapsviewedinchronologicalorderthatexpirewithin24hours.EveryuseronSnapchathastheirownpersonalandephemeralStory
thatcanbeviewedbyalloftheirfriends.WithStories,everydaybeginsanew.

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WhenwefirstlaunchedStories,theywerentverypopular.Backthen,fewerthantenmillionSnapswereaddedtoStoriesevery
day.WecontinuedtoinvestinimprovingStoriesevenwhenitwasntclearthatitwouldbesuccessful.Overtime,Storieshasgrown
intooneofourmostpopularproducts.Onaverage,over25%ofourDailyActiveUserspostSnapstotheirStorieseveryday.
CouragetoCreate
Ourdrivetocreatenewthingscomesfromthebeliefthatwecancreateproductsthatwillimprovethelivesofthepeoplewhouse
them.Webelieveitsalwaysworthtryingtobuildsomethingthatwillempowerpeopletoexpressthemselves,liveinthemoment,learn
abouttheworld,andhavefuntogetherevenwhenitsnotclearthatwhatwebuildwillbesuccessfulormakemoney.
Whilewegetmanyofourideasbylisteningtoourcommunity,sometimesittakesalongtimetogettheproductsolutionjust
right.Evenwhenwehavetherightsolution,itsoftenintheformofanewproductthatmighttakeawhileforourcommunitytolearn
howtouse.Justbecauseproductsaresometimesconfusingwhentheyrenewdoesntmeanwearegoingtostopbuildinginnovative
productsforourcommunity.PartofthejoyofusingSnapchatisdiscoveringnewfeaturesandlearninghowtousealloftheproducts
thatwecreate.
Whenwewerejustgettingstarted,manypeopledidntunderstandwhatSnapchatwasandsaiditwasjustforsexting,evenwhen
weknewitwasbeingusedforsomuchmore.Wethinkthiswasbecausedeletionbydefaultwasanunusualconceptcomparedtowhat
wasstandardatthetime,soittooktimeforpeopletounderstandthatweweretryingtosolveaproblemthatmanypeopledidntrealize
theyhad.Webelievethatifwedoagoodjoblisteningtoourcommunity,wecancreateproductsthatsolvetheirproblemsevenifthe
productswecreatearentimmediatelyusedbyeveryone.
When we create new products, it is often hard to predict how they will impact user engagement, and sometimes we make
mistakes.Welearnalotfromthewaythatpeopleuseourproducts,andweoftenmakechangesaftertheyarereleased.Welaunched
Auto Advance in March 2016, which played Stories in recent updates backtoback, because we wanted to create an easier way for
peopletocatchupwiththeirfriendsonSnapchat.
Overtime,werealizedthatourcommunitydidnotalwayswanttoseealloftheirrecentupdatessometimestheyjustwantedto
seewhattheirclosefriendsorfamilywereupto.EventhoughourcommunitybeganwatchingmoreStoriesfollowingthelaunchof
AutoAdvance,werecognizedthatitwasnttherightproductbecauseitpreventedusersfrombeingabletochoosewhattheywantedto
watch.
Wewerestillcommittedtoouroriginalgoalofmakingiteasierforpeopletocatchupwiththeirfriends,sowetookwhatwe
learned from Auto Advance and created Story Playlist. Story Playlist retains the original foundation that made Auto Advance great,
whilehelpingourcommunitychoosewhattheywanttowatch.WehavefoundthatevensmallproductchangeslikeAutoAdvancecan
havebigimpactsonthewaypeopleexperienceourservice,soitisreallyimportanttoourbusinessthatweareabletorecognizeour
mistakesandmakechangesquickly.
Wealsoknowthatwearenotthebestateverything.Sometimes,whenanothercompanycancreateabetterproductthanwecan,
we partner with them to deliver a great experience for our community. Weve found that winwinwin partnerships, where our
community, our partners, and our business each benefit, have been instrumental to the longterm success of those partnerships.
Partnershipshelpusprovidenewandinnovativeproductsforourcommunitywithoutlosingfocusonourcorecameraplatform.
Forexample,whenwecreatedPublisherStoriesinJanuary2015,itwasthefirsttimethatweallowedStoriestobecreatedusinga
newsetoftoolsthatwerentdirectlyavailableintheSnapchatapplication.

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PublisherswereabletocreateSnapsandStoriesthatweredesignedandarrangedbyaneditorialteam,abigdeparturefromtheuser
Stories that our community creates every day. Watching Publisher Stories felt really different from watching user Stories, but we
believedthatpublisherswereanimportantpartofourStorytellingPlatform,andweknewthatourpartnershadadepthofexperience
producing compelling stories every day. Working with publishers allows us to provide a unique point of view in the Snapchat
applicationthatwewouldntotherwisebeabletoprovideourselves.
Welovebuildingnewproducts.Ourcommunityinspiresuswiththeircreativity,andweregratefulthatthepeoplewhouseour
productsarewillingtotrythenewthingsthatwemake.Wearealsothankfulforthemanypartnersthathelpbringourproductstolife.
Whether talking through images, telling stories, or making memories, we believe that reinventing the camera has the potential to
improvethelivesofpeopleeverywhere.

ProductInnovationTimelineDailyActiveUsers150m100m50m0mSnapchatLaunch2011AndroidVideo2012StoriesSmartFiltersReplay2013ChatLiveStoriesGeofiltersSnapAdsSnapcashCommunityGeofilters2014PublisherStoriesBestFriendEmojisSnapcodesSponsoredGeofiltersTrophiesLensesSponsoredLensesStoryExplorer2015OnDemandGeofiltersFaceSwapChatStickersVoiceandVideoCalling3DStickersMemoriesBitmojisGeostickersSpectaclesStoryPlaylist2016
OurProducts
WecurrentlyofferthreewaysforpeopletomakeSnaps:theSnapchatapplication,PublishersToolsthathelpourpartnerscreate
PublisherStories,andSpectacles,oursunglassesthatmakeSnaps.SnapsareviewedprimarilythroughtheSnapchatapplication,but
canalsobeembeddedontheweborontelevisionincertaincircumstances.

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Snapchat
Figure1.Snapchat

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Camera
TheSnapchatapplicationopensdirectlyintotheCamera,makingiteasytoquicklycreateaSnap.TheCameraalsoservesasa
homepageinthesensethatitletsusersnavigatetoourChatandStoriesinterfaces.TheChatServiceistotheleftoftheCamera,and
theStorytellingPlatformistotheright.TheProfileabovetheCameramakesiteasytoaddfriendsandmanagesettings,andausers
MemorieslivebelowtheCamera.ThenavigationbaratthebottomofthescreenallowsquicknavigationinbetweentheCamera,Chat
Service,andStorytellingPlatform.

Figure2.Camera Figure3.Preview

MakingaSnapissimple.UserseithertaptheCamerabuttontotakeaphoto,orholdtheCamerabuttontorecordavideouptoten
secondslong.ImmediatelyafteraSnaphasbeencreatedontheCamerascreen,thePreviewscreendisplaysthephotoorvideoSnapfor
theusertoreviewandeditusingourCreativeTools.
CreativeTools
IntheearlydaysofSnapchat,weintroducedafeatureforuserstoaddacaptionbytappingdirectlyonaSnap.Thiswasunique
becausethetextwasoverlaidontopoftheSnap,insteadofbeingseparatedfromorshownbelowthecontent.Byaddingtextdirectly
ontopoftheirSnaps,ourcommunitywasabletocommunicateandexpressthemselvesinanewway.
AfterseeingtheimpactandexcitementofsimpletexteditingonSnaps,webegantoinvestinbuildingadditionalCreativeTools
forourcommunity.Traditionalphotoeditinghasfocusedprimarilyonimprovingthequalityoftheimage.AtSnapchat,ourediting
toolsallowourcommunitytocreateSnapsthataremoreexpressiveinanefforttoimprovecommunication.

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TheCameraservesastheinterfaceforourCreativeTools.MostofthesetoolsareavailableonthePreviewscreenafterauser
takesaSnap,butLensesareusedontheCamerascreenbeforetakingaSnap.
Whenyoutaponthescreen,theCamerafocusesanddetectsobjectsinthescene.Forexample,ifausertapsonhisorherface,we
immediatelyshowLensesatthebottomofthescreen,adjacenttotheCamerabutton.Lensesareinteractiveanimationsthatareoverlaid
onapersonsfaceortheworldaroundthem.AusercaneasilycreateaSnapwhileusingaLens.
Figure4.Lenses

Lensesreacttotheenvironmentinrealtime,sotheyarefuntoplaywithevenwhenauserdoesnotintendtocreateaSnap.On
average,morethanoneinthreeofourDailyActiveUsersplayswithLenseseveryday.WecreatelotsofnewLenseseverymonth
becausewealwayswantouruserstohavesurprisingandentertainingeffectstoplaywith.
AfterausercreatesaSnap,withorwithoutaLens,wedisplayitonthePreviewscreen.ThePreviewscreenisdesignedtoshow
theusertheirSnapimmediatelyafteritiscapturedsothattheycanreviewtheirSnapandedititusingourCreativeTools.

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InadditiontoLenses,weofferdrawingtools,visualfilters,Geofilters,stickers,3Dstickers,Bitmojis,andsimplevideoeffects
likevideospeedanddirectionallavailableonthePreviewscreenaftertakingaSnap.
Figure5.Geofilters

GeofiltersareartisticfiltersavailableonthePreviewscreenatpredefinedtimesandlocations.Initially,wefocusedonproviding
Geofiltersforlandmarksandotherlargeevents.AfterwesawthepopularityoftheGeofiltersproduct,weopenedthecreationprocess
to our community, who now create many Geofilters for all sorts of public and personal places and events. On average, more than a
billionSnapswithGeofiltersareviewedonourapplicationeveryday.
BitmojisarecartoonlikenessesofauserthatarecreatedintheBitmojiapplicationandsubsequentlylinkedtoSnapchat.Bitmojis
are a fun and personal way for users to express themselves on Snapchat. If a user links their Bitmoji with Snapchat, they can place
BitmojisontheirSnapsorsendBitmojisinChat.
Onaverage,ourusersuseCreativeToolstoenhanceover60%ofallSnapstheysendonSnapchateveryday.

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SendingaSnap
AfteraSnaphasbeencreatedwiththeCameraandeditedonthePreviewscreen,itisreadytobesenttofriendsthroughourChat
Service or contributed to a Story on our Storytelling Platform. A Snap can also be saved to Memories. There are shortcuts on the
PreviewscreenforaddingaSnaptoaStoryorsavingtoMemories.
Figure6.SendTo

TheSendTointerfaceisaneasywaytochoosewhocanseeaSnap.IfaSnapissentthroughourChatService,thoserecipients
areindividuallyselectedwiththeSendTointerface.ASnapaddedtoausersStorycanbeviewedbyalloftheusersfriends,unless
theuserhaschosenacustomsettingforStoryprivacy.SnapsthataresubmittedtoLiveStoriescanbeviewedbyalargeraudienceon
Snapchatifwechoosetodisplaythem.
GivingusersasimplewaytocontrolwhoviewstheirSnapsmeansourcommunityfeelsmorecomfortableexpressingthemselves
whetheritswithonefriend,afewfriends,alloftheirfriends,orthewholeworld.Wevefoundthatwhenpeoplefeelcomfortable
expressingthemselves,theyhavealottosay.Onaverage,morethan60%ofourDailyActiveUsersuseourCameratocreateSnaps
everyday.ThismeansthatourChatServiceandStorytellingPlatformarealwaysfullofnew,unique,andexpressivecontent.
WhileusergeneratedSnapsarethefoundationalwayofcommunicatingthroughoutSnapchat,andcomprisethemajorityofSnaps
on our service, we have worked hard to develop our Chat Service and Storytelling Platform to accommodate different ways of
communicatinganddifferenttypesofSnapsandStories,includingSnapsandStoriescreatedbypublishersandothermediapartners.

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ChatService
ThefirstversionofourapplicationincludedaChatServicethatallowedpeopletosendSnapstotheirfriendshencethename
Snapchat.In2014,wedevelopedtextbasedchatbecausesometimesSnapsarentabletoprovidethelevelofdetailandspecificity
requiredbycertainconversations.Snapsarereallyconvenientforcommunicatingemotion,buttextbasedcommunicationisusefulfor
exchanginginformation.LikeSnaps,textchatsaredeletedbydefaultfromourserversaftertheyareviewed.Usersareabletosave
importantchatsbypressingonthemessagewithintheconversation.Savingonlyimportantmessagesmeansthattheyaremucheasier
tofindwhenyouneedthem.
Figure7.Chat

OurChatServicehasevolvedtoincludethingslikevideoandvoicecalling,stickers,Bitmojis,andGroupChat.Itsalwayseasy
tosendaSnapbytappingtheCamerabuttoninthecenteroftheChatService,orbysendingitdirectlyfromthePreviewscreen.On
average,morethan60%ofourDailyActiveUsersuseourChatServiceeverydaytosendSnapsandtalkwithfriends.

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Figure8.ChatConversation

Snapchatbenefitsfromthefrequencywithwhichouruserbasecommunicateswithoneanother,becauseeachmessageinvitesa
userbacktotheapplicationwhentheyreceiveanotification.TheimpactofthatfrequencyhasinpartdrivenouruserstovisitSnapchat
morethan18timeseachdayonaverage,reinforcingthevalueofourinvestmentinnewwaystocommunicate.
StorytellingPlatform
OurStorytellingPlatformbeganwithMyStory,aneasywayforuserstocreateacollectionofSnapsthatplayinchronological
order.IfauseraddsaSnaptotheirStory,itexpireswithin24hoursandcanbeviewedbyalloftheirfriends,unlesstheyhavechosena
customsettingforStoryprivacy.
Figure9.StoriesPage

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AfterthesuccessofMyStory,westartedtothinkaboutdifferenttypesofStoriesthatwecouldcreate.Atthetime,manyofour
friendswouldgotothesameconcertorfestivalandaddSnapstotheirStory.Werealizedthatourcommunityprovidedthousandsof
differentperspectivesofthesameevent,buttheywereonlyabletosharethatperspectivethroughtheirindividualStory.Wedecidedto
makeacommunityStorycalledOurStoryforbigevents.OurStoryallowedthecommunitytocontributetoasingleStorysharedby
everyoneattheevent.
Fastforwardtotoday,andwehaveevolvedtheOurStoryproducttocoverthousandsofcitiesandeventsandweverenamedit
Live Stories. Live Stories provide realtime highlights of all sorts of different newsworthy events, created by our community and
curatedbySnapchat.UserssimplysubmittheirSnapstoourLiveStory,andSnapchattakescareoftherest.
WhatbeganasMyStoryhasgrownintoanincredibleStorytellingPlatformforusersandpublishersalike.AfterwebuiltLive
StoriesandsawthepowerofcommunitystorytellingonSnapchat,werealizedthatStoriescouldbecreatedbyanyone,aboutanything.
WealsorealizedthattherewasalackofcontextaroundLiveStories.Theexcitementoftherealtimecommunityperspectiveneededto
bebalancedbyamoretraditionaleditorialperspectivetoprovidegreatercontextandmoreinformationaboutcurrentevents.
We introduced Publisher Stories to extend our Storytelling Platform to experienced publishers who could invest in producing
highqualityeditorialcontentforStories.WebuiltattachmentsforSnapsinPublisherStories,sothatpublisherscouldattachlongform
content to each Snap in their Story. Users simply swipe up on a Snap to access the attachment. When we first launched Publisher
Stories,wecalleditDiscoverandshowcaseddailycontentfromahandfulofpublisherpartners.Today,dozensofpartnersaroundthe
world,likeVogueandNBC,createPublisherStoriesforSnapchateveryday.Weenterintoagreementswithmanyofthesepartnersthat
allowthemtoearnarevenueshareonadvertisementsintheirPublisherStories.UserscaneasilysubscribetotheirfavoritePublisher
Stories and receive daily updates. For additional discussion on our revenue share arrangements, see Managements Discussion and
AnalysisofFinancialConditionandResultsofOperationsCriticalAccountingPoliciesandEstimatesRevenueRecognition.
InadditiontothenumberofpublisherswithregularStoriesonourplatform,wehavecreatedadditionalPublisherStoryformats
fordifferenttypesofcontent,likeShows.Showsarefastpaced,singlenarrativeStoriesproducedforSnapchat.Thisformatallowsour
partners to create video content that is original to Snapchat and in the same digestible format as Stories. To introduce Shows, we
producedandlaunchedGoodLuckAmerica,ashowabouttheU.S.2016presidentialelectiondesignedspecificallyforouraudience.
While our Chat Service brings people back to the application frequently to communicate with their friends, our Storytelling
Platformprovidesauniquevarietyofpersonalandprofessionalcontentforourcommunitytoenjoy.Asaresult,ourDailyActiveUsers
spendanaverageof25to30minutesonSnapchateveryday.

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Memories
WithalloftheamazingSnapscreatedandsentthroughourChatServiceoraddedtoourStorytellingPlatform,ouruserswanted
aneasierwaytosavetheirfavoriteSnaps.WeintroducedMemoriesinJuly2016togiveeachusertheoptionofsavingtheirSnapsina
personalcollectionbackedupbySnapchat.UserscansendSnapsfromMemoriestofriendsandcreatenewStoriesfromsavedSnaps
inwhichcasetheyaredisplayedwithawhitebordertoshowthattheyarefromMemoriesratherthantheCamera.Wealsodeveloped
ourownadvancedsearchandprivacytoolstohelpusersfindtheSnapstheyarelookingforandstorethemsecurely.
Figure10.Memories

PublisherTools
We created special tools for publishers to build and edit Publisher Stories. These tools allow publishers to easily create and
publishSnapsandattachmentseverydaybasedonuniqueeditorialcontent,suchasavideotakenbehindthescenesofanewsworthy
event.Weareconstantlyworkingonimprovingthesecapabilitiesforexample,weheardthatpeopleenjoyedPublisherStoriesbut
wantedawaytobeabletoseewhatmightbeinthatdaysedition,likeamagazinecover.WeexpandedourPublisherToolstogive
eachpartnertheabilitytocreateathumbnailfortheirPublisherStorythatteasesthecontentinside.Thisencouragesuserstoexplore
Publisher Stories they might not have otherwise thought to view and significantly increased overall user engagement with Publisher
Stories.WealsoprovidemetricsandotherautomatedfeedbackthroughthesetoolstohelpthemimprovethecontentoftheirPublisher
Stories.WearealwaysevaluatingthecapabilitiesofourPublisherToolstoprovidenewandcreativeopportunitiesforourpartners.

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Spectacles
Our latest effort to reinvent the camera is Spectacles, our sunglasses that make Snaps. Spectacles connect seamlessly with
SnapchatandarethebestwaytomakeMemoriesbecausetheycapturevideofromahumanperspective.Forexample,thewideangle
lens is designed to mimic the way the human eye sees the world so that viewing a Memory later makes a person feel like they are
relivingtheexperience.
Figure11.Spectacles

Spectacles capture everything the lens sees using our Circular Video format, which can later be viewed in full screen on any
device,inanyorientation.CircularVideorepresentstheevolutionofourthinkingaroundmobilevideoandtheprogressionbeyondour
firstverticalvideoformat.
Figure12.CircularVideoinMultipleOrientations

Injustfiveyears,Snapchathasevolvedfrompictureconversationsintothebeginningsofacameraplatform.Wevedonethisby
listeningtoourcommunityandofferingpeoplenewwaystoliveandcommunicate.Westrivetoprovideproductsthatempowerour
communitytoexpressthemselves,liveinthemoment,learnabouttheworld,andhavefuntogether.Webelievethatthecameraisthe
startingpointforthefutureofmobileinteraction,entertainment,andeducation.

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OurBusiness
WhyWeSellAds
WhenwefirststartedbuildingSnapchat,wedidntknowhowitwouldmakemoney.Wewerefocusedontryingtocreateaway
forpeopletotalkbysendingpicturesbackandforthontheirsmartphones.Wewantedtomakemoney,buttheproductwassonewand
different that it wasnt immediately obvious how to build a business around what we had created. As the company grew, and more
peopleusedSnapchat,werealizedweneededtostartmonetizingandfast.Ourserverbillsweregettingexpensive.Wedecidedtotry
afewdifferentthingstofigureoutwhatworked.
Earlyon,wethoughtaboutchargingourcommunitytouseadditionalfeatures.Forexample,wesawsomanypeoplehavingfun
withtheCreativeToolswemade,likedrawingandcaptions,andwethoughtpeoplemightwanttopurchaseadditionalwaystoexpress
themselves.Totestthishypothesis,webuiltaLensStorewhereouruserscouldbuynewLenses,inadditiontothefreeoneswealready
provided.Theresultsweredisappointing.OnlyasmallnumberofpeoplewantedtobuyLenses,andthenumberofpeopleusingLenses
decreased. After a few weeks, we got rid of the Lens store and made all of the Lenses available for free. Almost immediately, our
communitybegantouseLensesmoreandcreatemoreSnapstosendtotheirfriendsandaddtotheirStory.
LensUsageOverTime

WelearnedthataskinguserstopayforCreativeToolswasabadidea.Itmeantintroducingmorefrictionintotheprocessofself
expression,whichwastheoppositeofwhatwewantedonSnapchat.Wealsolearnedsomethingexcitingaboutbuildingnewproducts:
ifwebuiltmoreCreativeToolsandmadethemavailabletoeveryoneforfree,ouruserswouldcreatemoreSnapsandspendmoretime
onSnapchat.
Wewantedtofindwaystomakemoneythatleveragedwhatwearegoodatbuildingnewproductsandthatalsoempowered
peopletoexpressthemselves,liveinthemoment,learnabouttheworld,andhavefuntogether.
SponsoredCreativeTools
WedecidedtofocusonSponsoredCreativeTools,likeSponsoredGeofiltersandSponsoredLenses.Theseproductsenablepeople
toexpressthemselvesusingcreativethatisprovidedbyouradvertisingpartners.Thisbenefitsourcommunitybecauseitempowers
expression.ItbenefitsourbusinessbecausepeoplemakemoreSnapswithCreativeToolsthatwecanprovideforfree.Anditbenefits
ouradvertisingpartnersbecauseouraudienceengageswiththeircampaignsduringthecreativeprocessandmakesthemanorganicpart
oftheSnapstheysendtotheirfriendsresultinginhigherperformance.Theresultswereimmediatelypositive.

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SponsoredLenses
AdvertiserscanprovidebrandedLensexperiencestoourusersbypurchasingSponsoredLenses.Theformatsinteractivenature
offersauniquelyengagingwayforourcommunitytoplaywiththesponsoredexperiences.JustlikewithotherLenses,usershavethe
optiontocreateaSnapandshareitwiththeirfriends.
Figure13.SponsoredLenses

Example1.20thCenturyFoxSponsoredLens

20th
Century
Fox
SponsoredLens

To generate excitement for XMen:Apocalypse, 20th Century Fox ran a Sponsored
Lens campaign that let users turn themselves into the iconic characters in the
upcoming movie. In one day, people spent a collective 56 years playing with the
SponsoredLenses,whichalsofeaturedthemutantspowers.Theyalsoincorporated
theSponsoredLensintoSnapstheysharedwiththeirfriends,whichyieldedover298
million views for the campaign and greatly amplified awareness and anticipation for
the movie. The campaign resulted in a 13 percentage point increase in brand
awareness, 7x the mobile norm, as measured by Millward Brown. More importantly,
theSponsoredLensalsodrovea25%liftintheaterwatchintent,over3xthemobile
norm.

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SponsoredGeofilters
OurcommunityregularlychecksforGeofiltersaftertakingSnaps.Geofiltersmaybetargetedgeographicallybylocationsranging
from individual buildings to entire countries. Brands can sponsor Geofilters to help people celebrate holidays or show their friends
wheretheyare.
Figure14.SponsoredGeofilters

Example2.UnderArmourSponsoredGeofilter

UnderArmour
SponsoredGeofilter

SponsoredNationalGeofiltersblankettheU.S.forone
day, offering brands one of the most effective ways to
reach people when theyre at their most creative. To
boost awareness for its Rule Yourself campaign,
Under Armour partnered with us to deliver the perfect
postworkout Geofilter. The Sponsored Geofilter was
viewed over 60 million times and created a 20
percentagepointincreaseinadrecall.Moreimportantly,
the campaign yielded a 78% increase in purchase
intent, over 5x the mobile retail campaign norm, as
measuredbyMillwardBrown.

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We are happy with the way that Sponsored Creative Tools improved Snapchat and empowered people to express themselves.
SponsoredCreativeToolsencouragepeopletomakemoreSnapsandaresometimesusedmorethanregularCreativeTools.Inaddition,
wealsofocusonotheradvertisingproductsthatcanscaleaspeoplewatchmorecontent.
SnapAds
When we first started experimenting with advertising, we decided to try placing Snaps created by advertisers in Stories. We
thoughtthiswouldbeagoodwaytobuildascalableadvertisingbusinessbecausetherearesomanypeoplewatchingbillionsofSnaps
inStorieseveryday.AdvertisinginStoriesmadesensebecauseitmeantthatouradvertisingpartnershadanopportunitytousesight,
sound,andmotiontotellastoryabouttheirbrandandproducts.
Welearnedalotaboutvideoadvertisingbycloselyobservingwhichtypesofadvertisementsourcommunityreallyenjoyed.We
wantedtomakesurethatthevideoadvertisementsonSnapchatwereengaging,creative,andfunandthattheyhelpedourcommunity
learnabouttheworld.WithanaverageofovertenbillionvideoswatchedonSnapchateveryday,thevolumeofpeoplecreatingand
watchingvideosmadeiteasytounderstandwhatworkedandwhatdidnt.
Twoofthemostpopularformsofdigitalvideoadvertisingatthetimewereprerollhorizontalvideoadvertisementsandinfeed
horizontalvideoadvertisements.Prerolladvertisementsplayedbeforethecontentthatauserwantedtowatch,leavingusersfeeling
liketheyhadbeenblockedbyanadvertisementandfrustratedthattheyhadtowaittoseewhattheyhadselectedtowatch.Infeed
advertisements were less obstructive, but they werent full screen and users often scrolled right past themjust like a banner
advertisementonawebsite.
Webelievethatourcommunityenjoyedvideoadvertisingontelevisionthemostbecauseitwaspartoftheexperience,especially
when the advertisements were funny, creative, and entertaining. There was only one problem for advertisers: many people were
watchinglessvideoontelevisionandspendingmoretimewatchingvideoontheirsmartphones,onplatformslikeSnapchat.Thismeant
thatitwasgettinghardertoshowadvertisementstotheaudiencetheadvertiserwantedtoreach.Wewantedtofigureouthowtocapture
theentertainmentandcreativityoftelevisionadvertisementsthatmadethemsoengaging,andmakevideoadvertisingpartofthefunof
watchingStories.
WhenwefirstapproachedadvertiserstocreateSnapAds,welearnedthatmanyofthepartnersweworkedwithdidntwantto
createcustomvideoadvertisementsjustforSnapchat.TheywantedtorepurposetelevisionadvertisementsandshowthemonSnapchat
becauseitwaseasierandsavedmoney.Wehadlearnedfromourcommunitythatpeoplewantedtocreateandwatchfullscreenvideos
inaverticalorientationontheirphones,becausethatsthenaturalwaythatpeopleholdtheirphones.Whenpeopleareforcedtowatch
repurposedvideosfromtelevision,thevideoappearsverysmallinthecenterofthescreenanditisnofuntowatch.

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We thought that video creative made for television was high quality and entertaining for our users and that we just needed to
display it as a Snapa full screen vertical video with sound. Fortunately, some of our partners were willing to create new
advertisementsinourverticalvideoformat.WedecidedtotestsomeofthecustomverticalSnapAdsagainstthehorizontaltelevision
formattoseehowtheyperformed.Wefoundthatpeopleweremorelikelytocompleteaverticalvideothanitshorizontalcounterpart,
andovertimeouradvertisingpartnersadoptedthenewformatforallSnapAds.Wereexcitedthatmanyofouradvertisershavestarted
toevolvebeyondtelevisionstylecreativeandaremakingadvertisementsspecificallydesignedasSnapAds.
Figure15.Verticalvs.HorizontalMobileVideo

We believe that audio is a fundamental component of video, especially when it comes to emotion and impact. Creating and
watchingSnapswithsoundisamoreengagingandexpressiveexperiencethaniftheSnapsweremuted.Justimaginewatchingahorror
moviewithoutasoundtrackitmightlooklikeacomedy.ThatswhyweplaySnapAdswithsound,unlessauserhasmutedtheir
device.Onaverage,over60%ofallSnapAdsarewatchedwithsoundon.
WebelievethatplacementandchoiceareextremelyimportantwhenitcomestoanadvertisingproductasengagingasSnapAds.
WeapproachedthisbyfollowingexistinguserbehaviorinStoriesanddecidedtoshowSnapAdsinStories.Thismeansthatpeople
onlyseeSnapAdswhentheyhavealreadychosentowatchaseriesoffullscreenvideoswithsound.
PublisherStoriesareagreatopportunityforadvertisingbecausetheyarepremiumStoriesoftenrelatedtoaparticularinterest.
ThismeanswecandeliverSnapAdsthatmightberelevanttothecontentinthoseStories.WealsoshowSnapAdsinbetweenuser
Stories.SnapAdscanappearattheendofafriendsStory,ortheycanappearinbetweentheStoriesofdifferentfriendsiftheuseris
usingStoryPlaylist,afeatureforwatchingmultipleStoriesinsuccession.

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Figure16.SnapAdPlacementinStories

We designed Snap Ads to be skippable because we want to give users the choice whether or not they want to watch an
advertisement. We think this provides a better user experience, and also helps protect our advertisers brands from being associated
withaforcedinteraction.AllowingskippingalsochallengesouradvertiserstocreatehighqualitycontentforSnapAds,whichinturn
drivesreturnonadvertisingspendforthemaswellasbetteradvertisementsforourcommunity.
Example3.TrolliSnapAd

Trolli
SnapAd

Trolli Candy ran a Snap Ad campaign to highlight its
association with the NBA and one of its stars, James
Harden. The advertisements appeared in the NBA All
StarGameandOpeningNightLiveStories.Theresults
showeda33%liftinpurchaseintentforTrolliproducts,
over 2x the mobile CPG norm, and an 11 percentage
pointincreaseinbrandawareness,2xthemobilenorm,
as measured by Millward Brown. Of the people who
remembered seeing the campaign, 90% said they
enjoyedit.

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AfterwefeltlikewehadmadeavideoadvertisingproductforSnapchatthatwasasgoodastelevision,wewantedtoimproveit
usingsomeoftheuniquefeaturesofsmartphonesandSnapchat.ThefirstthingwedidtoexpandtheSnapAdsproductwasimproveit
withinteractivecapabilities.
SnapAdswithAttachments
AttachmentshelpadvertisersaccomplishspecificgoalsbyprovidingawayforuserstorespondtoaSnapAdwhileviewingit.
Forexample,auserwhoviewsaSnapAdaboutanewproductcanswipeupontheSnapAdtobuytheproductinstantlyfromthe
advertiserswebsitewithoutleavingtheSnapchatapplication.OurcommunitylearnedhowtoswipeuponSnapscreatedbypublishers
toreadarticlesorwatchlongformvideos.ThismeantthatusersalreadyknewthattheycouldswipeuponaSnaptolearnmorewe
justextendedthefeatureandmadeitavailableforSnapAdsaswell.
Figure17.SnapAdswithAttachments

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Example4.TypesofAttachments

LongFormVideo Article AppInstall WebView

SwipeUp

Showadditionalvideo Createrichcontent Driveseamlessapp Instantlyloada
contentthatisupto thatcanincludetext, installsfromwithin mobileweb
tenminuteslong. inlinevideo,and theSnapchat experience.
GIFs. experience.

Example5.bareMineralsSnapAdwithLongFormVideoAttachment

bareMinerals
SnapAdwithLongFormVideoAttachment

bareMineralsranaSnapAdcampaignwithaLongFormVideo
Attachment to help people prepare for those dreaded moments
when Zit Happens. Enlisting makeup expert Amy Pham, the
campaign used a longform video to showcase their Blemish
Remedylineofproductsandprovideaninformativestepbystep
guide on how to use them to cover up blemishes. Three in ten
people who saw the Snap Ad chose to swipe up, spending an
averageof30secondsoftheirtimetolearnmoreaboutBlemish
Remedy. Following the campaign, bareMinerals saw a 2x
increase in search traffic for Blemish Remedy products on its
website.
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Sometimes brands can use multiple different advertising products to create integrated campaigns. Our suite of advertising
products work on their own, or all together. Snap Ads tell rich stories, while Sponsored Geofilters let you check in and share your
locationwithfriends,andSponsoredLensesprovideaninteractiveexperience.
Example6.StarbucksIntegratedCampaign

SnapAd ChainGeofilter NationalLens

Starbucks
IntegratedCampaign

To promote Frappuccino as the drink of the summer, Starbucks ran an integrated
campaign that leveraged multiple advertising products to tell a cohesive story, reaching
over 117 million views. They started by running a series of three playful Snap Ads that
eachfeaturedanewflavorofFrappuccino.TheSnapAdsfocusedonthebottledversion
ofthebeverage,whichcanbepurchasedatavarietyofdifferentlocationsforaPop,Sip,
andGoexperience.

Starbucksalsocreatedaninstoreexperiencethroughoutthecampaign,usingregularly
updated Sponsored Chain Geofilters available at their locations across the U.S. to
promotetheblendedversionofthedrink.ThesummertimeSponsoredGeofilterswerea
testamenttothepowerofCreativeToolsthatletuserssharewhattheyreuptowiththeir
friends and family, with over 40 million people viewing Snaps that featured one of the
SponsoredGeofilters.

Finally, Starbucks also ran a Sponsored National Lens campaign to drive awareness by
inviting users across the U.S. to play and interact with the Frappuccinothemed Lens,
whichfeaturedacameoofthecatfromoneoftheSnapAds.TheSponsoredLenswas
engaging,seeinganaverageofover23secondsofplaytimeperuser.

ChoosingWhichAdstoDeliver
Webelievethatoneofthebiggestopportunitiesinmobileadvertisingistheabilitytoserveadvertisementsthatarepersonaland
respectfulofcontext.Advertisingismoreeffectiveandlesswastefulwhenpairedwiththerightcontextualunderstanding.Smartphones
can achieve this because they are personal in a way that other forms of media will never bewe eat, sleep, and poop with our
smartphoneseveryday.Theycanalsounderstandtheworldaroundthem,suchaswheretheyareandhowfasttheyaremoving.
Weworktounderstandouruserssothatwecanimproveourproductsanddeliverbetteradvertisementstotherightpeople.When
auseriswatchingcontentandanadvertisingimpressionbecomesavailable,weneedtochoosewhichadvertisementtoshow.Wetake
into account our contextual understanding of the impression to try to pick an advertisement that will be relevant to that user. Our
advertisingdeliveryframeworkoptimizesallofthesedecisionsacrossthewholeplatform.Thisimprovesourcommunitysexperience
because we are less likely to show them advertisements they dont want to see, while decreasing the number of wasted advertising
impressions.
Forexample,Targetwantedtooptimizethewaytheyreachedfemalecustomersduringthe2016holidayseason.Targetworked
withoneofourSnapAdsPartnerstotakeadvantageofourgoalbasedbiddingtooptimizethecampaignforswipes,whileleveraging
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Snap Lifestyle Categories. Our advertising server optimized delivery of the campaign to maximize swipeup rates, reducing the
effectivecostperswipetotheadvertiserbymorethan60%.Atthesametime,wechargedaneffectivecostperimpressionthatwas
morethan80%higherthaniftheyhadpurchasedwithoutoptimizingforswipes,increasingtheefficiencyandmonetizationpotentialof
ourinventory.
Aswecontinuetomakethesedecisions,wecanlearnfromthemandimprovethechoiceswemakeinthefuture.Additionally,we
areabletomakebetterdecisionswhenwehavemoreoptions,suchasmoreavailableimpressionsandmoreadvertisementstofillthem
with.Thismeansthatouradvertisingdeliverywillgetbetterasouruserengagementgrowsandadvertisingbusinessscales.
MeasuringAdvertisingEffectiveness
After we created what we believe are the best mobile advertising products in the market, we wanted to prove it. Advertisers
startedtoexperimentwithouradvertisingproductswithsmallcampaignstoseeifouradvertisingworked.Somewereexcitedabout
ouradvertisingproductsandwantedtospendmoremoneytoreachalargeraudience,butwantedustoprovideadditionalmeasurement
inorderforthemtofeelmorecomfortabledoingso.
Forexample,advertiserswhowerespendingalotofmoneyonourproductswantedverificationthattheadvertisementstheyhad
purchased were actually delivered to our users. We learned that providing thirdparty verification would help advertisers feel more
comfortablewithlargepurchasesofouradvertisingproducts.Inadditiontoourinhousereportingondeliverymetrics,wepartnered
withInnovid,Sizmek,andGoogleDDMforthirdpartyverification.ThesemethodstypicallyworkbyloadingathirdpartyURLwith
theadvertisementandcountinghowmanytimesthatURLwasloadedbyourapplication.
ProvidingthisverificationforSnapAdsgaveustheopportunitytodevelopadditionalmetricsthatenableadvertiserstomeasure
viewability and attention for video advertising. We found that there werent any standard metrics for mobile video viewability and
attentionacrossthevideoadvertisingbusiness,makingithardforadvertiserstocomparemobilevideoadvertisingcampaignsacross
differentpublishersandplatforms.WewerealaunchpartnerfortheMoatVideoScore,anewwaytomeasureviewabilityandattention
forvideoadvertisementsacrossdifferentvideoplatforms.
The Moat Video Score measures sight, sound, and motion throughout the duration of the video and is comprised of four
componentmetrics:ScreenRealEstate,50%OnScreenTime,AudibleTime,andAdLength.

Screen Real Estate is the proportion of the videos size to the size of the users screen. This metric helps advertisers
understandhowtheirvideoadvertisementcompeteswithadjacentonscreencontentforvisualattention.SnapAdsarefull
screen.

50%OnScreenTimeistheaveragelengthoftimethatatleast50%ofthevideoisonscreen.Thismetrichelpsadvertisers
understandiftheirvideoadvertisementisviewableonscreen,ratherthanplayinginthebackgroundorinadifferentbrowser
tab.SnapAdsarealwaysvisibleduringplayback.

AudibleTimeistheaveragelengthoftimethatthevideoisaudible.Thismetrichelpsadvertisersunderstandiftheirvideois
viewedwithsound,becausesoundisacriticalpartofvideoadvertising.SnapAdsareplayedwithsound,unlessaviewer
haschosentomutetheirdevice.

AdLengthistheaveragemaximumdurationofthevideo.Whenusedwith50%OnScreenTimeandAudibleTime,this

componentquantifiesthepercentageofvideoseenandheard.
TheMoatVideoScorehasbecomeanimportanttoolforadvertiserstomeasureviewabilityandattentionfortheirmobilevideo
advertisements.

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Afterwemadeiteasyforouradvertisingpartnerstoverifydeliveryandviewability,wefocusedonhelpingadvertisersverifythat
theiradvertisementsweredeliveredtotherightaudience.
WeworkedwithNielsenmDARandMillwardBrowntomeasurethereachandfrequencyofacampaignandthedemographicsof
the users who viewed it. This helps advertisers verify that they were able to reach the intended audience with their campaign. For
example,amalebodycarecompanyranaSnapAdcampaignwithalongformvideoattachmenttopromotetheirdeodorantformen
andwantedtoensurethattheircampaignreachedmalesbetweentheagesof13and34.MillwardBrownverifiedthatapproximately
88%ofthepeoplewhosawtheirSnapAdwereintheadvertiserstargetdemographicforthecampaign.
Inadditiontoverifyingthattheiradvertisementsaredeliveredandviewedbytherightpeople,ouradvertisingpartnerswantedto
understandiftheiradvertisementsworked.Thiswasahardermeasurementchallengebecauseadvertisershavedifferentgoalsforeach
oftheircampaigns.Weneededseveraldifferentsolutionsforadvertiserstochoosefromwhentheyarepurchasingcampaigns.
Ouradvertisingpartnersareprimarilyfocusedontwothings:whetherpeoplesperceptionorattitudetowardsaproductorbrand
changedafterviewinganadvertisement,andwhetherornotpeopletookanactionafterviewinganadvertisement,likebuyingaproduct
orvisitingastore.
OurcollaborationswithNielsenandMillwardBrownhelpustomeasureadvertisingawareness,brandfavorability,andpurchase
intentbysurveyingouruserstounderstandhowexposuretoanadvertisementchangestheirawarenessandattitude.Forexample,when
amusicstreamingserviceranaSnapAdcampaign,MillwardBrownmeasuredthatitdrovea30%liftinsubscriptionintent,2xthe
mobilenorm,anda24percentagepointincreaseinadrecall,1.5xthemobilenorm.
WepartneredwithOracleDataCloudtomeasurehowadvertisementsimpactinstoresalesforCPGcompanies.Arecentstudy
across12campaignsfoundthat92%ofthemeasuredcampaignsdroveapositiveliftininstoresales,withthecampaignsexceeding
Oracle Data Cloud norms on all key metrics. For example, two home care campaigns drove over $100 in revenue per thousand
impressionsareturnonadvertisingspendinexcessof6x.
ForSnapAdswithAppInstallAttachments,wepartneredwithTune,Adjust,Kochava,andAppsflyertomeasurewhetherpeople
thatviewedtheadvertisementinstalledtheirapp,aswellasthelongtermvalueofthoseusers.PocketGemsranaSnapAdwithApp
InstallAttachmentcampaigntodriveinstallsofitsnewEpisodegame.WepartneredwithTunetoattributeover132,000installsfrom
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WerecentlydevelopedourownSnaptoStoremeasurementproductusingthelocationbasedfeaturesoftheSnapchatapplication
todeterminetheincreaseinstorevisitsafterviewinganadvertisingcampaign.Forexample,WendysblanketeditsU.S.storeswith
SponsoredGeofiltersthatpromotedtheJalapeoFrescoChickenSandwich.WeusedourSnaptoStoremeasurementmethodologyto
report that the Sponsored Geofilter drove over 42,000 incremental people to a Wendys location within seven days of viewing the
SponsoredGeofilter.
Figure18.SnaptoStoreMeasurement

Wearecommittedtoverifyingthedeliveryofouradvertisementsandprovingtheirefficacythroughcontinuedimprovementsto
ourmeasurementproductsandpartnerships.Measuringourproductsalsohelpsuslearnhowwecanbetterserveourcommunitywith
innovativeandeffectiveadvertisementsfromourpartners.
HowWeSellAds
We offer several different ways to buy advertisements on Snapchat. Our direct sales team works with large advertisers and
agenciesaroundtheworld.Manyofourcontentpartners,includingpublisherslikeViacom,alsosellourinventory.Advertiserscanalso
work with Snapchat Ads Partners like TubeMogul and 4C, to purchase advertising from us through our advertising API. Our
advertisingAPIempowersbrandsandagenciestoprogrammaticallybuy,optimize,andmeasureadvertisingcampaignsinrealtime.
ThereisnorevenueshareorotherfeesbetweenusandourAdsPartnersunderthesearrangements.Additionally,ourselfserveOn
Demand Geofilter platform allows everyone, individuals and businesses alike, to easily create Geofilters for local businesses and
personalmoments,likeweddingsandbirthdays.Wealsohaveaninsidesalesteamthathelpssmallandmediumsizedbusinesseslearn
aboutandpurchaseOnDemandGeofilters.

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AdvertiserReception
While our advertising business is still in its early stages, the combination of user engagement, advertising products, delivery,
measurement,andsaleschannelshashelpedusdeliverresultsforouradvertisingpartners.WewereincludedinAdvertiserPerceptions
September 2016 Digital Campaign Management System Report, which examines advertiser and agency perceptions of various
advertising platforms. In a comparison with Facebook, Google Display Network, Instagram, Pinterest, Twitter, and YouTube, we
rankedfirstinoverallsatisfaction,fourthinplanstoincreaseadvertisingspend,andthirdinlikelihoodtorecommendtoacolleague.

Source:AdvertiserPerceptions

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OurStrategy
Ourstrategyistoinvestinproductinnovationandtakeriskstoimproveourcameraplatform.Wedothisinanefforttodriveuser
engagement,whichwecanthenmonetizethroughadvertising.Weusetherevenuewegeneratetofundfutureproductinnovationto
growourbusiness.
Inaworldwhereanyonecandistributeproductsinstantlyandprovidethemforfree,thebestwaytocompeteisbyinnovatingto
createthemostengagingproducts.Thatsbecauseitsdifficulttousedistributionorcostasacompetitiveadvantagenewsoftwareis
availabletousersimmediately,andforfree.Webelievethismeansthatourindustryfavorscompaniesthatinnovate,becausepeople
willusetheirproducts.
We invest heavily in future product innovation and take risks to try to improve our camera platform and drive longterm user
engagement.Sometimesthismeanssacrificingshorttermengagementtointroduceproducts,likeStories,thatmightchangetheway
peopleuseSnapchat.Additionally,ourproductsoftenusenewtechnologiesandrequirepeopletochangetheirbehavior,suchasusinga
cameratotalkwiththeirfriends.Thismeansthatourproductstakealotoftimeandmoneytodevelop,andmighthaveslowadoption
rates.Whilenotallofourinvestmentswillpayoffinthelongrun,wearewillingtotaketheserisksinanattempttocreatethebestand
mostdifferentiatedproductsinthemarket.
To create effective advertising products that our community might enjoy, we often base our advertising products on existing
consumerproductsandbehavior.Thesameteamthatdesignsourconsumerproductsalsohelpsdesignouradvertisingproducts.This
meansthattheseformatsareengagingandfamiliartoourusers.Forexample,TacoBellsSponsoredLenscampaignthatletpeopleturn
theirheadintoatacoincreasedoverallengagementonourplatformbecauseitprovidedafunCreativeToolthatpeoplewantedtouse
andsharewiththeirfriends.
Otherproducts,suchasourChatService,indirectlyhelpusmonetizeourbusinessbydrivingengagement.Whenausersendsa
Snaptoafriend,thefriendreceivesanotificationpromptingthemtoopentheSnapchatapplication.EvenifthatSnapdidntcontaina
SponsoredCreativeTool,itstillhelpsusmonetizebyincreasingthenumberoftimespeopleopenourapplication.Similarly,whenour
userspostSnapstotheirStories,theycreateadditionalcontentforalloftheirfriendstoview,increasingengagementandtimespenton
Snapchat.
Due to the nature of our products and business, our ability to succeed in any given country is largely dependent on its mobile
infrastructure and its advertising market. These factors influence our product performance, our hosting costs, and our monetization
opportunityineachmarket.
Our focus on innovative camera experiences means that many of our products are data intensive and work better on highend
mobiledevices.Thisisbecausecameraproductsinvolverichformatslikevideo,whichusealotofcellularbandwidthwhenusedfor
communicationandcontentconsumption.Additionally,ourproductsoftenusetechnologiesthatdemandalotofprocessingpowerand
dont work as well on lowerend devices, like the technology behind Lenses. This means that unlike many other free mobile
applications,themajorityofouruserstendtobelocatedinmarketswithhighendmobiledevicesandhighspeedcellularinternet.
Wehavefoundthatthesemarketsarealsolessexpensivetoservebecauseourcloudinfrastructurepartnerstypicallyhavebetter
performanceandcheaperbandwidthinthesecountries.Assuch,ourcoststendtobelowerinthesemarkets.
Substantiallyallofourrevenuecomesfromadvertising,soourabilitytogeneraterevenueinaparticularcountrydependsonthe
sizeofitsadvertisingmarket.Globaladvertisingspendespeciallymobileadvertisingspendisextremelyconcentrated,withnearly
85%ofmobilespendcomingfromthetoptenadvertisingmarkets,accordingtoIDC.Over60%ofourDailyActiveUserscomefrom
countriesonthelist.
We benefit greatly from the fact that many of our users are in markets where we have the highest capital efficiency and
monetizationpotential,allowingustogeneraterevenueandcashflowthatwecantheninvestintofutureproductinnovation.

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OurOpportunity
Wearefortunatetobenefitfromthegrowthofthemobileadvertisingmarketasadvertisersmovemoreoftheiradvertisingspend
from traditional media to mobile. IDC projects that worldwide advertising spend will grow by 18% from $652 billion in 2016 to
$767 billion in 2020. Mobile advertising is the fastest growing segment of this market, and is expected to grow nearly 3x from
$66 billion in 2016 to $196 billion in 2020, while all other advertising spend is expected to decrease by approximately $15 billion
duringthesametimeperiod.
MobileAdvertisingtoDriveFutureAdvertisingGrowth(inbillions)

Source:IDC
Webelievethatoneofthemajorfactorsdrivingthisrapidgrowthistheshiftofpeoplesattentionfromdesktopandtelevision
towardmobile.Aspeoplespendlesstimeontraditionalmedialiketelevision,itbecomesharderforadvertiserstoattainthesamereach
andfrequencytheyhaveachievedinthepast.Ontheotherhand,astimespentonmobilegrows,andespeciallyaspeoplespendmore
timewatchingvideosonmobile,advertiserscantransfertheirtraditionalmediaadvertisingspendtomobiletomakeupforthatlost
reach and frequency. According to forecasts by eMarketer and IDC for 2016, respectively, U.S. adults will spend 26% of their time
consumingmediaonmobiledevices,whileonly13%ofU.S.advertisingwillbespentonmobile.eMarketeralsoprojectsthatpeople
willcontinuetoincreasethetimetheyspendonmobilecomparedtodesktopandtelevision.Wethinkthatthismeansthereisalreadya
significantmobileadvertisingopportunity,whichwillonlygrowasbehaviorcontinuestochange.Furthermore,webelievethatifwe
canbuildascalablemobileadvertisingplatform,wemayhelpexpeditetheshiftofadvertisingdollarsfromtraditionalmediatomobile.

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PercentageofTimeSpentwithMajorMediaperDaybyU.S.Adults(1)

Source:eMarketer

(1) RepresentstheaveragetimespentperdaybyU.S.adultsonmobile,desktop,andtelevisionasapercentageoftotaltimespentper
dayconsumingmajormedia.
PercentageofAdvertisingSpendbyMedia

Source:IDC

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Theshiftinattentiontomobileismorepronouncedamongyoungeraudiences.AccordingtoNielsen,peoplebetweentheagesof
18and24spent35%lesstimewatchingtraditional(liveandtimeshifted)televisioninanaveragemonthduringthesecondquarterof
2016comparedtothesecondquarterof2010.Thisrepresentsourlargestagegroup,withanaverageof36%ofourU.S.DailyActive
Usersbetweentheagesof18and24inthequarterendedDecember31,2016,basedonourinternaldata.Ournextlargestagegroupis
2534at27%,followedby1317at22%.Wethinktheseusersrepresentabigadvertisingopportunityforusbecausetheyareharderto
reachontraditionalmedialiketelevision.
ChangeinTimeSpentWatchingTraditionalTVbyAgeGroup
(Live+TimeShifted,Q22010vs.Q22016)

Source:Nielsen
Ouruserbaseisalsoquicklyexpandingintoolderdemographics,withmorethan50%ofourU.S.dailynewusersbeingover25.
Certainofourmorematuremarketsmayskewolder.Forexample,approximatelyhalfofallsmartphoneusersinNorwayuseSnapchat
dailyaccordingtoeMarketer,andonaverageapproximately46%ofthoseusersareover35.SeeMarket,Industry,andOtherData.
Mostoftheworldsadvertisingspendisconcentratedinafewdevelopedmarkets.Thetoptenadvertisingmarketscommandover
70%ofoveralladvertisingspendandnearly85%ofmobilespend,accordingtoIDC.Over60%ofourDailyActiveUserscomefrom
countriesonthislist,includingover60millionDailyActiveUsersintheUnitedStatesandCanada,andover10millionDailyActive
Users in the United Kingdom. We believe that the concentration of our Daily Active Users in these developed markets will help us
addresstheglobaladvertisingmarketopportunity.
TopTenAdvertisingMarkets

TotalAdvertisingSpend MobileAdvertisingSpend
(inbillions) (inbillions)
Country 2016 2020 2016 2020
UnitedStates $254.8 $291.4 $32.4 $88.8
China(1) 86.4 109.7 12.0 55.1
Japan 38.8 40.0 2.3 3.6
UnitedKingdom 23.5 26.3 4.1 9.8
Germany 17.9 21.0 1.1 3.0
France 12.3 14.3 0.8 2.2
Australia 11.9 14.2 1.4 4.5
Brazil 10.6 12.7 0.2 0.7
Canada 8.5 11.9 1.0 2.9
Italy 8.2 9.4 0.7 2.3

Source:IDC
(1) ExcludesHongKong.

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OurTeam
Ourteamiskind,smart,andcreative.Whenwesaykind,wemeanthetypeofkindnessthatcompelsyoutoletsomeoneknow
that they have something stuck in their teeth even though its a little awkward. We care deeply about kindness because we want to
createaspacethathelpstogiveourteamthecouragetocreate.Wethinkourteamfeelscomfortablecreatingnewthingsbecausethey
aresurroundedbythekindnessoftheirpeersandknowtheyhaveoursupport.
One of the ways we support our team is through our SnapaWish program, which we created to help take care of team
memberswhoarefacingadverseorunusualcircumstances.Inthepastwehaveusedthisprogramtoprovidethingslikelastminute
planeticketsforfamilyemergenciesorimmediatehelp(andarentalcar)whenacarwasstolen.
Listeningtoandunderstandingdifferentpointsofviewisourfavoritewaytofindinspirationandimprovetheproductsthatwe
create. One of the ways we reinforce the importance of listening is by practicing it with each other. We have created a biweekly
Councilprogramforourteamthatencouragesteammemberstoexpressthemselvesandlistentoothers.Webelievethatthistypeof
sharingteachesandremindsourteamtolistenandlearnfromthosearoundthem.
Anotherthingthatmakesourteamspecialistheabilitytoadapt.Wevelearnedovertimehowimportantitistohirepeoplewho
arenotonlyexperienced,butalsoadaptable.Wefocusonunderstandingadaptabilityaspartoftheinterviewprocessandweevaluateit
byunderstandingthelifedecisionsthathavebroughteachteammembertoourcompany.SnapInc.isauniqueplacetoworkandits
helpfultohaveteammembersthatwanttogrowandchangebecausetheyreexcitedabouttryingnewthings.
Wefundamentallybelievethathavingateamofdiversebackgroundsandvoicesworkingtogetherisourbestshotatbeingableto
createinnovativeproductsthatimprovethewaypeopleliveandcommunicate.Therearetwothingswefocusontoachievethisgoal.
Thefirstcreatingadiverseworkplacehelpsusassemblethisteam.Weconveneattheconferences,hostthehackathons,andinvest
intheinstitutionsthatbringusamazingdiversetalenteveryyear.Thesecondcreatinganinclusiveworkplaceismuchhardertoget
right,butwebelieveitisrequiredtounleashthepotentialofhavingadiverseteam.Thatsbecausewebelievediversityisaboutmore
thannumbers.Tous,itisreallyaboutcreatingaculturewhereeveryonecomestoworkknowingthattheyhaveaseatatthetableand
willalwaysbesupportedbothpersonallyandprofessionally.Westartedbychallengingourmanagementteamtosetthistoneeveryday
with each of their teams, and by investing in inclusionfocused programs ranging from community outreach to internal professional
development. We still have a long and difficult road ahead in all of these efforts, but believe they represent one of our biggest
opportunitiestocreateabusinessthatisnotonlysuccessfulbutalsoonethatweareproudtobeapartof.
Wehad1,859employeesasofDecember31,2016.Noneofourdomesticemployeesarerepresentedbyalabororganizationor
are a party to any collective bargaining arrangement. In several foreign jurisdictions, including Canada, China, and France, our
employeesmaybesubjecttocertainnationalcollectivebargainingagreementsthatsetminimumsalaries,benefits,workingconditions,
andterminationrequirements.
OurCommitmenttoPrivacy
Ourapproachtoprivacyissimple:Beupfront,offerchoices,andneverforgetthatourcommunitycomesfirst.
We built Snapchat as an antidote to the contextless communication that has plagued social media. Not so long ago, a
conversationamongfriendswouldbejustthat:aprivatecommunicationinwhichyouknewexactlywhoyouweretalkingto,whatyou
weretalkingabout,andwhetherwhatyouweresayingwasbeingmemorializedforeternity.Somewherealongtheway,socialmedia
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sapped conversations of this valuable context and choice. When we began to communicate online, we lost some of what made
communicationgreat:spontaneity,emotion,honestythefullrangeofhumanexpressionthatmakesushumaninthefirstplace.
We dont think digital communication has to be this way. Thats why choice matters. We build products and services that
emphasize the context of a conversationwho, when, what, and where something is being said. If you dont have the autonomy to
shape the context of a conversation, the conversation will simply be shaped by the permanent feeds that homogenize online
conversations.
WhenyoureadourPrivacyPolicy,wehopethatyoullnoticehowmuchwecareabouttheintegrityofpersonalcommunication.
Forstarters,wevewrittenourPrivacyPolicyinplainlanguagebecausewethinkitsimportantthateveryoneunderstandexactlyhow
wehandletheirinformation.Otherwise,itshardtomakeinformedchoicesabouthowyoucommunicate.Wevealsocreatedarobust
PrivacyCenterwhereweshowthatcontextandchoicearemorethantalkingpoints.There,wepointoutthemanywaysthatuserscan
controlwhoseestheirSnapsandStories,weexplainhowlongcontentwillremainonourservers,andmuchmore.Youllalsofind
there our Transparency Report. Were proud that we published our first Transparency Report just a few years into the companys
existence,longbeforemostcompaniestakethatimportantstep.
Wealsounderstandthatprivacypoliciesnomatterhowambitiousareonlyasgoodasthepeopleandpracticesbehindthose
policies.Whensomeonetrustsustotransmitorstoretheirinformation,weknowwehavearesponsibilitytoprotectthatinformation
and we work hard to keep it secure. New features go through an intense privacyreview processwe debate pros and cons, and we
workhardtobuildproductswereproudofandthatwellwanttouse.WeuseSnapchatconstantly,bothatworkandinourpersonal
lives,andwehandleuserinformationwiththesamecarethatwewantforourfamily,ourfriends,andourselves.
Competition
Wecompetewithothercompaniesineveryaspectofourbusiness,particularlywithcompaniesthatfocusonmobileengagement
and advertising. Many of these companies, such as Apple, Facebook (including Instagram and WhatsApp), Google (including
YouTube), and Twitter, have significantly greater financial and human resources and, in some cases, larger user bases. Given the
breadthofourproductofferings,wealsocompetewithcompaniesthatdevelopproductsorotherwiseoperateinthemobile,camera,
communication,media,andadvertisingindustries.Ourcompetitorsspanfrominternettechnologycompaniesanddigitalplatformsto
traditionalcompaniesinprint,radio,andtelevisionsectorstounderlyingtechnologieslikedefaultsmartphonecamerasandmessaging.
Additionally,ourcompetitionforengagementvariesbyregion.Forinstance,wefacecompetitionfromcompanieslikeKakao,LINE,
Naver (including Snow), and Tencent in Asia. The main bases on which we currently compete with these companies include
engagement,partnerships,advertising,andtalent.
Engagement
Wecompetetoattractandretainourusersattention,bothintermsofreachandengagement.Sinceourproductsandthoseofour
competitorsaretypicallyfree,wecompetebasedonourbrandandthequalityofourproductofferingsratherthanonprice.Wefocuson
constantlyimprovingandexpandingourproductlines.
Partnerships
Werelyonourpartnerecosystemtoprovidecontentandexperiencesandwecompetewithothercompaniesforthosepartners
focusandresources.
Advertising
Wecompeteforadvertisingrevenue,especiallywithrespecttovideoandotherhighlyengagingformats.Webelieveourabilityto
competedependsprimarilyonourreachandabilitytodeliverastrongreturnon

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investment to our advertisers, which is driven by our advertising products, delivery and measurement capabilities, APIs, and other
tools. The industry in which we operate is changing rapidly and we find ourselves in competition with internetbased platforms,
advertisingnetworks,andtraditionalmedia.
Talent
Wecompetetoattractandretainhighlytalentedindividuals,includingsoftwareengineers,designers,andproductmanagers.Our
headquartersinVenice,CaliforniaandourotherprincipalofficesintheLosAngelesareaoffercertainadvantages,suchaslowerlocal
recruitingcompetitionfromothercompaniesandprovidinganenticinglocationtolive,aswellascertaindisadvantagessuchasthe
increased need to recruit remotely and requiring employees to relocate to Venice, California or the Los Angeles area. In addition to
providingcompetitivecompensationpackages,wecompetefortalentbyfosteringacultureofworkinghardtocreategreatproducts
andexperiencesandallowingouremployeestohaveadirectmeaningfulcontributiontonewandexcitingprojects.
Webelievethatwecompetefavorablyonthesefactors.However,theindustriesinwhichwecompeteareevolvingrapidlyandare
becoming increasingly competitive, including the opening of offices in the Los Angeles area by our competitors. For additional
information,seeRiskFactorsThelossofoneormoreofourkeypersonnel,orourfailuretoattractandretainotherhighlyqualified
personnelinthefuture,couldseriouslyharmourbusiness.
Technology
Ourresearchanddevelopmenteffortsfocusonproductdevelopment,advertisingtechnology,andlargescaleinfrastructure.
ProductDevelopment
Weworkrelentlesslytoimproveourproductofferingsbycreatingandimprovingproductsforourusers,partners,andadvertisers.
Wedesignproductsthatcreateandenhancecameraexperiences,andnewtechnologiesareatthecoreofmanyoftheseopportunities.
AdvertisingTechnology
We constantly develop and expand our advertising products, delivery framework, and measurement capabilities. We believe
relevant and engaging advertising tends to be more effective and is better for both our community and advertising partners. Our
technology roadmap centers on efficient advertising delivery, sophisticated buying and campaign optimization, and measurement
solutionsforouradvertisers.
LargescaleInfrastructure
Wespendconsiderableresourcesandinvestmentontheunderlyingarchitecturethatpowersourproducts,suchasoptimizingthe
delivery of billions of videos to hundreds of millions of people every day. We currently partner with Google as our primary
infrastructure partner to support our growing needs. Partnering with Google has allowed us to scale quickly without upfront
infrastructurecosts,lettingusfocusonbuildinggreatproductsandexperiences.Wearecurrentlynegotiatinganagreementwithanother
cloud provider for redundant infrastructure support of our business operations. For further information, see Risk FactorsOur
business depends on our ability to maintain and scale our technology infrastructure. Any significant disruption to our service could
damageourreputation,resultinapotentiallossofusersanddecreaseinuserengagement,andseriouslyharmourbusiness.

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GoogleCloudPlatformLicenseAgreement
In January 2017, we entered into the Google Cloud Platform License Agreement. Under the agreement we were granted a
worldwide, nonexclusive license to access and use certain cloud services provided by Google, including in our web or other
applications.WecurrentlyrunthevastmajorityofourcomputingonGoogleCloudplatformservices.
Theagreementhasaninitialtermoffiveyears.Duringthatinitialterm,wearerequiredtopurchaseatleast$400.0millionof
cloudservicesfromGoogleeachyearbeginningonJanuary30,2017,thoughforeachofthefirstfouryears,upto15%ofthisamount
may be moved to the subsequent year. We have an option to request a reduction in our minimum purchase commitment if we
experience a significant revenue decline. In return for the minimum purchase commitment, we will receive discounted pricing for
certainGoogleCloudplatformservices.Duringtheinitialtermoftheagreement,thebenefitofthatdiscountedpricingcomparedto
standard rates may diminish. If we fail to meet the minimum purchase commitment during any year, we are required to pay the
difference.
After the initial term, the minimum purchase commitment and preferred pricing will terminate, but the agreement will
automaticallyrenewforconsecutivetermsof12monthseach,unlesseitherpartyelectsnottorenewthroughadvancenotice.Either
party may terminate the agreement for the other partys uncured material breach (including certain delinquent payments) and
insolvency.WealsohavetherighttoterminatetheagreementiftheGoogleCloudplatformservicesremainunavailableduetoaforce
majeureevent.
IntellectualProperty
Our success depends in part on our ability to protect our intellectual property and proprietary technologies. To protect our
proprietary rights, we rely on a combination of intellectual property rights in the United States and other jurisdictions, including
patents, trademarks, copyrights, trade secret laws, license agreements, internal procedures, and contractual provisions. We also enter
intoconfidentialityandinventionassignmentagreementswithouremployeesandcontractorsandsignconfidentialityagreementswith
thirdparties.Ourinternalcontrolsrestrictaccesstoprioritytechnology.
AsofDecember31,2016,wehad328issuedpatentsandapproximately220filedpatentapplicationsintheUnitedStatesand
foreigncountriesrelatingtoourcameraplatformandothertechnologies.Ourissuedpatentswillexpirebetween2017and2035.We
maynotbeabletoobtainprotectionforourintellectualproperty,andourexistingandfuturepatents,trademarks,andotherintellectual
propertyrightsmaynotprovideuswithcompetitiveadvantagesordistinguishourproductsandservicesfromthoseofourcompetitors.
Ourpatentapplicationsmaynotresultintheissuanceofpatents,andanyresultingissuedpatentsmayhaveclaimsnarrowerthanthose
in our patent applications. Additionally, our current and future patents, trademarks, and other intellectual property rights may be
contested,circumvented,orfoundunenforceableorinvalid,andwemaynotbeabletopreventthirdpartiesfrominfringingthem.Our
internal controls and contractual provisions may not always be effective at preventing unauthorized parties from obtaining our
intellectualpropertyandproprietarytechnologies.
Welicensecontent,trademarks,technology,andotherintellectualpropertyfromourpartners,andrelyonourlicenseagreements
withthosepartnerstousetheintellectualproperty.Wealsoenterintolicensingagreementswiththirdpartiestoreceiverightstopatents
andotherknowhow.Thirdpartiesmayassertclaimsrelatedtointellectualpropertyrightsagainstourpartnersorus.
Other companies and nonpracticing entities that own patents, copyrights, trademarks, trade secrets, and other intellectual
propertyrightsrelatedtothemobile,camera,communication,media,internet,andothertechnologyrelatedindustriesfrequentlyenter
intolitigationbasedonallegationsofinfringement,misappropriation,andotherviolationsofintellectualpropertyorotherrights.Third
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competitors and nonpracticing entities, may make claims from time to time that we have infringed their patents, trademarks,
copyrights, trade secrets, or other intellectual property rights. We are party to many agreements under which we are obligated to
indemnify our customers, suppliers, and channel partners against such claims. As our business grows and competition increases, we
will likely face more claims related to intellectual property and litigation matters. In addition, to the extent that we gain greater
visibility and market exposure as a public company, we face a higher risk of being the subject of intellectual property infringement
claims from third parties. For additional information, see Risk FactorsWe are currently, and expect to be in the future, party to
patentlawsuitsandotherintellectualpropertyclaimsthatareexpensiveandtimeconsuming.Ifresolvedadversely,lawsuitsandclaims
GovernmentRegulation
We are subject to many U.S. federal and state and foreign laws and regulations, including those related to privacy, rights of
publicity, data protection, content regulation, intellectual property, health and safety, competition, protection of minors, consumer
protection,andtaxation.Theselawsandregulationsareconstantlyevolvingandmaybeinterpreted,applied,created,oramended,ina
mannerthatcouldharmourbusiness.
InDecember2014,theFederalTradeCommissionresolvedaninvestigationintosomeofourearlypracticesbyhandingdowna
final order. That order requires, among other things, that we establish a robust privacy program to govern how we treat user data.
Duringthe20yearlifespanoftheorder,wemustcompletebiannualindependentprivacyaudits.InJune2014,weenteredintoa10
yearassuranceofdiscontinuancewiththeAttorneyGeneralofMarylandimplementingsimilarpractices,includingmeasurestoprevent
minors from creating accounts and providing annual compliance reports. Violating existing or future regulatory orders or consent
decreescouldsubjectustosubstantialmonetaryfinesandotherpenaltiesthatcouldnegativelyaffectourfinancialconditionandresults
ofoperations.
Furthermore,foreigndataprotection,privacy,consumerprotection,contentregulation,andotherlawsandregulationsareoften
more restrictive than those in the United States. It is possible that certain governments may seek to block or limit our products or
otherwiseimposeotherrestrictionsthatmayaffecttheaccessibilityorusabilityofanyorallourproductsforanextendedperiodoftime
orindefinitely.Forexample,wehaveverylimitedaccesstotheChinamarket,aswehavenotyetestablishedanoperatingpresencein
ChinatosupportSnapchat.AccesstoGoogle,whichcurrentlypowersourinfrastructure,isrestrictedinChina.Additionally,notallour
productsareavailableinalllocations,includingSpectacles,andmaynotbeduetosuchlawsandregulations.Wehaveapublicpolicy
team that monitors legal and regulatory developments in the U.S., as well as many foreign countries, and communicates with
policymakersandregulatorsintheU.S.andinternationally.
For additional information, see Risk FactorsIf our security is compromised or if our platform is subjected to attacks that
frustrateorthwartourusersabilitytoaccessourproductsandservices,ourusers,advertisers,andpartnersmaycutbackonorstop
usingourproductsandservicesaltogether.
LegalProceedings
Wearecurrentlyinvolvedin,andmayinthefuturebeinvolvedin,legalproceedings,claims,andinvestigationsintheordinary
courseofourbusiness,includingclaimsforinfringingintellectualpropertyrightsrelatedtoourproductsandthecontentcontributedby
ourusersandpartners.Althoughtheresultsoftheseproceedings,claims,andinvestigationscannotbepredictedwithcertainty,wedo
not believe that the final outcome of these matters is reasonably likely to have a material adverse effect on our business, financial
condition, or results of operations. Regardless of final outcomes, however, any such proceedings, claims, and investigations may
nonetheless impose a significant burden on management and employees and may come with costly defense costs or unfavorable
preliminaryandinterimrulings.

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Facilities
OurcorporateheadquartersarelocatedinandaroundVenice,California,whereweholdapproximately305,000squarefeetacross
severallocations.AsofDecember31,2016,ourglobalfacilitiestotaledanaggregateofapproximately591,000squarefeetofoffice
space,approximately582,500ofwhichwasleasedand8,500ofwhichwasowned.Forapproximately77,000squarefeetofourleased
officespace,wehaveassetsrecordedasconstructioninprogressandbuildings,aswellasacorrespondinglongtermliabilityforour
buildtosuit lease agreements where we are considered the deemed owner of these buildings, for accounting purposes. We also
maintain offices in multiple locations in the United States and internationally in Europe, Asia, and Australia. We expect to add
additionalofficesasweincreaseourheadcountandexpandourbusinesstoothercontinentsandcountries.Webelievethatourfacilities
aresufficientforourcurrentneedsandthat,shoulditbeneeded,additionalfacilitieswillbeavailabletoaccommodatetheexpansionof
ourbusiness.
SnapFoundation
InFebruary2017,weestablishedtheSnapFoundation.Afterthisoffering,weandourcofoundershaveeachpledgedtodonate
upto13,000,000sharesofourClassAcommonstocktotheSnapFoundationoverthecourseofthenext15to20years.Weanticipate
thattheproposedprogramsoftheSnapFoundationwillsupportarts,education,andyouth.

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MANAGEMENT
ExecutiveOfficersandDirectors
Thefollowingtablesetsforthinformationforourdirectorsandexecutiveofficers,andtheiragesasofDecember31,2016.

Name Age Position
ExecutiveOfficers:
EvanSpiegel 26 CoFounder,ChiefExecutiveOfficer,andDirector
RobertMurphy 28 CoFounder,ChiefTechnologyOfficer,andDirector
ImranKhan 39 ChiefStrategyOfficer
AndrewVollero 50 ChiefFinancialOfficer
ChrisHandman 44 GeneralCounsel
TimothySehn 36 SeniorVicePresidentofEngineering
StevenHorowitz 49 VicePresidentofEngineering
NonEmployeeDirectors:
MichaelLynton(1)(2) 57 DirectorandChairmanoftheBoard
JoannaColes(2) 54 Director
A.G.Lafley(1)(2) 69 Director
MitchellLasky 54 Director
StanleyMeresman(3) 70 Director
ScottD.Miller(1)(3) 64 Director
ChristopherYoung(3) 44 Director

(1) Memberofthecompensationcommittee.
(2) Memberofthenominatingandcorporategovernancecommittee.
(3) Memberoftheauditcommittee.
ExecutiveOfficers
EvanSpiegel.Mr.SpiegelisourcofounderandhasservedasourChiefExecutiveOfficerandamemberofourboardofdirectors
sinceMay2012.WebelievethatMr.Spiegelisqualifiedtoserveasamemberofourboardbasedontheperspectiveandexperiencehe
bringsasourcofounderandChiefExecutiveOfficer.
RobertMurphy.Mr.MurphyisourcofounderandhasservedasourChiefTechnologyOfficerandamemberofourboardof
directorssinceMay2012.Mr.MurphyholdsaB.S.inMathematicalandComputationalSciencefromStanfordUniversity.Webelieve
thatMr.Murphyisqualifiedtoserveasamemberofourboardofdirectorsbasedontheperspectiveandexperiencehebringsasour
cofounderandChiefTechnologyOfficer.
ImranKhan.Mr.KhanhasservedasourChiefStrategyOfficersinceJanuary2015.FromMay2011toJanuary2015,Mr.Khan
servedasaManagingDirectorintheInvestmentBankingDivisionatCreditSuisse.FromMarch2004toMay2011,Mr.Khanwasan
EquityAnalystatJ.P.MorganSecuritiesInc.Mr.KhanholdsaB.S.B.A.inFinanceandEconomicsfromtheUniversityofDenver.
AndrewVollero. Mr.Vollero has served as our Chief Financial Officer since February 2016 and previously served as our Vice
President, Finance since August 2015. From September 2000 to August 2015, Mr. Vollero was employed at Mattel, Inc., a toy
manufacturing company, where he served as the Senior Vice President,Corporate Strategy, Development & Investor Relations from
September2005toAugust2015andDivisionCFO,SeniorVicePresident,FinanceandStrategyfromSeptember2000toSeptember
2005. Mr.Vollero holds a B.A. in Mathematics and Economics from Yale University and a Master of Science in Management from
OxfordUniversity.

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Chris Handman. Mr. Handman has served as our General Counsel since May 2014. From March 2000 to April 2014,
Mr.HandmanwasapartnerintheSupremeCourtandAppellateLitigationgroupatHoganLovellsLLPinWashington,D.C.Earlierin
hiscareer,Mr.HandmanservedasalawclerkforJudgePatriciaM.WaldoftheU.S.CourtofAppealsfortheD.C.CircuitandJudge
ColleenKollarKotellyoftheU.S.DistrictCourtfortheDistrictofColumbia.Mr.HandmanholdsaJ.D.fromYaleLawSchoolanda
B.A.inbothPoliticalScienceandInternationalRelationsfromAmericanUniversity.
TimothySehn.Mr.SehnhasservedasourSeniorVicePresidentofEngineeringsinceSeptember2013.PriortojoiningSnapInc.,
Mr. Sehn was employed at Amazon.com, Inc., an ecommerce company, from September 2003 to September 2010, where he held
variouspositions,includingasDirectorofSoftwareDevelopmentfromSeptember2010toSeptember2013.Mr.SehnholdsaB.A.Sc.
fromtheUniversityofWaterloo.
StevenHorowitz.Mr.HorowitzhasservedasourVicePresidentofEngineeringsinceJanuary2015.PriortojoiningSnapInc.,
Mr.HorowitzservedasSeniorVicePresidentofSoftwareEngineeringatMotorolaMobility,LLC,formerlyaGooglecompany,from
December2012throughJanuary2015.FromJanuary2009throughNovember2012,Mr.HorowitzservedasChiefTechnologyOfficer
for Quotient Technology, Inc., a consumer technologies company. Prior to that he worked at Google, Microsoft, and Apple.
Mr.HorowitzholdsaB.A.fromtheUniversityofMichigan,AnnArbor.Mr.Horowitzisalsoamemberoftheboardofdirectorsof
QuotientTechnology,Inc.
NonEmployeeDirectors
Michael Lynton. Mr. Lynton has served on our board of directors since April 2013 and has been Chairman of our board of
directors since September 2016. Mr. Lynton served as Chief Executive Officer of Sony Entertainment Inc., an international
entertainment company, from April 2012 until February 2017, and has served as Chairman and Chief Executive Officer of Sony
PicturesEntertainmentsinceJanuary2004.Mr.LyntonhasalsoservedasamemberoftheboardofdirectorsofAresManagement,L.P.
since2014.Mr.LyntonholdsaB.A.inHistoryandLiteraturefromHarvardCollegeandanM.B.A.fromHarvardBusinessSchool.We
believe that Mr. Lynton is qualified to serve as a member of our board of directors and Chairman due to his extensive leadership
experience.
JoannaColes. Ms. Coles has served on our board of directors since December 2015. Ms. Coles was appointed Chief Content
OfficerofHearstMagazinesinSeptember2016,overseeingeditorialforHearsts300titlesglobally.PriortothatshewasEditorin
ChiefofCosmopolitan,aroleshestartedinSeptember2012.SheeditedMarieClairemagazinefromApril2006toSeptember2012.
Ms.ColesworkedforTheTimesofLondonfromSeptember1998toSeptember2001andservedasNewYorkBureauChiefforThe
Guardian from 1997 to 1998. She is on the board of Women Entrepreneurs New York City, an initiative to encourage female
entrepreneurship, with a focus on underserved communities. Ms. Coles holds a B.A. in English and American literature from the
UniversityofEastAnglia.WebelievethatMs.Colesisqualifiedtoserveasamemberofourboardofdirectorsduetoherextensive
experienceworkingwithcontentprovidersandadvertisers.
A.G.Lafley.Mr.LafleyhasservedonourboardofdirectorssinceJuly2016.Mr.LafleyhasheldvariouspositionswithinThe
Procter&GambleCompanysince1977andservedasitsPresident,ChiefExecutiveOfficer,andasamemberoftheboardofdirectors
fromJune2000untilJune2009andagainfromMay2013toJune2016.HealsoservedasChairmanoftheBoardfromJuly2002to
January2010.FromApril2010toMay2013,Mr.LafleyservedasaconsultantandasaSeniorAdviseratClayton,Dubilier&Rice,
LLC,aprivateequityfirm.Mr.LafleyholdsanA.B.fromHamiltonCollegeandanM.B.A.fromHarvardBusinessSchool.Webelieve
thatMr.Lafleyisqualifiedtoserveasamemberofourboardofdirectorsduetohisextensiveleadershipexperience.
MitchellLasky.Mr.LaskyhasservedonourboardofdirectorssinceDecember2012.Mr.LaskyhasbeenapartneratBenchmark,
aventurecapitalfirm,sinceApril2007.FromNovember2000toFebruary2006,

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Mr. Lasky served as Chief Executive Officer of JAMDAT Mobile, Inc., a publicly traded mobile games company, and served as
ExecutiveVicePresident,Mobile&OnlineatElectronicArts,avideogamecompany,afteritacquiredJAMDATinFebruary2006,
untilApril2007.Mr.LaskyholdsaB.A.inHistoryandLiteraturefromHarvardCollegeandaJ.D.fromtheUniversityofVirginia
SchoolofLaw.WebelieveMr.Laskyisqualifiedtoserveasamemberofourboardofdirectorsduetohisextensiveexperiencewith
socialmediaandtechnologycompanies,aswellashisexperienceasaventurecapitalistinvestingintechnologycompanies.
StanleyMeresman.Mr.MeresmanhasservedonourboardofdirectorssinceJuly2015.Duringthelasttenyears,Mr.Meresman
has served on the boards of directors of various public and private companies, including service as chair of the audit committee for
someofthesecompanies.Hecurrentlyservesontheboardofdirectors,andaschairoftheauditcommittee,ofPaloAltoNetworks,
Inc.HeservedasamemberoftheboardofdirectorsofLinkedInCorporationfromOctober2010toDecember2016,ZyngaInc.from
June2011toJune2015,MeruNetworks,Inc.fromSeptember2010toMay2013,andRiverbedTechnologies,Inc.fromMarch2005to
May2012.FromJanuary2004toDecember2004,Mr.MeresmanwasaVenturePartnerwithTechnologyCrossoverVentures,aprivate
equity firm, and was General Partner and Chief Operating Officer of Technology Crossover Ventures from November 2001 to
December2003.DuringthefouryearsbeforejoiningTechnologyCrossoverVentures,Mr.Meresmanwasaprivateinvestorandboard
member and advisor to several technology companies. From 1989 to 1997, Mr. Meresman served as the Senior Vice President and
ChiefFinancialOfficerofSiliconGraphics,Inc.Mr.MeresmanholdsaB.S.inIndustrialEngineeringandOperationsResearchfrom
theUniversityofCalifornia,BerkeleyandanM.B.A.fromtheStanfordGraduateSchoolofBusiness.WebelievethatMr.Meresmanis
qualifiedtoserveasamemberofourboardofdirectorsandchairofourauditcommitteeduetohisbackgroundasamemberofthe
boardandchairoftheauditcommitteeofotherpubliccompaniesandhisfinancialandaccountingexpertisefromhispriorextensive
experienceaschieffinancialofficeroftwopubliclytradedcompanies.
ScottD.Miller.Mr.MillerhasservedonourboardofdirectorssinceOctober2016.Mr.MillerisafounderandChiefExecutive
OfficerofG100Companies,whichoperatesG100NetworkandSSA&Company.BeforejoiningG100CompaniesinMarch2004,
Mr.MillerwasemployedatHyattHotelsCorporation,aglobalhospitalitycompany,whereheservedasnonexecutivevicechairman
fromAugust2003toDecember2004,presidentfromJanuary1999toAugust2003,andexecutivevicepresidentfromSeptember1997
to July 2003. Mr. Miller currently serves on the board of directors of QTS Realty Trust, Inc. and served on the boards of Affinion
Group, Inc. from 2011 to 2013, AXA Equitable Life Insurance Company from 2002 to 2012, Orbitz Worldwide, Inc. from 2003 to
2004, and NAVTEQ corporation from 2002 to 2006. He also serves on several private company boards. Mr. Miller holds a B.S. in
HumanBiologyfromStanfordUniversityandanM.B.A.fromtheUniversityofChicago.WebelievethatMr.Millerisqualifiedto
serveasamemberofourboardofdirectorsduetohisextensiveleadershipexperience.
ChristopherYoung. Mr.Young has served on our board of directors since October 2016. Since October 2014, Mr.Young has
servedasSeniorVicePresidentandGeneralManager,IntelSecurityGroupatIntelCorporation,amultinationaltechnologycompany.
From November 2011 to September 2014, Mr. Young served as Senior Vice President, Security & Government Group at Cisco
Systems,Inc.atechnologynetworkingcompany.FromAugust2010toOctober2011,Mr.YoungservedasSeniorVicePresident&
GeneralManager,EndUserComputingatVMware,Inc.,asoftwarecompany.FromJanuary2011toAugust2016,Mr.Youngserved
on the board of directors of Rapid7, Inc., a security software company. Mr. Young holds a B.A. in Public Policy from Princeton
UniversityandanM.B.A.fromHarvardBusinessSchool.WebelievethatMr.Youngisqualifiedtoserveasamemberofourboardof
directorsduetohisextensiveexperiencewithtechnologycompanies.
Therearenofamilyrelationshipsamonganyofthedirectorsorexecutiveofficers.

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IndependentChairman
OurboardofdirectorshasappointedMr.LyntontoserveasourindependentChairmanofourboardofdirectors.AsChairmanof
ourboardofdirectors,Mr.Lyntonpresidesoverperiodicmeetingsofourindependentdirectorsandperformssuchadditionaldutiesas
ourboardofdirectorsmayotherwisedetermineanddelegate.
CompositionofOurBoardofDirectors
Certainmembersofourboardofdirectorswereelectedundertheprovisionsofavotingagreement.Underthetermsofthisvoting
agreement,thestockholderswhoarepartytothevotingagreementhaveagreedtovotetheirrespectivesharestoelect:(1)onedirector
designatedbyBenchmarkCapitalPartners,currentlyMr.Lasky(2)twodirectorsdesignatedbytheholdersoftheSeriesFPpreferred
stock, currently Mr. Spiegel and Mr. Murphy and (3) one individual designated by the other members of the board of directors,
currentlyMr.Lynton.Thevotingagreementwillterminateontheclosingofthisoffering.Followingthisoffering,nostockholderwill
haveanyspecialrightsregardingtheelectionordesignationofmembersofourboardofdirectors.Thereisnocontractualarrangement
by which Ms. Coles, Mr. Lafley, Mr. Meresman, Mr. Miller, and Mr. Young were appointed to our board of directors. Our current
directorswillcontinuetoserveasdirectorsuntiltheirresignation,removal,orsuccessorisdulyelected.
Ourboardofdirectorswillconsistofninemembersontheclosingofthisoffering.
So long as any shares of our Class C common stock are outstanding, we will not have a classified board of directors, and all
directorswillbeelectedforannualterms.
FollowingtheconversionofallofourClassCcommonstocktoClassBcommonstock,andsubsequentconversionofallofour
ClassBcommonstocktoClassAcommonstock,wewillhaveaclassifiedboardofdirectorsconsistingofthreeclasses.Eachclass
willbeapproximatelyequalinsize,witheachdirectorservingstaggeredthreeyearterms.Directorswillbeassignedtoaclassbythe
thencurrentboardofdirectors.
Whenourboardofdirectorsisclassified,weexpectthatanyadditionaldirectorshipsresultingfromanincreaseinthenumberof
directorswillbedistributedamongthethreeclassessothat,asnearlyaspossible,eachclasswillconsistofonethirdofthedirectors.
The division of our board of directors into three classes with staggered threeyear terms may delay or prevent a change of our
managementorachangeincontrol.
DirectorIndependence
Our board of directors has undertaken a review of the independence of each director. Based on information provided by each
director concerning his or her background, employment, and affiliations, our board of directors has determined that Ms. Coles,
Mr.Lafley,Mr.Lasky,Mr.Lynton,Mr.Meresman,Mr.Miller,andMr.Youngdonothaverelationshipsthatwouldinterferewiththe
exerciseofindependentjudgmentincarryingouttheresponsibilitiesofadirectorandthateachofthesedirectorsisindependentas
thattermisdefinedunderthelistingstandards.Inmakingthesedeterminations,ourboardofdirectorsconsideredthecurrentandprior
relationships that each nonemployee director has with our company and all other facts and circumstances our board of directors
deemedrelevantindeterminingtheirindependence,includingthebeneficialownershipofoursharesbyeachnonemployeedirector
andthetransactionsdescribedinRelatedPersonTransactions.
CommitteesofOurBoardofDirectors
Our board of directors has established an audit committee, a compensation committee, and a nominating and corporate
governancecommittee.Thecompositionandresponsibilitiesofeachofthecommitteesofourboardofdirectorsaredescribedbelow.
Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of
directorsmayestablishothercommitteesasitdeemsnecessaryorappropriatefromtimetotime.

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AuditCommittee
OurauditcommitteeconsistsofMr.Meresman,Mr.Miller,andMr.Young,eachofwhomourboardofdirectorshasdetermined
satisfies the independence requirements under NYSE listing standards and Rule10A3(b)(1) of the Exchange Act. The chair of our
audit committee is Mr. Meresman, who our board of directors has determined is an audit committee financial expert within the
meaning of SEC regulations. Each member of our audit committee can read and understand fundamental financial statements in
accordancewithapplicablerequirements.Inarrivingatthesedeterminations,theboardofdirectorshasexaminedeachauditcommittee
membersscopeofexperienceandthenatureoftheiremploymentinthecorporatefinancesector.
The primary purpose of the audit committee is to discharge the responsibilities of our board of directors with respect to our
corporateaccountingandfinancialreportingprocesses,systemsofinternalcontrol,andfinancialstatementaudits,andtooverseeour
independentregisteredaccountingfirm.Specificresponsibilitiesofourauditcommitteeinclude:

helpingourboardofdirectorsoverseeourcorporateaccountingandfinancialreportingprocesses

managing the selection, engagement, qualifications, independence, and performance of a qualified firm to serve as the

independentregisteredpublicaccountingfirmtoauditourfinancialstatements

discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with

managementandtheindependentaccountants,ourinterimandyearendoperatingresults

developingproceduresforemployeestosubmitconcernsanonymouslyaboutquestionableaccountingorauditmatters

reviewingrelatedpersontransactions

obtainingandreviewingareportbytheindependentregisteredpublicaccountingfirmatleastannually,thatdescribesour
internalqualitycontrolprocedures,anymaterialissueswithsuchprocedures,andanystepstakentodealwithsuchissues
whenrequiredbyapplicablelawand

approving, or, as permitted, preapproving, audit and permissible nonaudit services to be performed by the independent

registeredpublicaccountingfirm.
CompensationCommittee
OurcompensationcommitteeconsistsofMr.Lafley,Mr.Lynton,andMr.Miller.OurboardofdirectorshasdeterminedthatMr.
Lafley,Mr.Lynton,andMr.MillerareeachindependentunderNYSElistingstandards,anonemployeedirectorasdefinedinRule
16b3promulgatedundertheExchangeActandanoutsidedirectorasthattermisdefinedinSection162(m)oftheCode.Thechair
ofourcompensationcommitteeisMr.Lynton.
Theprimarypurposeofourcompensationcommitteeistodischargetheresponsibilitiesofourboardofdirectorsinoverseeing
our compensation policies, plans, and programs and to review and determine the compensation to be paid to our executive officers,
directors,andotherseniormanagement,asappropriate.Specificresponsibilitiesofourcompensationcommitteeinclude:

reviewingandapprovingthecompensationofourchiefexecutiveofficer,otherexecutiveofficers,andseniormanagement

reviewingandrecommendingtoourboardofdirectorsthecompensationpaidtoourdirectors

reviewingandapprovingthecompensationarrangementswithourexecutiveofficersandotherseniormanagement

administeringourequityincentiveplansandotherbenefitprograms

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reviewing, adopting, amending, and terminating, incentive compensation and equity plans, severance agreements, profit
sharing plans, bonus plans, changeofcontrol protections, and any other compensatory arrangements for our executive
officersandotherseniormanagement

reviewing,evaluating,andrecommendingtoourboardofdirectorssuccessionplansforourexecutiveofficersand

reviewing and establishing general policies relating to compensation and benefits of our employees, including our overall

compensationphilosophy.
NominatingandCorporateGovernanceCommittee
Our nominating and corporate governance committee consists of Ms. Coles, Mr. Lafley, and Mr. Lynton. The chair of our
nominating and corporate governance committee is Mr. Lafley. Our board of directors has determined that each member of the
nominatingandcorporategovernancecommitteeisindependentundertheNYSElistingstandards,anonemployeedirector,andfree
fromanyrelationshipthatwouldinterferewiththeexerciseofhisorherindependentjudgment.
Specificresponsibilitiesofournominatingandcorporategovernancecommitteeinclude:

identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees

recommendedbystockholders,toserveonourboardofdirectors

considering and making recommendations to our board of directors regarding the composition and chairmanship of the

committeesofourboardofdirectors

institutingplansorprogramsforthecontinuingeducationofourboardofdirectorsandorientationofnewdirectors

developingandmakingrecommendationstoourboardofdirectorsregardingcorporategovernanceguidelinesandmatters

and

overseeingperiodicevaluationsoftheboardofdirectorsperformance,includingcommitteesoftheboardofdirectorsand

management.
CodeofConduct
We have adopted a Code of Conduct that applies to all our employees, officers, and directors. This includes our principal
executiveofficer,principalfinancialofficer,andprincipalaccountingofficerorcontroller,orpersonsperformingsimilarfunctions.The
full text of our Code of Conduct will be posted on our website at www.snap.com. We intend to disclose on our website any future
amendments of our Code of Conduct or waivers that exempt any principal executive officer, principal financial officer, principal
accountingofficerorcontroller,personsperformingsimilarfunctions,orourdirectorsfromprovisionsintheCodeofConduct.
CompensationCommitteeInterlocksandInsiderParticipation
Noneofthemembersofthecompensationcommitteeiscurrently,orhasbeenatanytime,oneofourofficersoremployees.None
ofourexecutiveofficerscurrentlyserves,orhasservedduringthelastyear,asamemberoftheboardofdirectorsorcompensation
committee of any entity that has one or more executive officers serving as a member of our board of directors or compensation
committee.
DirectorCompensation
The following table sets forth information concerning the compensation paid to our directors who are not named executive
officersduringthefiscalyearendedDecember31,2016.Thecompensationreceivedby

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Mr.SpiegelasanemployeeofthecompanyispresentedinExecutiveCompensationSummaryCompensationTable.Ms.Coles,
Mr.Lafley,Mr.Meresman,Mr.Miller,andMr.YoungholdRSUsthatvestandaresettledonthesatisfactionofboth(i)aservicebased
vestingconditionand(ii)aperformancecondition.Theperformanceconditionwillbesatisfiedontheearlierof:(a)theeffectivedate
oftheregistrationstatementinconnectionwiththisofferingor(b)achangeofcontrol(asdefinedinour2014Plan).Theservicebased
vestingrequirementforeachofMs.Coles,Mr.Lafley,Mr.Meresman,Mr.Miller,andMr.Youngarefurtherdescribedbelow.Except
asdescribedinthefootnotestothetablebelow,wedonotgenerallyprovidecashcompensationtoournonemployeedirectors.

Name StockAwards(1) Other Total
MichaelLynton $ $ $
JoannaColes(2) 75,866 35,000 110,866
A.G.Lafley(3) 2,529,321 83,333 2,612,654
MitchellLasky
StanleyMeresman(4)
ScottD.Miller(5) 1,060,251 5,833 1,066,084
RobertMurphy(6) 259,419 259,419
ChristopherYoung(7) 1,060,251 5,833 1,066,084

(1) AmountsreportedrepresenttheaggregategrantdatefairvalueofRSUswithoutregardtoforfeituresgrantedtothenonemployee
membersofourboardofdirectorsduring2016underour2014Plan,computedinaccordancewithASCTopic718.Thevaluation
assumptionsusedincalculatingthefairvalueoftheRSUsissetforthinManagementsDiscussionandAnalysisofFinancial
ConditionandResultsofOperationsCriticalAccountingPoliciesandEstimatesStockBasedCompensation.Theseamounts
donotreflecttheactualeconomicvaluethatmayberealizedbythedirector.
(2) Ms.ColesjoinedourboardofdirectorsinDecember2015.InconnectionwithMs.Colesserviceonourboardofdirectors,we
agreed to pay her a $35,000 annual cash retainer, paid on a quarterly basis after completion of each full quarter. In December
2015, we granted Ms. Coles RSUs for 7,488 shares of Class A common stock under our 2014 Plan and these RSUs were
outstandingasofDecember31,2016.Theservicebasedvestingconditionwassatisfiedinequalmonthlyinstallmentsoverone
year of service commencing on December 4, 2015. In July 2016, we granted Ms. Coles RSUs for 4,882 shares of Class A
common stock under our 2014 Plan and these RSUs were outstanding as of December 31, 2016. The servicebased vesting
conditionwassatisfiedinequalmonthlyinstallmentsoveroneyearofservicecommencingonDecember4,2015.
(3) Mr.LafleyjoinedourboardofdirectorsinJuly2016.InconnectionwithMr.Lafleysserviceonourboardofdirectors,weagreed
topayhima$200,000annualcashretainertocoverthecostsofhistraveltoourmeetingsandevents,paidonaquarterlybasis
after completion of each full quarter. In July 2016, we granted Mr. Lafley RSUs for 162,762 shares of ClassA common stock
underour2014Plan.Theservicebasedvestingconditionwillbesatisfiedinequalmonthlyinstallmentsoverfouryearsofservice
commencingonJuly15,2016andtheseRSUswereoutstandingasofDecember31,2016.Intheeventofachangeincontrol,the
servicebasedvestingconditionoftheRSUswillbedeemedsatisfiedfor100%oftheRSUsthathavenotyetsatisfiedtheservice
basedvestingrequirement,immediatelybeforetheclosingofsuchchangeincontrol.
(4) Mr.MeresmanjoinedourboardofdirectorsinJuly2015.InJuly2015,wegrantedMr.MeresmanRSUsfor162,762sharesof
ClassAcommonstockunderwhichtheservicebasedvestingconditionwillbesatisfiedinequalquarterlyinstallmentsoverfour
years of service commencing on July 17, 2015 and these RSUs were outstanding as of December 31, 2016. In the event of a
changeincontrol,theservicebasedvestingconditionoftheRSUswillbedeemedsatisfiedfor100%oftheRSUsthathavenot
yetsatisfiedtheservicebasedvestingcondition,immediatelybeforetheclosingofsuchchangeincontrol.
(5) Mr.MillerjoinedourboardofdirectorsinOctober2016.InconnectionwithMr.Millersserviceonourboardofdirectors,we
agreedtopayhima$35,000annualcashretainer,paidonaquarterlybasisaftercompletionofeachfullquarter.InOctober2016,
wegrantedMr.MillerRSUsfor65,106sharesofClassA

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commonstockunderwhichtheservicebasedvestingconditionwillbesatisfiedinequalmonthlyinstallmentsoverfouryearsof
servicecommencingonOctober26,2016andtheseRSUswereoutstandingasofDecember31,2016.Intheeventofachangein

control,theservicebasedvestingconditionoftheRSUswillbedeemedsatisfiedfor100%oftheRSUsthathavenotyetsatisfied
theservicebasedvestingcondition,immediatelybeforetheclosingofsuchchangeincontrol.
(6) Mr.Murphydoesnotreceiveanycompensationforserviceasadirector.Amountsreportedrepresent(i)$251,603forhisbase
salaryasanemployee,(ii)$7,548in401(k)contributionsmadebyusonbehalfofMr.Murphy,and(iii)$268forlifeinsurance
premiumspaidbyusonbehalfofMr.Murphy.
(7) Mr.YoungjoinedourboardofdirectorsinOctober2016.InconnectionwithMr.Youngsserviceonourboardofdirectors,we
agreedtopayhima$35,000annualcashretainer,paidonaquarterlybasisaftercompletionofeachfullquarter.InOctober2016,
wegrantedMr.YoungRSUsfor65,106sharesofClassAcommonstockunderwhichtheservicebasedvestingconditionwillbe
satisfied in equal monthly installments over four years of service commencing on October 26, 2016 and these RSUs were
outstandingasofDecember31,2016.Intheeventofachangeincontrol,theservicebasedvestingconditionoftheRSUswillbe
deemed satisfied for 100% of the RSUs that have not yet satisfied the servicebased vesting condition, immediately before the
closingofsuchchangeincontrol.
Wecurrentlyreimburseourdirectorsfortheirreasonableoutofpocketexpensesinconnectionwithattendingboardofdirectors
andcommitteemeetings,otherthanMr.Lafley,whosetravelexpenseretainerisdescribedabove.
NonEmployeeDirectorCompensationPolicy
We intend to adopt a nonemployee director compensation policy following the closing of this offering and on terms to be
determined at a later date by our board of directors. Under the nonemployee director policy, our nonemployee directors will be
eligibletoreceivecompensationforserviceonourboardofdirectorsandcommitteesofourboardofdirectors.

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EXECUTIVECOMPENSATION
Ournamedexecutiveofficers,consistingofourprincipalexecutiveofficerandthenexttwomosthighlycompensatedexecutive
officersasofDecember31,2016,were:

EvanSpiegel,CoFounderandChiefExecutiveOfficer

ImranKhan,ChiefStrategyOfficerand

TimothySehn,SeniorVicePresidentofEngineering.
SummaryCompensationTable
Thefollowingtablepresentsallofthecompensationawardedtoorearnedbyorpaidtoournamedexecutiveofficersduringthe
fiscalyearsendedDecember31,2015and2016.

AllOther
NameandPrincipalPosition Year Salary Bonus(1) StockAwards(2) Compensation(3) Total
EvanSpiegel 2016 $503,205 $1,000,000 $ $ 901,635(4) $ 2,404,840
CoFounderandChiefExecutive 2015 363,715 1,000,000 344,756(5) 1,708,471
Officer
ImranKhan 2016 241,539 5,239,460 14,658 5,495,657
ChiefStrategyOfficer 2015 230,000 145,292,145 348 145,522,493
TimothySehn(6) 2016 400,152 1,000,000 40,000,020 8,348 41,408,520
SeniorVicePresidentof
Engineering

(1) Amountsreportedrepresentbonusesawardedatthediscretionofourboardofdirectors.
(2) Amounts reported represent the aggregate grant date fair value of RSUs without regard to forfeitures granted to our named
executive officers under our 2014 Plan, computed in accordance with ASC Topic 718. The valuation assumptions used in
calculatingthefairvalueoftheRSUsissetforthinManagementsDiscussionandAnalysisofFinancialConditionandResults
ofOperationsCriticalAccountingPoliciesandEstimatesStockBasedCompensation.Thisamountdoesnotreflecttheactual
economicvaluethatmayberealizedbythenamedexecutiveofficer.
(3) Amountsreportedinclude401(k)contributionsandlifeinsurancepremiumspaidbyusonbehalfofthenamedexecutiveofficer.
(4) Amountreportedincludes$890,339forsecurityforMr.Spiegel.
(5) Amountreportedincludes(i)$328,747forsecurityforMr.Spiegeland(ii)$15,766forpersonaltravel.
(6) Mr.SehnwasnotanamedexecutiveofficerfortheyearendedDecember31,2015.
OutstandingEquityAwardsasofDecember31,2016
The following table presents information regarding outstanding equity awards held by our named executive officers as of
December31,2016.Allawardsweregrantedunderour2012Planor2014Plan,asnotedbelow.

OptionAwards StockAwards
Numberof Numberof
Securities Securities
Underlying Underlying Numberof MarketValueof
Unexercised Unexercised Option Option SharesorUnitsofStock SharesorUnitsofStock
Grant Options(#) Options(#) Exercise Expiration ThatHaveNotVested ThatHaveNotVested
Name Date Exercisable Unexercisable Price($) Date (#)(1) ($)(2)
EvanSpiegel
ImranKhan 04/06/2015 7,094,344(3)(5)
TimothySehn 09/06/2013
6,160,000(4)
2,640,000(4)
$ 0.582 09/05/2023
10/26/2016 2,604,168(5)(6)

(1) Eachofournamedexecutiveofficers,otherthanMr.Spiegel,holdRSUsthatonlyvestandsettleonthesatisfactionofboth(i)a
servicebasedvestingconditionand(ii)aperformancecondition.Theperformance

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conditionwillbesatisfiedontheearlierof:(a)theeffectivedateoftheregistrationstatementinconnectionwiththisoffering,or
(b)achangeofcontrol(asdefinedinour2012Planor2014Plan,asapplicable).Theservicebasedvestingconditionforeachof
ournamedexecutiveofficersisfurtherdescribedbelow.
(2) ThemarketpriceforourClassAcommonstockorClassBcommonstock,asapplicable,isbasedontheassumedinitialpublic
offeringpriceof$pershare,themidpointoftheestimatedpricerangesetforthonthecoverpageofthisprospectus.
(3) TheseRSUsrepresentsharesofClassBcommonstockgrantedunderour2012Plan.Theservicebasedconditionwassatisfied
for2,364,780sharesunderlyingtheRSUsonDecember31,2016.Theservicebasedconditionwillbesatisfiedasfollows:5%of
the RSUs will have the servicebased condition satisfied on January 16, 2017 30% of the RSUs will have the servicebased
requirement satisfied in equal quarterly installments during the 12month period following January 16, 2017 and 40% of the
RSUs will have the servicebased condition satisfied in equal quarterly installments during the 12month period following
January16,2018.
(4) Represents an option to purchase Class B common stock granted under our 2012 Plan. As of December 31, 2016, 6,160,000
shareswerevestedandexercisable,and88,000sharessubjecttotheoptionwillvestandbecomeexercisableeachmonthoverthe
ninemonthperiodfollowingDecember31,2016.Theunvestedsharessubjecttothisoptionaresubjecttoacceleratedvestingas
describedinthesectiontitledEmployment,Severance,andChangeinControlAgreements.
(5) The unvested shares subject to these RSUs are subject to accelerated vesting as described in the section titled Employment,
Severance,andChangeinControlAgreements.
(6) TheseRSUsrepresentsharesofClassAcommonstockgrantedunderour2014Plan.Theservicebasedconditionwassatisfied
fornosharesunderlyingtheRSUsonDecember31,2016.Theservicebasedconditionwillbesatisfiedasfollows:10%ofthe
RSUs will have the servicebased condition satisfied on September 1, 2017 20% of the RSUs will have the servicebased
requirementsatisfiedinequalquarterlyinstallmentsduringthe12monthperiodfollowingSeptember1,201730%oftheRSUs
willhavetheservicebasedconditionsatisfiedinequalquarterlyinstallmentsduringthe12monthperiodfollowingSeptember1,
2018and40%oftheRSUswillhavetheservicebasedconditionsatisfiedinequalquarterlyinstallmentsduringthe12month
periodfollowingSeptember1,2019.
EmergingGrowthCompanyStatus
Weareanemerginggrowthcompany,asdefinedintheJOBSAct.Asanemerginggrowthcompanywewillbeexemptfrom
certainrequirementsrelatedtoexecutivecompensation,includingtherequirementstoholdanonbindingadvisoryvoteonexecutive
compensationandtoprovideinformationrelatingtotheratiooftotalcompensationofourChiefExecutiveOfficertothemedianofthe
annual total compensation of all of our employees, each as required by the Investor Protection and Securities Reform Act of 2010,
whichispartoftheDoddFrankAct.
PensionBenefits
Our named executive officers did not participate in, or otherwise receive any benefits under, any pension or retirement plan
sponsoredbyusduringthefiscalyearendedDecember31,2016.
NonqualifiedDeferredCompensation
Our named executive officers did not participate in, or earn any benefits under, a nonqualified deferred compensation plan
sponsoredbyusduringthefiscalyearendedDecember31,2016.
Employment,Severance,andChangeinControlAgreements
OfferLetters
Wehaveofferletterswitheachofourexecutiveofficers.Theofferlettersgenerallyprovideforatwillemploymentandsetforth
theexecutiveofficersinitialbasesalary,eligibilityforemployeebenefits,and

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confirmationofthetermsofpreviouslyissuedequitygrants,includinginsomecasesseverancebenefitsonaqualifyingterminationof
employment. If an executive officer dies, all outstanding RSUs will be deemed to satisfy the servicebased vesting requirement. In
addition,eachofournamedexecutiveofficershasexecutedourstandardproprietaryinformationandinventionsagreement.Thekey
termsofemploymentwithourexecutiveofficersaredescribedbelow.
EvanSpiegel
InOctober2016,weenteredintoanamendedandrestatedofferletteragreementwithEvanSpiegel,ourcofounderandChief
ExecutiveOfficer,withrespecttohiscontinuingemploymentwithus.Theofferletterprovidesforanannualbasesalaryof$500,000,
which will be reduced to $1 on the effective date of the registration statement in connection with this offering, and an annual cash
bonusof$1,000,000basedonachievementofperformancecriteriatobemutuallyagreedonbyMr.Spiegelandourboardofdirectors,
providedthat,afterourinitialpublicoffering,Mr.Spiegelwillnotbeentitledtoanybonusexceptasmaybedeterminedbyourboard
ofdirectors.Underthetermsofhisofferletter,Mr.SpiegelwillbegrantedanawardofRSUsforsharesofSeriesFPpreferredstock
representing3.0%ofouroutstandingcapitalstockonanasconvertedbasisontheclosingofthisoffering,whichwillbefullyvestedon
theclosingofthisofferingandsuchshareswillbedeliveredtoMr.Spiegelinequalquarterlyinstallmentsoverthreeyearsbeginningin
thethirdfullcalendarquarterfollowingthisoffering.ForthepurposesofMr.Spiegelsofferletter,outstandingcapitalstockincludes
sharessoldbyusinthisofferingandallsharessubjecttooutstandingrestrictedstockunitsthat,ontheclosingofthisoffering,havemet
theperformanceconditionandservicebasedvestingcondition.OurboardofdirectorsapprovedtheawardtoMr.SpiegelinJuly2015
to motivate him to continue growing our business and improving our financial results so that we could undertake an initial public
offering,whichweregardasanimportantmilestonethatwillprovideliquiditytoourstockholdersandemployees.
RobertMurphy
InOctober2016,weenteredintoanamendedandrestatedofferletteragreementwithRobertMurphy,ourcofounderandChief
TechnologyOfficerwithrespecttohiscontinuingemploymentwithus.Mr.MurphysannualbasesalaryasofDecember31,2016was
$250,000.
ImranKhan
InOctober2016,weenteredintoanamendedandrestatedofferletteragreementwithImranKhan,ourChiefStrategyOfficer,
withrespecttohiscontinuingemploymentwithus.Mr.KhansannualbasesalaryasofDecember31,2016was$240,000.
If Mr. Khans employment is terminated without cause or he terminates his employment for good reason, within 12 months
followingachangeincontrol,inadditiontotheRSUsthathavesatisfiedtheservicebasedvestingrequirement,anadditional50%of
thethenoutstandingRSUswillbedeemedtosatisfytheservicebasedvestingrequirement.Mr.Khanmustsignareleaseofclaims
agreementasapreconditionofreceivingthisterminationbenefit.
AndrewVollero
In October 2016, we entered into an amended and restated offer letter agreement with Andrew Vollero, our Chief Financial
Officer,withrespecttohiscontinuingemploymentwithus.Mr.VollerosannualbasesalaryasofDecember31,2016was$300,000.
Underthetermsofhisamendedandrestatedofferletter,Mr.Volleroreceivesanannualsupplementalpaymentof$200,000duringthe
firsttwoyearsofhisemployment.
If Mr. Volleros employment is terminated without cause or he terminates his employment for good reason, within 12 months
followingachangeincontrol,inadditiontotheRSUsthathavesatisfiedtheservicebased

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vestingrequirement,anadditional50%ofthethenoutstandingRSUswillbedeemedtosatisfytheservicebasedvestingrequirement.
Mr.Volleromustsignareleaseofclaimsagreementasapreconditionofreceivingthisterminationbenefit.
ChrisHandman
InOctober2016,weenteredintoanamendedandrestatedofferletteragreementwithChrisHandman,ourGeneralCounsel,with
respecttohiscontinuingemploymentwithus.Mr.HandmansannualbasesalaryasofDecember31,2016was$475,000.
IfMr.Handmansemploymentisterminatedwithoutcauseorheterminateshisemploymentforgoodreason,within12months
following a change in control, all outstanding RSUs will be deemed to satisfy the servicebased vesting requirement as of his
terminationdate.Mr.Handmanmustsignareleaseofclaimsagreementasapreconditionofreceivingthisterminationbenefit.
TimothySehn
InOctober2016,weenteredintoanamendedandrestatedofferletteragreementwithTimothySehn,ourSeniorVicePresidentof
Engineering.Mr.SehnsannualbasesalaryasofDecember31,2016was$500,000.InOctober2016,Mr.SehnwasgrantedRSUsfor
1,302,084sharesofClassAcommonstock.
If Mr. Sehns employment is terminated without cause or he terminates his employment for good reason, within 12 months
followingachangeincontrol,440,000sharessubjecttohisoptiongrant(or,iftherearefewerthan440,000sharesthenunvested,all
then unvested shares) will vest in full as of his termination date and, in addition to the RSUs that have satisfied the servicebased
vestingrequirement,1/16thoftheRSUsforeachcompletedquarterofhiscontinuedemploymentwillbedeemedtosatisfytheservice
basedvestingrequirement.Mr.Sehnmustsignareleaseofclaimsagreementasapreconditionofreceivingthisterminationbenefit.
StevenHorowitz
In October 2016, we entered into an amended and restated offer letter agreement with Steven Horowitz, our Vice President of
Engineering.Mr.HorowitzsannualbasesalaryasofDecember31,2016was$300,000.
IfMr.Horowitzsemploymentisterminatedwithoutcauseorheterminateshisemploymentforgoodreason,within12months
following a change in control, all outstanding RSUs will be deemed to satisfy the servicebased vesting requirement as of his
terminationdate.Mr.Horowitzmustsignareleaseofclaimsagreementasapreconditionofreceivingthisterminationbenefit.
EmployeeBenefitPlans
Webelievethatourabilitytograntequitybasedawardsisavaluableandnecessarycompensationtoolthatalignsthelongterm
financialinterestsofouremployees,consultants,anddirectorswiththefinancialinterestsofourstockholders.Inaddition,webelieve
that our ability to grant options and other equitybased awards helps us to attract, retain, and motivate employees, consultants, and
directors,andencouragesthemtodevotetheirbesteffortstoourbusinessandfinancialsuccess.Theprincipalfeaturesofourequity
incentiveplansandour401(k)planaresummarizedbelow.Thesesummariesarequalifiedintheirentiretybyreferencetotheactual
textoftheplans,which,otherthanthe401(k)plan,arefiledasexhibitstotheregistrationstatementofwhichthisprospectusisapart.
2017EquityIncentivePlan
Ourboardofdirectorsadoptedour2017EquityIncentivePlan,orour2017Plan,inJanuary2017,andourstockholdersapproved
our2017PlaninFebruary2017.Our2017Planwillbecomeeffectiveoncetheregistrationstatement,ofwhichthisprospectusformsa
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grantofincentivestockoptionstoemployees,includingemployeesofanyparentorsubsidiary,andforthegrantofnonstatutorystock
options,stockappreciationrights,restrictedstockawards,restrictedstockunitawards,performancestockawards,performancecash
awards,andotherformsofstockawardstoemployees,directors,andconsultants,includingemployeesandconsultantsofouraffiliates.
The 2017 Plan will be the successor to our 2012 Equity Incentive Plan and 2014 Equity Incentive Plan, each of which is described
below,or,together,thePriorPlans.
AuthorizedShares.ThemaximumnumberofsharesofourClassAcommonstockthatmaybeissuedunderour2017Plan,based
onthePriorPlansavailablereserveandoutstandingawardsasofDecember31,2016,is355,522,498,whichnumberisthesumof(i)
87,270,108newsharesofClassAcommonstock,plus(ii)thenumberofsharesofClassAcommonstocksubjecttothePriorPlans
availablereserve,inanamountnottoexceed41,668,672shares,plus(iii)anumberofsharesofClassAcommonstockequaltothe
numberofsharesofClassBcommonstocksubjecttothePriorPlansavailablereserve,inanamountnottoexceed984,533shares,
plus(iv)thenumberofsharesofClassAcommonstockthatwouldotherwisehavereturnedtothePriorPlans,asthosesharesbecome
availablefromtimetotime,inanamountnottoexceed73,185,900shares,plus(v)anumberofsharesofClassAcommonstockequal
to the number of shares of Class B common stock that would otherwise have returned to the Prior Plans, as those shares become
available from time to time, in an amount not to exceed 49,766,414 shares, plus (vi) a maximum of 102,646,871 shares of ClassA
commonstockthatareaddedpursuanttothefollowingsentence.Withrespecttoeachsharethatreturnstothe2017Planpursuantto
clauses(iv)and(v)ofthepriorsentencethatwasassociatedwithanawardthatwasoutstandingunderthePriorPlansasofOctober31,
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
102,646,871shares.Inaddition,thenumberofsharesofourClassAcommonstockreservedforissuanceunderour2017Planwill
automaticallyincreaseonJanuary1stofeachcalendaryear,startingonJanuary1,2018throughJanuary1,2027,inanamountequalto
5.0% of the total number of shares of our capital stock outstanding on the last day of the calendar month before the date of each
automaticincrease,oralessernumberofsharesdeterminedbyourboardofdirectors.ThemaximumnumberofsharesofourClassA
commonstockthatmaybeissuedontheexerciseofincentivestockoptionsunderour2017Planis1,066,567,494.
Sharessubjecttostockawardsgrantedunderour2017Planthatexpireorterminatewithoutbeingexercisedinfull,orthatare
paidoutincashratherthaninshares,donotreducethenumberofsharesavailableforissuanceunderour2017Plan.Additionally,
sharesbecomeavailableforfuturegrantunderour2017Planiftheywereissuedunderstockawardsunderour2017Planandifwe
repurchase them or they are forfeited. This includes shares used to pay the exercise price of a stock award or to satisfy the tax
withholdingobligationsrelatedtoastockaward.
PlanAdministration.Ourboardofdirectors,oradulyauthorizedcommitteeofourboardofdirectors,willadministerour2017
Plan. Our board of directors may also delegate to one or more of our officers the authority to (1) designate employees (other than
officers)toreceivespecifiedstockawardsand(2)determinethenumberofsharessubjecttosuchstockawards.Underour2017Plan,
ourboardofdirectorshastheauthoritytodetermineandamendthetermsofawardsandunderlyingagreements,including:

recipients

theexercise,purchase,orstrikepriceofstockawards,ifany

thenumberofsharessubjecttoeachstockaward

thevestingscheduleapplicabletotheawards,togetherwithanyvestingaccelerationand

theformofconsideration,ifany,payableonexerciseorsettlementoftheaward.
Underthe2017Plan,theboardofdirectorsalsogenerallyhastheauthoritytoeffect,withtheconsentofanyadverselyaffected
participant:

thereductionoftheexercise,purchase,orstrikepriceofanyoutstandingaward

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the cancellation of any outstanding award and the grant in substitution therefore of other awards, cash, or other

considerationor

anyotheractionthatistreatedasarepricingundergenerallyacceptedaccountingprinciples.
Section162(m)Limits.AtsuchtimeasnecessaryforcompliancewithSection162(m)oftheCode,noparticipantmaybegranted
stock awards covering more than 20,000,000 shares of our Class A common stock under the 2017 Plan during any calendar year
pursuanttostockoptions,stockappreciationrights,andotherstockawardswhosevalueisdeterminedbyreferencetoanincreaseover
an exercise price or strike price of at least 100% of the fair market value of our Class A common stock on the date of grant.
Additionally,underour2017Plan,inacalendaryear,noparticipantmaybegrantedaperformancestockawardcoveringmorethan
20,000,000 shares of our ClassA common stock or a performance cash award having a maximum value in excess of $20,000,000.
These limitations are designed to allow us to grant compensation that will not be subject to the $1,000,000 annual limitation on the
incometaxdeductibilityofcompensationpaidtoacoveredexecutiveofficerimposedbySection162(m)oftheCode.
StockOptions.Incentivestockoptionsandnonstatutorystockoptionsaregrantedunderstockoptionagreementsadoptedbythe
planadministrator.Theplanadministratordeterminestheexercisepriceforstockoptions,withinthetermsandconditionsofthe2017
Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our ClassA
commonstockonthedateofgrant.Optionsgrantedunderthe2017Planvestattheratespecifiedinthestockoptionagreementas
determinedbytheplanadministrator.
RestrictedStockUnitAwards.RSUsaregrantedunderrestrictedstockunitawardagreementsadoptedbytheplanadministrator.
RSUs may be granted in consideration for any form of legal consideration that may be acceptable to our board of directors and
permissible under applicable law. An RSU may be settled by cash, delivery of stock, a combination of cash and stock as deemed
appropriate by the plan administrator, or in any other form of consideration set forth in the RSU agreement. Additionally, dividend
equivalentsmaybecreditedinrespectofsharescoveredbyanRSU.Exceptasotherwiseprovidedintheapplicableawardagreement,
RSUsthathavenotvestedwillbeforfeitedoncetheparticipantscontinuousserviceendsforanyreason.
Restricted Stock Awards. Restricted stock awards are granted under restricted stock award agreements adopted by the plan
administrator.Arestrictedstockawardmaybeawardedinconsiderationforcash,check,bankdraftormoneyorder,pastservicestous,
oranyotherformoflegalconsiderationthatmaybeacceptabletoourboardofdirectorsandpermissibleunderapplicablelaw.Theplan
administratordeterminesthetermsandconditionsofrestrictedstockawards,includingvestingandforfeitureterms.Ifaparticipants
service relationship with us ends for any reason, we may receive any or all of the shares of Class A common stock held by the
participantthathavenotvestedasofthedatetheparticipantterminatesservicewithusthroughaforfeitureconditionorarepurchase
right.
StockAppreciationRights.Stockappreciationrightsaregrantedunderstockappreciationgrantagreementsadoptedbytheplan
administrator. The plan administrator determines the purchase price or strike price for a stock appreciation right, which generally
cannotbelessthan100%ofthefairmarketvalueofourClassAcommonstockonthedateofgrant.Astockappreciationrightgranted
underthe2017Planvestsattheratespecifiedinthestockappreciationrightagreementasdeterminedbytheplanadministrator.
Performance Awards. The 2017 Plan permits the grant of performancebased stock and cash awards that may qualify as
performancebased compensation that is not subject to the $1,000,000 limitation on the income tax deductibility imposed by
Section162(m)oftheCode.Ourcompensationcommitteemaystructureawardssothatthestockorcashwillbeissuedorpaidonly
followingtheachievementofcertainpreestablishedperformancegoalsduringadesignatedperformanceperiod.
Theperformancegoalsthatmaybeselectedincludeoneormoreofthefollowing:(i)earnings(includingearningspershareand
netearnings)(ii)earningsbeforeinterest,taxes,anddepreciation(iii)earningsbefore

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interest, taxes, depreciation and amortization (iv) earnings before interest, taxes, depreciation, amortization, and legal settlements
(v) earnings before interest, taxes, depreciation, amortization, legal settlements, and other income (expense) (vi) earnings before
interest, taxes, depreciation, amortization, legal settlements, other income (expense), and stockbased compensation (vii) earnings
beforeinterest,taxes,depreciation,amortization,legalsettlements,otherincome(expense),stockbasedcompensation,andchangesin
deferredrevenue(viii)totalstockholderreturn(ix)returnonequityoraveragestockholdersequity(x)returnonassets,investment,
or capital employed (xi) stock price (xii) margin (including gross margin) (xiii) income (before or after taxes) (xiv) operating
income (xv) operating income after taxes (xvi) pretax profit (xvii) operating cash flow (xviii) sales or revenue targets
(xix)increasesinrevenueorproductrevenue(xx)expensesandcostreductiongoals(xxi)improvementinorattainmentofworking
capitallevels(xxii)economicvalueadded(oranequivalentmetric)(xxiii)marketshare(xxiv)cashflow(xxv)cashflowpershare
(xxvi) share price performance (xxvii) debt reduction (xxviii) implementation or completion of projects or processes
(xxix) stockholders equity (xxx) capital expenditures (xxxi) debt levels (xxxii) operating profit or net operating profit
(xxxiii)workforcediversity(xxxiv)growthofnetincomeoroperatingincome(xxxv)billings(xxxvi)bookings(xxxvii)employee
retention (xxxviii) user satisfaction (xxxix) the number of users, including unique users (xl) budget management (xli) partner
satisfaction (xlii) entry into or completion of strategic partnerships or transactions (including inlicensing and outlicensing of
intellectualproperty)and(xliii)totheextentthatanawardisnotintendedtocomplywithSection162(m)oftheCode,othermeasures
ofperformanceselectedbytheboardofdirectors.
The performance goals may be based on companywide performance or performance of one or more business units, divisions,
affiliates,orbusinesssegments,andmaybeeitherabsoluteorrelativetotheperformanceofoneormorecomparablecompaniesorthe
performance of one or more relevant indices. Unless specified otherwise by the board or committee (as applicable) (i) in the award
agreementatthetimetheawardisgranted,or(ii)inanotherdocumentsettingforththeperformancegoalsatthetimetheperformance
goals are established, the board or committee (as applicable) will appropriately make adjustments in the method of calculating the
attainmentofperformancegoalsforaperformanceperiodasfollows:(1)toexcluderestructuringorothernonrecurringcharges(2)to
exclude exchange rate effects (3) to exclude the effects of changes to generally accepted accounting principles (4) to exclude the
effects of items that are unusual in nature or occur infrequently as determined under generally accepted accounting principles
(5)toexcludethedilutiveeffectsofacquisitionsorjointventures(6)toassumethatanybusinessdivestedbyusachievedperformance
objectives at targeted levels during the balance of a performance period following the divestiture (7) to exclude the effect of any
change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization,
recapitalization, merger, consolidation, spinoff, combination or exchange of shares or other similar corporate change, or any
distributionstocommonstockholdersotherthanregularcashdividends(8)toexcludetheeffectsofstockbasedcompensationandthe
award of bonuses under the companys bonus plans (9) to exclude costs incurred in connection with potential acquisitions or
divestitures that are required to be expensed under generally accepted accounting principles and (10) to exclude the goodwill and
intangibleassetimpairmentchargesthatarerequiredtoberecordedundergenerallyacceptedaccountingprinciples.Inaddition,the
boardorcommittee(asapplicable)retainsthediscretiontoreduceoreliminatethecompensationoreconomicbenefitdueonattainment
ofperformancegoalsandtodefinethemannerofcalculatingtheperformancecriteriaitselectstouseforsuchperformanceperiod.
Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as
specifiedintheawardagreementorthewrittentermsofaperformancecashaward.
Other Stock Awards. The plan administrator may grant other awards based in whole or in part by reference to our Class A
commonstock.Theplanadministratorwillsetthenumberofsharesunderthestockawardandallothertermsandconditionsofsuch
awards.
ChangestoCapitalStructure.Intheeventthereisaspecifiedtypeofchangeinourcapitalstructure,suchasastocksplit,reverse
stock split, or recapitalization, appropriate adjustments will be made to (1) the class and maximum number of shares reserved for
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shares by which the share reserve may increase automatically each year, (3) the class and maximum number of shares that may be
issued on the exercise of incentive stock options, (4) the class and maximum number of shares subject to stock awards that can be
granted in a calendar year (as established under the 2017 Plan under Section 162(m) of the Code), and (5) the class and number of
sharesandexerciseprice,strikeprice,orpurchaseprice,ifapplicable,ofalloutstandingstockawards.
CorporateTransactions.Our2017Planprovidesthatintheeventofcertainspecifiedsignificantcorporatetransactions,including:
(1) a sale of all or substantially all of our assets, (2) the sale or disposition of more than 50% of our outstanding securities, (3) the
consummation of a merger or consolidation where we do not survive the transaction, and (4) the consummation of a merger or
consolidation where we do survive the transaction but the shares of our common stock outstanding before such transaction are
converted or exchanged into other property by virtue of the transaction, unless otherwise provided in an award agreement or other
writtenagreementbetweenusandtheawardholder,theadministratormaytakeoneormoreofthefollowingactionswithrespectto
suchstockawards:

arrangefortheassumption,continuation,orsubstitutionofastockawardbyasuccessorcorporation

arrangefortheassignmentofanyreacquisitionorrepurchaserightsheldbyustoasuccessorcorporation

acceleratethevesting,inwholeorinpart,ofthestockawardandprovideforitsterminationbeforethetransaction

arrangeforthelapse,inwholeorinpart,ofanyreacquisitionorrepurchaserightsheldbyus

cancel or arrange for the cancellation of the stock award before the transaction in exchange for a cash payment, or no

payment,asdeterminedbytheboardor

makeapayment,intheformdeterminedbyourboardofdirectors,equaltotheexcess,ifany,ofthevalueofthepropertythe
participant would have received on exercise of the awards before the transaction over any exercise price payable by the
participantinconnectionwiththeexercise.
Theplanadministratorisnotobligatedtotreatallstockawardsorportionsofstockawards,eventhosethatareofthesametype,
inthesamemannerandisnotobligatedtotreatallparticipantsinthesamemanner.
Intheeventofachangeincontrol,awardsgrantedunderthe2017Planwillnotreceiveautomaticaccelerationofvestingand
exercisability,althoughthistreatmentmaybeprovidedforinanawardagreement.Underthe2017Plan,achangeincontrolisdefined
toinclude(1)theacquisitionbyanypersonorcompanyofmorethan50%ofthecombinedvotingpowerofourthenoutstandingstock,
(2)amerger,consolidation,orsimilartransactioninwhichourstockholdersimmediatelybeforethetransactiondonotown,directlyor
indirectly,morethan50%ofthecombinedvotingpowerofthesurvivingentity(ortheparentofthesurvivingentity),(3)asale,lease,
exclusivelicense,orotherdispositionofallorsubstantiallyallofourassetsotherthantoanentitymorethan50%ofthecombined
votingpowerofwhichisownedbyourstockholders,and(4)anunapprovedchangeinthemajorityoftheboardofdirectors.
Transferability. A participant may not transfer stock awards under our 2017 Plan other than by will, the laws of descent and
distribution,orasotherwiseprovidedunderour2017Plan.
Plan Amendment or Termination. Our board of directors has the authority to amend, suspend, or terminate our 2017 Plan,
providedthatsuchactiondoesnotmateriallyimpairtheexistingrightsofanyparticipantwithoutsuchparticipantswrittenconsent.
Certainmaterialamendmentsalsorequiretheapprovalofourstockholders.Noincentivestockoptionsmaybegrantedafterthetenth
anniversaryofthedateourboardofdirectorsadoptedour2017Plan.Nostockawardsmaybegrantedunderour2017Planwhileitis
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Ourboardofdirectorsadopted,andourstockholdersapproved,our2014EquityIncentivePlan,orour2014Plan,inSeptember
2014.Our2014PlanwasamendedmostrecentlyinOctober2016.Our2014Planallowsforthegrantofincentivestockoptionsto
employees,includingemployeesofanyparentorsubsidiary,andforthegrantofnonstatutorystockoptions,stockappreciationrights,
restrictedstockawards,andrestrictedstockunitstoemployees,directors,andconsultants,includingemployeesandconsultantsofour
affiliates.
Our2017Planwillbecomeeffectiveontheexecutionoftheunderwritingagreementrelatedtothisoffering.Asaresult,wedo
notexpecttograntanyadditionalawardsunderthe2014Planfollowingthatdate,otherthanawardsforupto2,500,000sharesofClass
AcommonstocktoouremployeesandconsultantsinFrance.Anyawardsgrantedunderthe2014Planwillremainsubjecttotheterms
ofour2014Planandapplicableawardagreements.
AuthorizedShares. The maximum number of shares of our ClassA common stock that may be issued under our 2014 Plan is
166,164,100, minus the number of shares of our Class B common stock issued after September 4, 2014 under our 2012 Plan. In
additiontothesharereserve,anadditional53,357,397sharesofClassAcommonstockarereservedunderthe2014Planinconnection
withtheClassADividend,oneshareofwhichwillbeissuedifandwhenasharefromthesharereserveisissuedinconnectionwiththe
settlement or exercise of a stock award that was outstanding as of October 31, 2016. The maximum number of shares of ClassA
commonstockthatmaybeissuedontheexerciseofincentivestockoptionsunderour2014Planisthreetimessuchmaximumnumber
ofshares.Sharessubjecttostockawardsgrantedunderour2014Planthatexpire,areforfeited,orterminatewithoutbeingexercisedin
fulloraresettledincashdonotreducethenumberofsharesavailableforissuanceunderour2014Plan.Additionally,sharesusedto
paytheexercisepriceofastockawardortosatisfythetaxwithholdingobligationsrelatedtoastockawardbecomeavailableforfuture
grantunderour2014Plan,althoughsuchsharesmaynotbesubsequentlyissuedpursuanttotheexerciseofanincentivestockoption.
PlanAdministration.Ourboardofdirectorsoradulyauthorizedcommitteeofourboardofdirectorsadministersour2014Plan
and the stock awards granted under it. Our board of directors may also delegate to one or more of our officers the authority to
(1)designateemployeestoreceivespecifiedstockawards,and(2)determinethenumberofsharessubjecttosuchstockawards.Under
our 2014 Plan, the board of directors has the authority to determine and amend the terms of awards and underlying agreements,
including:

recipients




participant:

thereductionoftheexercisepriceofanyoutstandingoptionorstockappreciationright

thecancellationofanyoutstandingoptionorstockappreciationrightandthegrantinsubstitutionthereforeofotherawards,

cash,orotherconsiderationor

CorporateTransactions.Our2014Planprovidesthatintheeventofcertainspecifiedsignificantcorporatetransactions,generally
including:(1)asaleofallorsubstantiallyallofourassets,(2)thesaleordispositionofat

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least90%ofouroutstandingsecurities,(3)theconsummationofamergerorconsolidationwherewedonotsurvivethetransaction,
and (4) the consummation of a merger or consolidation where we do survive the transaction but the shares of common stock
outstanding before such transaction are converted or exchanged into other property by virtue of the transaction, unless otherwise
providedinanawardagreementorotherwrittenagreementbetweenusandtheawardholder,theadministratormaytakeoneormore
ofthefollowingactionswithrespecttosuchstockawards:(1)arrangefortheassumption,continuationorsubstitutionofastockaward
by a successor corporation, (2) arrange for the assignment of any reacquisition or repurchase rights held by us to a successor
corporation,(3)acceleratethevesting,inwholeorinpart,ofthestockawardandprovideforitsterminationbeforethetransaction,
(4) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by us, (5) cancel or arrange for the
cancellationofthestockawardbeforethetransactioninexchangeforacashpayment,ifany,determinedbytheboardofdirectors,or
(6) make a payment, in the form determined by the board of directors, equal to the excess, if any, of the value of the property the
participantwouldhavereceivedonexerciseofthestockawardbeforethetransactionoveranyexercisepricepayablebytheparticipant
inconnectionwiththeexercise.Theplanadministratorisnotobligatedtotreatallstockawards,eventhosethatareofthesametype,or
allparticipants,inthesamemanner.
exercisability,althoughtheboardofdirectorsmayprovideforthistreatmentinanawardagreement.Underthe2014Plan,achangein
controlisdefinedtoinclude(1)theacquisitionbyanypersonofmorethan50%ofthecombinedvotingpowerofourthenoutstanding
stock, (2) a merger, consolidation, or similar transaction in which our stockholders immediately before the transaction do not own,
directly or indirectly, more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity),
(3)ourstockholdersapproveorourboardofdirectorsapprovesaplanofcompletedissolutionorliquidationoracompletedissolution
or liquidation otherwise occurs except for a liquidation into a parent corporation, and (4) a sale, lease, exclusive license, or other
dispositionofallorsubstantiallyalloftheassetstoanentitythatdidnotpreviouslyholdmorethan50%ofthevotingpowerofour
stock.
Transferability.Underour2014Plan,theboardofdirectorsmayprovideforlimitationsonthetransferabilityofawards,initssole
discretion.Optionawardsaregenerallynottransferableotherthanbywillorthelawsofdescentanddistribution,exceptasotherwise
providedunderour2014Plan.
althoughcertainmaterialamendmentsrequiretheapprovalofourstockholders,andamendmentsthatwouldimpairtherightsofany
participantrequiretheconsentofthatparticipant.
Ourboardofdirectorsadoptedour2012EquityIncentivePlan,orour2012Plan,inMay2012,andourstockholdersapprovedour
2012PlaninAugust2012.Our2012PlanwasamendedmostrecentlyinOctober2016.Our2012Planallowsforthegrantofincentive
stock options to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options, stock
appreciationrights,restrictedstockawards,andrestrictedstockunitstoouremployees,directors,andconsultants,includingemployees
andconsultantsofouraffiliates.
Our2017Planwillbecomeeffectiveontheexecutionoftheunderwritingagreementrelatedtothisoffering.Asaresult,wedo
notexpecttograntanyadditionalawardsunderthe2012Planfollowingthatdate.Anyawardsgrantedunderthe2012Planwillremain
subjecttothetermsofour2012Planandapplicableawardagreements.
AuthorizedShares. The maximum number of shares of our Class B common stock that may be issued under our 2012 Plan is
91,292,140,minusthenumberofsharesofourClassAcommonstockissuedafterSeptember4,2014underour2014Plan.Inaddition
tothesharereserve,anadditional50,022,362sharesofClassAcommonstockarereservedunderthe2012Planinconnectionwiththe
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issued if and when a share from the share reserve is issued in connection with the settlement or exercise of a stock award that was
outstandingasofOctober31,2016.ThemaximumnumberofsharesofClassBcommonstockthatmaybeissuedontheexerciseof
incentivestockoptionsunderour2012Planissuchmaximumnumberofshares.Sharessubjecttostockawardsgrantedunderour2012
Planthatexpire,areforfeited,orterminatewithoutbeingexercisedinfulloraresettledincashdonotreducethenumberofshares
availableforissuanceunderour2012Plan.Additionally,sharesusedtopaytheexercisepriceofastockawardortosatisfythetax
withholdingobligationsrelatedtoastockawardbecomeavailableforfuturegrantunderour2012Plan,althoughsuchsharesmaynot
besubsequentlyissuedpursuanttotheexerciseofanincentivestockoption.
PlanAdministration.Ourboardofdirectorsoradulyauthorizedcommitteeofourboardofdirectorsadministersour2012Plan
and the stock awards granted under it. Our board of directors may also delegate to one or more of our officers the authority to
(1)designateemployeestoreceivespecifiedstockawards,and(2)determinethenumberofsharessubjecttosuchstockawards.Under
our 2012 Plan, the board of directors has the authority to determine and amend the terms of awards and underlying agreements,
including:

recipients




participant:

thereductionoftheexercisepriceofanyoutstandingoptionorstockappreciationright

thecancellationofanyoutstandingoptionorstockappreciationrightandthegrantinsubstitutionthereforeofotherawards,

cash,orotherconsiderationor

CorporateTransactions.Our2012Planprovidesthatintheeventofcertainspecifiedsignificantcorporatetransactions,generally
including: (1) a sale of all or substantially all of our assets, (2) the sale or disposition of at least 90% of our outstanding securities,
(3)theconsummationofamergerorconsolidationwherewedonotsurvivethetransaction,and(4)theconsummationofamergeror
consolidationwherewedosurvivethetransactionbutthesharesofcommonstockoutstandingbeforesuchtransactionareconvertedor
exchangedintootherpropertybyvirtueofthetransaction,unlessotherwiseprovidedinanawardagreementorotherwrittenagreement
betweenusandtheawardholder,theadministratormaytakeoneormoreofthefollowingactionswithrespecttosuchstockawards:
(1)arrangefortheassumption,continuation,orsubstitutionofastockawardbyasuccessorcorporation,(2)arrangefortheassignment
ofanyreacquisitionorrepurchaserightsheldbyustoasuccessorcorporation,(3)acceleratethevesting,inwholeorinpart,ofthe
stockawardandprovideforitsterminationbeforethetransaction,(4)arrangeforthelapse,inwholeorinpart,ofanyreacquisitionor
repurchaserightsheldbyus,(5)cancelorarrangeforthecancellationofthestockawardbeforethetransactioninexchangeforacash
payment,ifany,determinedbytheboardofdirectors,or(6)makeapayment,intheformdeterminedbytheboardofdirectors,equalto
theexcess,ifany,ofthevalueofthepropertytheparticipantwouldhavereceivedonexerciseofthestockawardbeforethetransaction
overanyexercisepricepayablebytheparticipantinconnectionwiththeexercise.Theplanadministratorisnotobligatedtotreatall
stockawards,eventhosethatareofthesametype,orallparticipants,inthesamemanner.
exercisability,althoughtheboardofdirectorsmayprovideforthistreatmentinanawardagreement.Underthe2012Plan,achangein
controlisdefinedtoinclude(1)theacquisitionbyanyperson

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ofmorethan50%ofthecombinedvotingpowerofourthenoutstandingstock,(2)amerger,consolidation,orsimilartransactionin
whichourstockholdersimmediatelybeforethetransactiondonotown,directlyorindirectly,morethan50%ofthecombinedvoting
powerofthesurvivingentity(ortheparentofthesurvivingentity),(3)ourstockholdersapproveorourboardofdirectorsapprovesa
plan of complete dissolution or liquidation or a complete dissolution or liquidation otherwise occurs except for a liquidation into a
parentcorporation,and(4)asale,lease,exclusivelicense,orotherdispositionofallorsubstantiallyalloftheassetstoanentitythatdid
notpreviouslyholdmorethan50%ofthevotingpowerofourstock.
Transferability.Underour2012Plan,theboardofdirectorsmayprovideforlimitationsonthetransferabilityofawards,initssole
discretion.Optionawardsaregenerallynottransferableotherthanbywillorthelawsofdescentanddistribution,exceptasotherwise
providedunderour2012Plan.
althoughcertainmaterialamendmentsrequiretheapprovalofourstockholders,andamendmentsthatwouldimpairtherightsofany
participantrequiretheconsentofthatparticipant.
2017EmployeeStockPurchasePlan
Ourboardofdirectorsadoptedour2017EmployeeStockPurchasePlan,orESPP,inJanuary2017andourstockholdersapproved
ourESPPinFebruary2017.OurESPPwillbecomeeffectiveoncetheregistrationstatement,ofwhichthisprospectusformsapart,is
declaredeffective.TheESPPwillbecomeeffectiveimmediatelyontheexecutionanddeliveryoftheunderwritingagreementrelatedto
thisoffering.ThepurposeoftheESPPistosecuretheservicesofnewemployees,toretaintheservicesofexistingemployees,andto
provideincentivesforsuchindividualstoexertmaximumeffortstowardoursuccessandthatofouraffiliates.TheESPPisintendedto
qualifyasanemployeestockpurchaseplanwithinthemeaningofSection423oftheCodeforU.S.employees.
ShareReserve. Following this offering, the ESPP authorizes the issuance of 16,484,690 shares of our ClassA common stock
under purchase rights granted to our employees or to employees of any of our designated affiliates. The number of shares of our
ClassAcommonstockreservedforissuancewillautomaticallyincreaseonJanuary1stofeachcalendaryear,beginningonJanuary1,
2018 (assuming the ESPP becomes effective in fiscal year ending December 31, 2017) through January 1, 2027, by the lesser of
(1)1.0%ofthetotalnumberofsharesofourcommonstockoutstandingonthelastdayofthecalendarmonthbeforethedateofthe
automaticincrease,and(2)15,000,000sharesprovidedthatbeforethedateofanysuchincrease,ourboardofdirectorsmaydetermine
thatsuchincreasewillbelessthantheamountsetforthinclauses(1)and(2).Asofthedatehereof,nosharesofourClassAcommon
stockhavebeenpurchasedundertheESPP.
Administration.OurboardofdirectorshasdelegateditsauthoritytoadministertheESPPtoourcompensationcommittee.The
ESPPisimplementedthroughaseriesofofferingsunderwhicheligibleemployeesaregrantedpurchaserightstopurchasesharesof
ourcommonstockonspecifieddatesduringsuchofferings.UndertheESPP,wemayspecifyofferingswithdurationsofnotmorethan
27 months, and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on
whichsharesofourClassAcommonstockwillbepurchasedforemployeesparticipatingintheoffering.Wecurrentlyintendtohave
24monthofferingswithmultiplepurchaseperiods(ofapproximatelysixmonthsinduration)peroffering,exceptthatthefirstpurchase
periodunderourfirstofferingmaybeshorterorlongerthansixmonths,dependingonthedateonwhichtheunderwritingagreement
relatingtothisofferingbecomeseffective.AnofferingundertheESPPmaybeterminatedundercertaincircumstances.
PayrollDeductions.Generally,allregularemployees,includingexecutiveofficers,employedbyusorbyanyofourdesignated
affiliates,mayparticipateintheESPPandmaycontribute,normallythroughpayrolldeductions,upto30%oftheirearnings(asdefined
intheESPP)forthepurchaseofourClassAcommonstockundertheESPP.Unlessotherwisedeterminedbyourboardofdirectors,
ClassAcommonstockwillbepurchasedfortheaccountsofemployeesparticipatingintheESPPatapricepersharethatisatleastthe
lesserof(1)85%ofthefairmarketvalueofashareofourClassAcommonstockonthefirstdateofanoffering,or

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(2)85%ofthefairmarketvalueofashareofourClassAcommonstockonthedateofpurchase.Fortheinitialoffering,whichwe
expectwillcommenceontheexecutionanddeliveryoftheunderwritingagreementrelatingtothisoffering,thefairmarketvalueonthe
firstdayoftheofferingperiodwillbethepriceatwhichsharesofClassAcommonstockarefirstsoldtothepublic.
Limitations.EmployeesmayhavetosatisfyoneormoreofthefollowingservicerequirementsbeforeparticipatingintheESPP,as
determined by our board of directors, including: (1) being customarily employed for more than 20 hours per week, (2) being
customarilyemployedformorethanfivemonthspercalendaryear,or(3)continuousemploymentwithusoroneofouraffiliatesfora
periodoftime(nottoexceedtwoyears).NoemployeemaypurchasesharesundertheESPPatarateinexcessof$25,000worthofour
ClassAcommonstockbasedonthefairmarketvaluepershareofourClassAcommonstockatthebeginningofanofferingforeach
year such a purchase right is outstanding and the maximum number of shares an employee may purchase during a single purchase
periodis3,000.Finally,noemployeewillbeeligibleforthegrantofanypurchaserightsundertheESPPifimmediatelyaftersuch
rightsaregranted,suchemployeehasvotingpowerover5%ormoreofouroutstandingcapitalstockmeasuredbyvoteorvalueunder
Section424(d)oftheCode.
ChangestoCapitalStructure.Intheeventthatthereoccursachangeinourcapitalstructurethroughsuchactionsasastocksplit,
merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large
nonrecurringcashdividend,liquidatingdividend,combinationofshares,exchangeofshares,changeincorporatestructure,orsimilar
transaction, the board of directors will make appropriate adjustments to: (1) the number of shares reserved under the ESPP, (2) the
maximumnumberofsharesbywhichthesharereservemayincreaseautomaticallyeachyear,(3)thenumberofsharesandpurchase
priceofalloutstandingpurchaserights,and(4)thenumberofsharesthataresubjecttopurchaselimitsunderongoingofferings.
CorporateTransactions.Intheeventofcertainsignificantcorporatetransactions,including:(1)asaleofallorsubstantiallyallof
ourassets,(2)thesaleordispositionof90%ofouroutstandingsecurities,(3)theconsummationofamergerorconsolidationwherewe
do not survive the transaction, and (4) the consummation of a merger or consolidation where we do survive the transaction but the
sharesofourcommonstockoutstandingimmediatelybeforesuchtransactionareconvertedorexchangedintootherpropertybyvirtue
ofthetransaction,anythenoutstandingrightstopurchaseourstockundertheESPPmaybeassumed,continued,orsubstitutedforby
any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to
assume, continue, or substitute for such purchase rights, then the participants accumulated payroll contributions will be used to
purchase shares of our common stock within ten business days before such corporate transaction, and such purchase rights will
terminateimmediately.
ESPPAmendmentorTermination.OurboardofdirectorshastheauthoritytoamendorterminateourESPP,providedthatexcept
in certain circumstances such amendment or termination may not materially impair any outstanding purchase rights without the
holders consent. We will obtain stockholder approval of any amendment to our ESPP as required by applicable law or listing
requirements.
401(k)Plan
Wemaintainasafeharbor401(k)planthatprovideseligibleU.S.employeeswithanopportunitytosaveforretirementonatax
advantagedbasis.EligibleemployeesareabletodefereligiblecompensationuptocertainCodelimits,whichareupdatedannually.We
havetheabilitytomakematchinganddiscretionarycontributionstothe401(k)plan.Currently,wemakeamatchofeachparticipants
contributionuptoamaximumof3%oftheparticipantsbasesalary,bonus,andcommissionspaidduringtheperiod,andwemake
match of 50% of each participants contribution between 3% and 5% of the participants base salary, bonus, and commissions paid
during the period. Contributions are allocated to each participants individual account and are then invested in selected investment
alternativesaccordingtotheparticipantsdirections.Employeesareimmediatelyandfullyvestedintheirowncontributionsandour
contributions.The401(k)planisintendedtobequalifiedunder

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Section 401(a) of the Code, with the related trust intended to be tax exempt under Section 501(a) of the Code. As a taxqualified
retirementplan,contributionstothe401(k)planaredeductiblebyuswhenmade,andcontributionsandearningsonthoseamountsare
nottaxabletotheemployeesuntilwithdrawnordistributedfromthe401(k)plan.
LimitationsonLiabilityandIndemnificationMatters
Ontheclosingofthisoffering,ouramendedandrestatedcertificateofincorporationwillcontainprovisionsthatlimittheliability
ofourcurrentandformerdirectorsformonetarydamagestothefullestextentpermittedbyDelawarelaw.Delawarelawprovidesthat
directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except
liabilityfor:

anybreachofthedirectorsdutyofloyaltytothecorporationoritsstockholders

anyactoromissionnotingoodfaithorthatinvolvesintentionalmisconductoraknowingviolationoflaw

unlawfulpaymentsofdividendsorunlawfulstockrepurchasesorredemptionsor

anytransactionfromwhichthedirectorderivedanimproperpersonalbenefit.
Suchlimitationofliabilitydoesnotapplytoliabilitiesarisingunderfederalsecuritieslawsanddoesnotaffecttheavailabilityof
equitableremediessuchasinjunctiverelieforrescission.
Ouramendedandrestatedcertificateofincorporationwillauthorizeustoindemnifyourdirectors,officers,employees,andother
agentstothefullestextentpermittedbyDelawarelaw.Ouramendedandrestatedbylawswillprovidethatwearerequiredtoindemnify
our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our
amended and restated bylaws will also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a
directororofficerinadvanceofthefinaldispositionofanyactionorproceeding,andpermitustosecureinsuranceonbehalfofany
officer,director,employee,orotheragentforanyliabilityarisingoutofhisorheractionsinthatcapacityregardlessofwhetherwe
wouldotherwisebepermittedtoindemnifyhimorherundertheprovisionsofDelawarelaw.Wehaveenteredandexpecttocontinueto
enterintoagreementstoindemnifyourdirectors,executiveofficers,andotheremployeesasdeterminedbytheboardofdirectors.With
certainexceptions,theseagreementsprovideforindemnificationforrelatedexpensesincludingattorneysfees,judgments,fines,and
settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these amended and restated
certificate of incorporation and amended and restated bylaw provisions and indemnification agreements are necessary to attract and
retainqualifiedpersonsasdirectorsandofficers.Wealsomaintaincustomarydirectorsandofficersliabilityinsurance.
Thelimitationofliabilityandindemnificationprovisionsinouramendedandrestatedcertificateofincorporationandamended
andrestatedbylawsmaydiscouragestockholdersfrombringingalawsuitagainstourdirectorsforbreachoftheirfiduciaryduty.They
may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might
benefitusandotherstockholders.Further,astockholdersinvestmentmaybeadverselyaffectedtotheextentthatwepaythecostsof
settlementanddamageawardsagainstdirectorsandofficersasrequiredbytheseindemnificationprovisions.
Mr.SpiegelandMr.MurphyaredefendantsinTurnerv.Spiegel,etal.,No.BC558442and,totheextenttheyarefoundtohave
anyliability,theymaybeentitledtoindemnificationinaccordancewiththeirindemnificationagreementwithus.Atpresent,thereisno
otherpendinglitigationorproceedinginvolvinganyofourdirectors,officers,oremployeesforwhichindemnificationissoughtandwe
arenotawareofanythreatenedlitigationthatmayresultinclaimsforindemnification.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted for directors, executive officers, or
persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as
expressedintheSecuritiesActandisthereforeunenforceable.

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Rule10b51SalesPlans
Ourdirectorsandofficersmayadoptwrittenplans,knownasRule10b51plans,inwhichtheywillcontractwithabrokertobuy
orsellsharesofourClassAcommonstock,ClassBcommonstock,orClassCcommonstockonaperiodicbasis.UnderaRule10b51
plan, a broker executes trades under parameters established by the director or officer when entering into the plan, without further
directionfromthem.ThedirectororofficermayamendaRule10b51planinsomecircumstancesandmayterminateaplanatany
time. Our directors and executive officers may also buy or sell additional shares outside of a Rule 10b51 plan when they do not
possessofmaterialnonpublicinformation,subjecttocompliancewiththetermsofourinsidertradingpolicy.Thesaleofanyshares
under such plan would be subject to the lockup agreement that the director or officer has entered into with the underwriters. See
Underwriting.

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RELATEDPERSONTRANSACTIONS
Otherthancompensationarrangementsforourdirectorsandexecutiveofficers,whicharedescribedelsewhereinthisprospectus,
belowwedescribetransactionssinceJanuary1,2014towhichwewereapartyorwillbeaparty,inwhich:

theamountsinvolvedexceededorwillexceed$120,000and

anyofourdirectors,executiveofficers,orholdersofmorethan5%ofourcapitalstock,oranymemberoftheimmediate

familyof,orpersonsharingthehouseholdwith,theforegoingpersons,hadorwillhaveadirectorindirectmaterialinterest.
InvestorRightsAgreement
InNovember2013,weenteredintoanamendedandrestatedinvestorrightsagreement,orIRA,whichwasamendedinOctober
2016,withourfoundersandcertainholdersofourpreferredstock,includingLyntonAssetLPandentitiesaffiliatedwithBenchmark
Capital Partners and Lightspeed Venture Partners, with certain registration rights, including the right to demand that we file a
registrationstatementorrequestthattheirsharesbecoveredbyaregistrationstatementthatweareotherwisefiling.MichaelLynton
and Mitchell Lasky, members of our board of directors, are affiliated with Lynton Asset LP and Benchmark Capital Partners,
respectively. The investor rights agreement also provides these stockholders with information rights, which will terminate on the
closingofthisoffering,andarightoffirstrefusalwithregardtocertainissuancesofourcapitalstock,whichwillnotapplyto,andwill
terminateon,theclosingofthisoffering.Aftertheclosingofthisoffering,theholdersofsharesofourClassBcommonstock
issuableonconversionofoutstandingpreferredstockandsharesofourClassCcommonstockissuableonconversionofour
outstandingSeriesFPpreferredstockwillbeentitledtorightswithrespecttotheregistrationoftheirsharesofClassBcommonstock
orClassCcommonstock,respectively,undertheSecuritiesActunderthisagreement.Foradescriptionoftheseregistrationrights,see
DescriptionofCapitalStockRegistrationRights.
FoundersandExecutiveOfficers
InAugust2014,weenteredintoafullrecoursepromissorynotepermittingaloanofupto$5millionwitheachofMr.Spiegeland
Mr.Murphy.Mr.SpiegeldrewdownonhalfofhisnoteinOctober2014andtheremainderinFebruary2015.Mr.Murphydrewdown
the full amount of his note in June 2015. Each note was unsecured, accrued interest at the rate of the applicable federal rate in the
monthinwhichtheloanwasmade,andallowedforrepaymentatanytime.TheloanstoMr.SpiegelandMr.Murphywererepaidin
fullinSeptember2016.
In February 2016, we entered into a full recourse promissory note permitting a loan of up to $15 million with Mr. Spiegel.
Mr. Spiegel drew down the full amount of his note in February 2016. The note was unsecured, accrued interest at the rate of the
applicablefederalrateinthemonthinwhichtheloanwasmade,andallowedforrepaymentatanytime.ThisloantoMr.Spiegelwas
repaidinfullinSeptember2016.
In January 2015, we loaned Mr. Khan $1,850,244. This loan was evidenced by a full recourse promissory note which was
unsecured,accruedinterestattherateof1.75%perannum,andallowedforrepaymentatanytime.TheloantoMr.Khanwasrepaidin
fullinAugust2016.
InFebruary2015,weloanedMr.Horowitz$3,500,000.Thisloanwasevidencedbyafullrecoursepromissorynotewhichwas
unsecured, accrued interest at the rate of 1.70% per annum, and allowed for repayment at any time. The loan to Mr. Horowitz was
repaidinfullinAugust2016.

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PreferredStock,RestrictedStockUnit,andCommonStockRepurchase
TherepurchasesbelowtookplacebeforeOctober31,2016,andthereforethenumberofsharesandpersharepurchasepriceswere
notadjustedtoreflecttheeffectsoftheClassADividend.
InAugust2016,werepurchasedanaggregateof260,832sharesofClassBcommonstockfromMr.Horowitz,atapurchaseprice
of$30.72pershareforanaggregatepurchasepriceof$8.0million.
InSeptember2016,werepurchasedanaggregateof137,590sharesofClassBcommonstockand125,754sharesofSeriesFP
preferredstockfromMr.Spiegel,atapurchasepriceof$30.72pershareforanaggregatepurchasepriceof$8.1million.
InSeptember2016,werepurchasedanaggregateof137,590sharesofClassBcommonstockand125,754sharesofSeriesFP
preferredstockfromMr.Murphy,atapurchasepriceof$30.72pershareforanaggregatepurchasepriceof$8.1million.
SaleofSeriesCPreferredStock
InJanuary2014,wesold293,340sharesofSeriesCPreferredStocktoanentityaffiliatedwithMichaelLynton,amemberofour
boardofdirectors,atapurchasepriceof$3.40893pershare,foranaggregatepurchasepriceof$999,976.
Munger,Tolles&OlsonLLPServices
We have engaged the law firm Munger, Tolles & Olson LLP, or Munger, to provide certain legal services to us. Mr. Spiegels
father,JohnSpiegel,isapartneratMunger,althoughJohnSpiegelhasnotpersonallyprovidedanymateriallegalservicestous.We
havepaidMunger$305,406,$50,000,and$293,908duringtheyearsendedDecember31,2014,2015,and2016,respectively.
IndemnificationAgreements
Ouramendedandrestatedcertificateofincorporationwillcontainprovisionslimitingtheliabilityofdirectors,andouramended
andrestatedbylawswillprovidethatwewillindemnifyeachofourdirectorsandofficerstothefullestextentpermittedunderDelaware
law.Ouramendedandrestatedcertificateofincorporationandamendedandrestatedbylawswillalsoprovideourboardofdirectors
withdiscretiontoindemnifyouremployeesandotheragentswhendeterminedappropriatebytheboard.Inaddition,wehaveentered
intoanindemnificationagreementwitheachofourdirectorsandexecutiveofficers,whichrequiresustoindemnifythem.Formore
informationregardingtheseagreements,seeExecutiveCompensationLimitationsonLiabilityandIndemnificationMatters.
PoliciesandProceduresforTransactionswithRelatedPersons
InJuly2016,weenteredintoapolicythatourexecutiveofficers,directors,nomineesforelectionasadirector,beneficialowners
ofmorethan5%ofanyclassofourcommonstock,andanymembersoftheimmediatefamilyofanyoftheforegoingpersonsarenot
permittedtoenterintoarelatedpersontransactionwithuswithouttheapprovalorratificationofourboardofdirectorsorouraudit
committee. Any request for us to enter into a transaction with an executive officer, director, nominee for election as a director,
beneficialownerofmorethan5%ofanyclassofourcommonstock,oranymemberoftheimmediatefamilyofanyoftheforegoing
persons,inwhichtheamountinvolvedexceeds$50,000andsuchpersonwouldhaveadirectorindirectinterest,mustbepresentedto
ourboardofdirectorsorourauditcommitteeforreview,consideration,andapproval.Inapprovingorrejectinganysuchproposal,our
boardofdirectorsorourauditcommitteeistoconsiderthematerialfactsofthetransaction,includingwhetherthetransactionison
termsnolessfavorablethantermsgenerallyavailabletoanunaffiliatedthirdpartyunderthesameorsimilarcircumstancesandthe
extentoftherelatedpersonsinterestinthetransaction.

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PRINCIPALANDSELLINGSTOCKHOLDERS
ThefollowingtablesetsforthinformationwithrespecttothebeneficialownershipofoursharesasofDecember31,2016by:

eachnamedexecutiveofficer

eachofourdirectors

ourdirectorsandexecutiveofficersasagroup

eachpersonorentityknownbyustoownbeneficiallymorethan5%ofourClassAcommonstock,ClassBcommonstock,

andClassCcommonstock(bynumberorbyvotingpower)and

allsellingstockholders.
We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not
necessarilyindicativeofbeneficialownershipforanyotherpurpose.Exceptasindicatedbythefootnotesbelow,webelieve,basedon
informationfurnishedtous,thatthepersonsandentitiesnamedinthetablebelowhavesolevotingandsoleinvestmentpowerwith
respecttoallsharesthattheybeneficiallyown,subjecttoapplicablecommunitypropertylaws.
Applicable percentage ownership before the offering is based on 519,013,572 shares of Class A common stock,
288,794,259sharesofClassBcommonstock,and215,887,848sharesofClassCcommonstockoutstandingasofDecember31,2016,
assuming(i)theautomaticconversionofalloutstandingsharesofSeriesFPpreferredstockintoClassCcommonstockandallother
outstandingsharesofpreferredstockintosharesofClassBcommonstockand(ii)thevestingandsettlementofalloutstandingRSUs
forwhichtheservicebasedvestingwouldbesatisfiedwithin60daysofDecember31,2016,assumingtheperformanceconditionhad
beenachievedasofsuchdate,beforegivingeffecttoshareswithheldtosatisfytheassociatedwithholdingtaxobligations.Applicable
percentage ownership after the offering is based on no exercise by the underwriters of their option to purchase additional ClassA
commonstockfromcertainsellingstockholdersaswellas(i)sharesofClassAcommonstock,(ii)sharesofClassB
common stock, and (iii) shares of Class C common stock outstanding immediately after the completion of this offering,
assumingtheissuanceof14,111,225sharesofClassAcommonstockand10,512,362sharesofClassBcommonstockonthevesting
of RSUs in connection with this offering. In computing the number of shares beneficially owned by a person and the percentage
ownershipofsuchperson,wedeemedtobeoutstandingallsharessubjecttooptionsandRSUsheldbythepersonthatarecurrently
exercisable,orexercisableorwouldvestbasedonservicebasedvestingconditionswithin60daysofDecember31,2016.However,
exceptasdescribedabove,wedidnotdeemsuchsharesoutstandingforthepurposeofcomputingthepercentageownershipofany
otherperson.

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Unless otherwise indicated, the address for each beneficial owner listed in the table below is c/o Snap Inc., 63 Market Street,
Venice,CA90291.

Beneficial
BeneficialOwnership OwnershipAfter
BeforetheOffering theOffering
%of %of
ClassA ClassB ClassC Total ClassA ClassB ClassC Total
Common Common Common Voting Common Common Common Voting
Stock Stock Stock Power Stock Stock Stock Power
Before After
Nameof the #ofShares the
BeneficialOwner Shares % Shares % Shares % Offering beingsold Shares % Shares % Shares % Offering
5%Stockholdersand
SellingStockholders:
BenchmarkCapital
PartnersVII,L.P.(1) 65,799,720 12.7 65,799,720 22.8 2.7
LightspeedVenture
PartnersIX,L.P.(2) 43,314,760 8.3 43,314,760 15.0 1.8
DirectorsandNamed
ExecutiveOfficers:
EvanSpiegel(3) 113,164,485 21.8 5,862,410 2.0 107,943,924 50.0 44.3
RobertMurphy(4) 113,164,485 21.8 5,862,410 2.0 107,943,924 50.0 44.3
ImranKhan(5) 1,418,868 * 1,418,868 * *
TimothySehn(6) 3,373,332 * 3,373,332 * *
MichaelLynton(7) 1,509,820 * 1,509,820 * *
JoannaColes(8) 12,370 * *
A.G.Lafley(9) 23,736 * *
MitchellLasky(10) 65,799,720 12.7 65,799,720 22.8 2.7
StanleyMeresman(11) 61,034 * *
ScottD.Miller(12) 5,424 *
ChristopherYoung(13) 5,424 *
Alldirectorsand
executiveofficersasa
group(14persons)(14) 300,621,548 58.7 85,909,410 30.3 215,887,848 100.0 91.7

* Representsbeneficialownershipoflessthan1%.
(1) Consists of 65,799,720 shares of Class B common stock and 65,799,720 shares of ClassA common stock held by Benchmark
Capital Partners VII, L.P. Benchmark Capital Management Co. VII, L.L.C., the general partner of Benchmark Capital Partners
VII,L.P.,maybedeemedtohavesolepowertovotetheseshares,andMatthewR.Cohler,BruceW.Dunlevie,PeterH.Fenton,J.
William Gurley, Kevin R. Harvey, Mr. Lasky, and Steven M. Spurlock, the managing members of Benchmark Capital
Management Co. VII, L.L.C., may be deemed to have shared power to vote these shares. The address for Benchmark Capital
PartnersVII,L.P.is2965WoodsideRoad,Woodside,CA94062.
(2) Consists of 43,314,760 shares of Class B common stock and 43,314,760 shares of ClassA common stock held by Lightspeed
VenturePartnersIX,L.P.LightspeedUltimateGeneralPartnerIX,Ltd.isthegeneralpartnerofLightspeedGeneralPartnerIX,
L.P,whichisthegeneralpartnerofLightspeedVenturePartnersIX,L.P.Assuch,LightspeedUltimateGeneralPartnerIX,Ltd.
possesses power to direct the voting and disposition of the shares owned by Lightspeed Venture Partners IX, L.P. and may be
deemedtohaveindirectbeneficialownershipofthesharesheldbyLightspeedVenturePartnersIX,L.P.BarryEggers,Jeremy
Liew,RaviMhatre,PeterNieh,ChristopherJ.Schaepe,andJohnVrionisaretheinvestmentcommitteemembersofLightspeed
UltimateGeneralPartnerIX,Ltd.,possesspowertodirectthevotinganddispositionofthesharesownedbyLightspeedVenture
PartnersIX,L.P.,andmaybedeemedtohaveindirectbeneficialownershipofthesharesheldbyLightspeedVenturePartnersIX,
L.P.TheaddressforLightspeedis2200SandHillRoad,MenloPark,CA94025.
(3) Consistsof5,862,410sharesofClassBcommonstockand5,862,410sharesofClassAcommonstockheldintrustforwhichMr.
Spiegelistrusteeandholdsvotingpower,and107,302,075sharesofClassAcommonstockand107,943,924sharesofClassC
commonstockheldbyMr.Spiegelindividually.

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(4) Consistsof5,862,410sharesofClassBcommonstockand5,862,410sharesofClassAcommonstockheldintrustforwhichMr.
Murphy is trustee and holds voting and dispositive power, and 107,302,075 shares of ClassA common stock and 107,943,924
sharesofClassCcommonstockheldbyMr.Murphyindividually.
(5) Mr.KhanholdsRSUsfor1,418,868sharesofClassBcommonstockand1,418,868sharesofClassAcommonstock,forwhich
theservicebasedvestingconditionwouldbesatisfiedwithin60daysofDecember31,2016.
(6) Consistsof3,373,332sharesofClassAcommonstockand3,373,332sharesofClassBcommonstockissuablepursuanttostock
optionsexercisablewithin60daysafterDecember31,2016.
(7) Consistsof(a)27,550sharesofClassAcommonstockand27,550sharesofClassBcommonstockheldbyAlterGrandchildren
Trust,(b)1,060,560sharesofClassAcommonstockand1,188,930sharesofClassBcommonstockheldbyLyntonAssetLP,
(c)128,370sharesofClassAcommonstockheldbyLyntonFoundation,and(d)293,340sharesofClassAcommonstockand
293,340sharesofClassBcommonstockheldbyanentityforwhichMr.Lyntonholdsvotinganddispositivepower.Mr.Lynton
istrusteeoftheAlterGrandchildrenTrustandtrusteeofLyntonAssetLP.
(8) Ms. Coles holds RSUs for 12,370 shares of ClassA common stock, for which the servicebased vesting condition would be
satisfiedwithin60daysofDecember31,2016.
(9) Mr.LafleyholdsRSUsfor23,736ofClassAcommonstock,forwhichtheservicebasedvestingconditionwouldbesatisfied
within60daysofDecember31,2016.
(10) Consists of 65,799,720 shares of Class B common stock and 65,799,720 shares of ClassA common stock held by Benchmark
Capital Partners VII, L.P. Benchmark Capital Management Co. VII, L.L.C., the general partner of Benchmark Capital Partners
VII,L.P.,maybedeemedtohavesolepowertovotetheseshares,andMatthewR.Cohler,BruceW.Dunlevie,PeterH.Fenton,J.
William Gurley, Kevin R. Harvey, Mr. Lasky, and Steven M. Spurlock, the managing members of Benchmark Capital
ManagementCo.VII,L.L.C.,maybedeemedtohavesharedpowertovotetheseshares.
(11) Mr.MeresmanholdsRSUsfor61,034sharesofClassAcommonstock,forwhichtheservicebasedvestingconditionwouldbe
(12) Mr. Miller holds RSUs for 5,424 shares of Class A common stock, for which the servicebased vesting condition would be
(13) Mr. Young holds RSUs for 5,424 shares of Class A common stock, for which the servicebased vesting condition would be
(14) Consistsof293,638,510sharesofClassAcommonstock,79,034,360sharesofClassBcommonstock,and215,887,848shares
ofClassCcommonstockheldbyourcurrentdirectorsandexecutiveofficers,3,373,332sharesofClassAcommonstockand
3,373,332sharesofClassBcommonstockissuableunderoutstandingstockoptionsexercisablewithin60daysofDecember31,
2016,andRSUsfor3,609,706sharesofClassAcommonstockandRSUsfor3,501,718sharesofClassBcommonstockwhich
aresubjecttovestingconditionsexpectedtooccurwithin60daysofDecember31,2016.

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DESCRIPTIONOFCAPITALSTOCK
General
Thefollowingdescriptionofourcapitalstockandcertainprovisionsofouramendedandrestatedcertificateofincorporationand
amendedandrestatedbylawsaresummariesandarequalifiedbyreferencetotheamendedandrestatedcertificateofincorporationand
theamendedandrestatedbylawsthatwillbeineffectontheclosingofthisoffering.Copiesofthesedocumentshavebeenfiledwith
the SEC as exhibits to our registration statement, of which this prospectus forms a part. The descriptions of the common stock and
preferredstockreflectchangestoourcapitalstructurethatwillbeineffectontheclosingofthisoffering.
Ontheclosingofthisoffering,ouramendedandrestatedcertificateofincorporationwillprovideforthreeclassesofcommon
stock:ClassAcommonstock,ClassBcommonstock,andClassCcommonstock.Inaddition,ouramendedandrestatedcertificateof
incorporationwillauthorizesharesofundesignatedpreferredstock,therights,preferencesandprivilegesofwhichmaybedesignated
fromtimetotimebyourboardofdirectors.
Ontheclosingofthisoffering,ourauthorizedcapitalstockwillconsistof4,460,887,848shares,allwithaparvalueof$0.00001
pershare,ofwhich:

3,000,000,000sharesaredesignatedClassAcommonstock

700,000,000sharesaredesignatedClassBcommonstock

260,887,848sharesaredesignatedClassCcommonstockand

500,000,000sharesaredesignatedpreferredstock.
AsofDecember31,2016,wehadoutstanding:

512,527,443sharesofClassAcommonstock,whichassumesthenetissuanceof7,625,096sharesofClassAcommonstock
thatwillvestandbeissuedfromthesettlementofcertainoutstandingRSUssubjecttoaperformanceconditionforwhichthe
servicebasedvestingconditionwassatisfied

283,817,489sharesofClassBcommonstock,whichassumes:

the conversion of 246,813,076 outstanding shares of preferred stock into shares of Class B common stock

immediatelyontheclosingofthisofferingand

the net issuance of 5,535,592 shares of Class B common stock that will vest and be issued from the settlement of
certain outstanding RSUs subject to a performance condition for which the servicebased vesting condition was
satisfiedand

215,887,848sharesofClassCcommonstock,whichassumestheconversionof215,887,848outstandingsharesofSeriesFP

preferredstockintosharesofClassCcommonstockimmediatelyontheclosingofthisoffering.
Our outstanding capital stock was held by approximately 305 stockholders of record as of December 31, 2016. Our board of
directorsisauthorized,withoutstockholderapprovalexceptasrequiredbythelistingstandardsoftheNYSE,toissueadditionalshares
ofourcapitalstock.
Inaddition,asofDecember31,2016,andaftergivingeffecttotheClassADividend,wehadoutstanding:

21,185,669sharesofClassBcommonstockissuableontheexerciseofstockoptionsunderour2012Planand21,185,669

sharesofClassAcommonstockissuableontheexerciseofsuchoptionsundertheClassADividend

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18,068,299 shares of Class B common stock issuable on the vesting and settlement of RSUs under our 2012 Plan and
18,068,299 shares of Class A common stock issuable on the vesting and settlement of such RSUs under the Class A
Dividend

1,266,433 shares of ClassA common stock issuable on the exercise of stock options under our 2014 Plan and 1,266,433

sharesofClassAcommonstockissuableontheexerciseofsuchoptionsundertheClassADividendand

70,099,641 shares of Class A common stock issuable on the vesting and settlement of RSUs under our 2014 Plan and
49,834,987 shares of Class A common stock issuable on the vesting and settlement of such RSUs under the Class A
Dividend.
ClassACommonStock,ClassBCommonStock,andClassCCommonStock
VotingRights
The Class A common stock is nonvoting and is not entitled to any votes on any matter that is submitted to a vote of our
stockholders,exceptasrequiredbyDelawarelaw.DelawarelawwouldpermitholdersofClassAcommonstocktovote,withonevote
pershare,onamatterifwewereto:

changetheparvalueofthecommonstockor

amendourcertificateofincorporationtoalterthepowers,preferences,orspecialrightsofthecommonstockasawholeina

waythatwouldadverselyaffecttheholdersofourClassAcommonstock.
Inaddition,DelawarelawwouldpermitholdersofClassAcommonstocktovoteseparately,asasingleclass,ifanamendmentof
our certificate of incorporation would adversely affect them by altering the powers, preferences, or special rights of the Class A
commonstock,butnottheClassBcommonstockorClassCcommonstock.Asaresult,intheselimitedinstances,theholdersofa
majority of the Class A common stock could defeat any amendment to our certificate of incorporation. For example, if a proposed
amendmentofourcertificateofincorporationprovidedfortheClassAcommonstocktorankjuniortotheClassBcommonstockand
Class C common stock with respect to (i) any dividend or distribution, (ii) the distribution of proceeds were we to be acquired, or
(iii)anyotherright,DelawarelawwouldrequirethevoteoftheClassAcommonstock,witheachshareofClassAcommonstock
entitledtoonevotepershare.Inthisinstance,theholdersofamajorityofClassAcommonstockcoulddefeatthatamendmenttoour
certificate of incorporation. Moreover, if an amendment to our certificate of incorporation would alter the powers, preferences, or
specialrightsoftheClassAcommonstockandeithertheClassBcommonStockortheClassCcommonstockinawaythatwould
affectthemadverselycomparedtotheunaffectedclass,DelawarelawwouldpermittheholdersofClassAcommonstocktovotewith
theotheradverselyaffectedclassofcommonstocktogetherasasingleclass.Forexample,ifaproposedamendmenttoourcertificate
ofincorporationprovidedfortheClassAcommonstockandClassBcommonstocktorankjuniortotheClassCcommonstockwith
respectto(i)anydividendordistribution,(ii)thedistributionofproceedswerewetobeacquired,or(iii)anyotherright,Delawarelaw
wouldrequirethevoteoftheClassAcommonstockandClassBcommonstockvotingtogetherasasingleclass,witheachshareof
ClassAcommonstockandClassBcommonstockentitledtoonevotepershare.Inthisinstance,theholdersofamajorityoftheClass
A common stock and Class B common stock, voting together as a single class, could defeat that amendment to our certificate of
incorporation.
HoldersofourClassBcommonstockareentitledtoonevotepershareandholdersofClassCcommonstockareentitledtoten
votespershareonanymattersubmittedtoourshareholders.Exceptassetforthabove,holdersofsharesofClassBcommonstockand
ClassCcommonstockwillvotetogetherasasingleclassonallmatters(includingtheelectionofdirectors)submittedtoavoteof
stockholders. In addition, each class of our common stock may have the right to vote separately in certain instances as listed below
underEconomicRights.
OnthedatethatalloutstandingsharesofClassCcommonstockhaveconvertedtoClassBcommonstock,allsharesofClassB
commonstockwillconverttoClassAcommonstockandtheholdersofClassAcommonstockwillbeentitledtoonevotepershare.

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Ouramendedandrestatedcertificateofincorporationdoesnotprovideforcumulativevotingfortheelectionofdirectors.
Webelievethatthevotingstructuredescribedabove,whichprolongsourabilitytoremainafounderledcompany,willmaximize
our ability to create stockholder value. We believe that a significant portion of our success thus far has been attributable to our
founders leadership, creative vision, and management abilities. We also believe that our founders continued leadership in our
companywillprovidesubstantialfuturebenefitstousandourstockholders.
FounderProxyAgreement
Mr.SpiegelandMr.Murphy,ourcofounders,haveenteredintoaproxyagreementwitheachother,whichwillremainineffect
aftertheclosingofthisoffering.TheagreementwillapplytoallsharesofourClassBcommonstockandClassCcommonstockthat
eachmaybeneficiallyownfromtimetotimeorhavevotingcontrolover,whichwillrepresentapproximately%oftheoutstanding
votingpowerofourcapitalstockimmediatelyaftertheclosingofthisoffering.
Under the proxy agreement, Mr. Spiegel has designated Mr. Murphy as his designated proxy holder, and Mr. Murphy has
designated Mr. Spiegel as his designated proxy holder. Each cofounder has the right to select from time to time an alternate proxy
holder who would exercise the proxy if the primary proxy holder were unable or unwilling to serve as a proxy. Mr. Spiegel and
Mr. Murphy have each appointed Michael Lynton as his alternate proxy. Mr. Spiegel and Mr. Murphy may not change the primary
proxyholderwithouttheothersconsent.Aproxyholderwillhavetherighttoexerciseallofthevotingandconsentrightsofourshares
ofClassBcommonstockandClassCcommonstockbeneficiallyownedbythedeceasedordisabledcofounderoroverwhichhehas
votingcontrolonandfortheninemonthsfollowingthecofoundersdeathorduringhisdisability.Beforeanyproxyholdermayvote
oractbywrittenconsentwithrespecttothesharesofClassBcommonstockandClassCcommonstockoverwhichtheyholdaproxy,
that proxy holder will meet with the independent members of our board of directors within 90 days of the cofounders death or
disability.
Theproxyagreementwillterminateassoonasanyofthefollowingoccur:(i)ninemonthsafterthedeathofbothMr.Spiegeland
Mr.Murphy(ii)theliquidation,dissolution,orwindingupofourbusinessoperations(iii)theexecutionbyusofageneralassignment
forthebenefitofcreditorsortheappointmentofareceiverortrusteetotakepossessionofourpropertyandassetsor(iv)thedateasof
whichMr.SpiegelandMr.MurphyterminatetheproxyagreementbywrittenconsentofMr.SpiegelandMr.Murphy,withnoticeto
us.
EconomicRights
ExceptasotherwiseexpresslyprovidedinouramendedandrestatedcertificateofincorporationorrequiredbyDelawarelaw,all
sharesofClassAcommonstock,ClassBcommonstock,andClassCcommonstockwillhavethesamerightsandprivilegesandrank
equally,shareratably,andbeidenticalinallrespectsforallmatters,includingthosedescribedbelow.
DividendsandDistributions.Subjecttopreferencesthatmayapplytoanysharesofpreferredstockoutstandingatthetime,the
holdersofClassAcommonstock,ClassBcommonstock,andClassCcommonstockwillbeentitledtoshareequally,identically,and
ratably,onapersharebasis,withrespecttoanydividendordistributionofcashorpropertypaidordistributedbyus,unlessdifferent
treatmentofthesharesoftheaffectedclassisapprovedbytheaffirmativevoteoftheholdersofamajorityoftheoutstandingsharesof
theclasstreatedadverselyvotingseparatelyasaclass.EventhoughholdersofClassAcommonstockarenotnormallyentitledtoa
voteonmatterspresentedtoourstockholders,theywouldbeentitledtovoteseparatelyasaclass,withonevotepershare,ondividends
anddistributionsiftheholdersofClassAcommonstockweretreatedadversely.Asaresult,iftheholdersofClassAcommonstock
weretreatedadverselyinanydividendor

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distribution, the holders of a majority of Class A common stock could defeat that dividend or distribution. Inaddition, if any two
classesofcommonstockaretreatedadverselyrelativetoanotherclassofcommonstockwithrespecttoanydividendordistribution,
thevoteoftheholdersofamajorityoftheadverselyaffectedclasses,votingtogetherasasingleclass,wouldberequiredtoapprove
thatdividendordistribution.Forexample,ifweweretomakeadistributionofcashtotheholdersofClassCcommonstockbutnot
makeacashdistributionormakeadistributionofstockinsteadofcashtotheholdersofClassAcommonstockandClassBcommon
stock, the holders of a majority of Class A common stock and Class B common stock, voting togetheras a single class, would be
required to approve that dividend or distribution. In that scenario, each share of Class A common stock and Class B common stock
wouldbeentitledtoonevotepershare.SeeDividendPolicyforadditionalinformation.
LiquidationRights.Onourliquidation,dissolution,orwindingup,theholdersofClassAcommonstock,ClassBcommonstock,
andClassCcommonstockwillbeentitledtoshareequally,identically,andratablyinallassetsremainingafterthepaymentofany
liabilities,liquidationpreferences,andaccruedordeclaredbutunpaiddividends,ifany,withrespecttoanyoutstandingpreferredstock,
unlessadifferenttreatmentisapprovedbytheaffirmativevoteoftheholdersofamajorityoftheoutstandingsharesofeachclassof
commonstock,includingtheClassAcommonstock,votingseparatelyasaclass.Asaresult,theholdersofamajorityofeachclassof
commonstock,includingtheClassAcommonstock,coulddefeataproposeddistributionofanyassetsonourliquidation,dissolution,
orwindingupifthatdistributionwerenottobesharedequally,identically,andratably.
ChangeofControlTransactions.TheholdersofClassAcommonstock,ClassBcommonstock,andClassCcommonstockwill
betreatedequallyandidenticallywithrespecttosharesofClassAcommonstock,ClassBcommonstock,orClassCcommonstock
ownedbythem,unlessdifferenttreatmentofthesharesofeachclassisapprovedbytheaffirmativevoteoftheholdersofamajorityof
theoutstandingsharesofeachclassofcommonstock,includingtheClassAcommonstock,votingseparatelyasaclass,on(a)the
closing of the sale, transfer, or other disposition of all or substantially all of our assets, (b) the consummation of a merger,
reorganization,consolidation,orsharetransferwhichresultsinourvotingsecuritiesoutstandingimmediatelybeforethetransaction(or
thevotingsecuritiesissuedwithrespecttoourvotingsecuritiesoutstandingimmediatelybeforethetransaction)representinglessthana
majorityofthecombinedvotingpowerofthevotingsecuritiesofthecompanyorthesurvivingoracquiringentity,or(c)theclosingof
thetransfer(whetherbymerger,consolidation,orotherwise),inonetransactionoraseriesofrelatedtransactions,toapersonorgroup
of affiliated persons of securities of the company if, after closing, the transferee person or group would hold 50% or more of the
outstandingvotingpowerofthecompany(orthesurvivingoracquiringentity).However,considerationtobepaidorreceivedbya
holder of common stock in connection with any such assets sale, merger, reorganization, consolidation, or share transfer under any
employment, consulting, severance, or other arrangement will be disregarded for the purposes of determining whether holders of
commonstockaretreatedequallyandidentically.Asaresult,theholdersofamajorityofeachclassofcommonstock,includingthe
holdersClassAcommonstock,coulddefeatachangeofcontroltransactioniftheholdersofClassAcommonstock,ClassBcommon
stock,andClassCcommonstockwerenottobetreatedequallyandidenticallyinsuchchangeofcontroltransaction.
SubdivisionsandCombinations.IfwesubdivideorcombineinanymanneroutstandingsharesofClassAcommonstock,ClassB
common stock, or Class C common stock, the outstanding shares of the other classes will be subdivided or combined in the same
manner.
IfholdersofClassAcommonstockaretreatedthesameasholdersofClassBcommonstockandClassCcommonstockwith
respecttothedividendsanddistributions,liquidationrights,changeofcontroltransactions,andsubdivisionsandcombinations,such
holdersofClassAcommonstockwillnothavetherighttovoteonsuchmatters.

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NoPreemptiveorSimilarRights
OurClassAcommonstock,ClassBcommonstock,andClassCcommonstockarenotentitledtopreemptiverights,andarenot
subjecttoconversion,redemption,orsinkingfundprovisions,exceptfortheconversionprovisionswithrespecttotheClassBcommon
stockandClassCcommonstockdescribedbelow.
Conversion
Each share of Class B common stock is convertible at any time at the option of the holder into one share of ClassA common
stock.EachshareofClassCcommonstockisconvertibleatanytimeattheoptionoftheholderintooneshareofClassBcommon
stock. After the closing of this offering, on any transfer of shares of Class B common stock, whether or not for value, each such
transferred share will automatically convert into one share of ClassA common stock, except for certain transfers described in our
amendedandrestatedcertificateofincorporation,includingtransfersfortaxandestateplanningpurposes,solongasthetransferring
holdercontinuestoholdsolevotinganddispositivepowerwithrespecttothesharestransferred.Aftertheclosingofthisoffering,any
holderssharesofClassBcommonstockwillautomaticallyconvertintoClassAcommonstock,onaonetoonebasis,onthedeathof
theholder.
Aftertheclosingofthisoffering,onanytransferofsharesofClassCcommonstock,whetherornotforvalue,eachtransferred
sharewillautomaticallyconvertintooneshareofClassBcommonstock,exceptforcertaintransfersdescribedinouramendedand
restated certificate of incorporation, including transfers for tax and estate planning purposes, so long as the transferring holder or a
qualifiedtrusteeforthatholdercontinuestoholdsolevotinganddispositivepowerwithrespecttothesharestransferred,andtransfers
betweenfounders.
Aftertheclosingofthisoffering,anyholderssharesofClassCcommonstockwillautomaticallyconvertintoClassBcommon
stock, on a onetoone basis, on the date on which the number of outstanding shares of Class C common stock held by that holder
representslessthan30%oftheClassCcommonstockheldbythatholderontheclosingofthisoffering,orsharesofClassC
commonstock.Aftertheclosingofthisoffering,anyholderssharesofClassCcommonstockwillautomaticallyconvertintoClassB
commonstock,onaonetoonebasis,ninemonthsafterthedeathofthatholder.OncetherearenosharesofClassCcommonstock
outstanding,allsharesofClassBcommonstockwillconverttoClassAcommonstock,onaonetoonebasis,andallsharesofClassA
commonstockwillhaveonevotepershare,asdescribedinouramendedandrestatedcertificateofincorporation.
Aftertheclosingofthisoffering,eitherofourfoundersmaytransfersharesofClassBcommonstockorClassCcommonstockto
theotherfounderorafounderspermittedtransfereewithoutsuchtransferredsharesconvertingintoClassAcommonstockorClassB
commonstock,respectively.Inaddition,eitherfoundermaytransfersharesofClassBcommonstockorClassCcommonstocktoa
qualified trustee without such transferred shares converting into Class A common stock or Class B common stock, respectively. A
qualifiedtrusteeisaprofessionalinthebusinessofprovidingtrusteeservicesthatissubjecttoappointmentandremovalsolelybythat
founderor,followingafoundersdeathorduringthefoundersdisabilityevent,bythefoundersdesignatedproxy(whomaybethe
otherfounderoranotherpersonselectedbythefounderandapprovedtoactinthatrolebytheindependentmembersofourboardof
directors).AqualifiedtrusteemaynothaveanypecuniaryinterestinanyClassBcommonstockorClassCcommonstockheldbyany
entityofwhichthatpersonisatrustee.SharesofClassCcommonstockheldbyafoundersqualifiedtrusteewillconverttoClassB
commonstockninemonthsafterthedeathofthatfounder.Terminationofafoundersemploymentorserviceswithusdoesnotresultin
conversionofClassCcommonstockheldbysuchfounder.
OncetransferredandconvertedintoClassAcommonstock,theClassBcommonstockmaynotbereissued.Oncetransferredand
convertedintoClassBcommonstock,theClassCcommonstockmaynotbereissued.

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FullyPaidandNonAssessable
Inconnectionwiththisoffering,ourlegalcounselwillopinethatthesharesofourClassAcommonstocktobeissuedunderthis
offeringwillbefullypaidandnonassessable.
PreferredStock
AsofDecember31,2016,therewere462,700,924sharesofourpreferredstockoutstanding.Immediatelyfollowingtheclosingof
thisoffering,eachoutstandingshareofourSeriesFPpreferredstockwillconvertintooneshareofourClassCcommonstockandeach
otheroutstandingshareofpreferredstockwillconvertintooneshareofourClassBcommonstock.
On the closing of this offering and under our amended and restated certificate of incorporation, our board of directors may,
without further action by our stockholders, fix the rights, preferences, privileges, and restrictions of up to an aggregate of shares of
preferred stock in one or more series and authorize their issuance. These rights, preferences, and privileges could include dividend
rights,conversionrights,votingrights,termsofredemption,liquidationpreferences,andthenumberofsharesconstitutinganyseriesor
thedesignationofsuchseries,anyorallofwhichmaybegreaterthantherightsofourClassAcommonstock,ClassBcommonstock,
or Class C common stock. Any issuance of our preferred stock could adversely affect the voting power of holders of our Class B
common stock or Class C common stock, and the likelihood that such holders would receive dividend payments and payments on
liquidation.Inaddition,theissuanceofpreferredstockcouldhavetheeffectofdelaying,deferring,orpreventingachangeofcontrolor
othercorporateaction.Ontheclosingofthisoffering,nosharesofpreferredstockwillbeoutstanding.Wehavenopresentplantoissue
anysharesofpreferredstock.
RegistrationRights
StockholderRegistrationRights
Wearepartytoaninvestorrightsagreementthatprovidesthatcertainholdersofourpreferredstock,includingcertainholdersof
atleast5%ofourcapitalstockandentitiesaffiliatedwithcertainofourdirectors,havecertainregistrationrights,assetforthbelow.
ThisinvestorrightsagreementwasenteredintoinDecember2012andhasbeenamendedandrestatedfromtimetotimeinconnection
with our preferred stock financings. In addition, certain holders of our preferred stock have registration rights under the purchase
agreementunderwhichtheyoriginallypurchasedtheirpreferredstock.Theregistrationofsharesofourcommonstockbytheexercise
ofregistrationrightsdescribedbelowwouldenabletheholderstoselltheseshareswithoutrestrictionundertheSecuritiesActwhenthe
applicableregistrationstatementwasdeclaredeffective.Wewillpaytheregistrationexpenses,otherthanunderwritingdiscountsand
commissions,ofthesharesregisteredbythedemand,piggyback,andFormS3registrationsdescribedbelow.
Generally,inanunderwrittenoffering,themanagingunderwriter,ifany,hastheright,subjecttospecifiedconditions,tolimitthe
numberofsharessuchholdersmayinclude.Thedemand,piggyback,andFormS3registrationrightsdescribedbelowwillexpirefive
years after the effective date of the registration statement, of which this prospectus is a part, or with respect to any particular
stockholder, such time after the effective date of the registration statement that such stockholder (a) holds less than 1% of our
outstandingcommonstock(includingsharesissuableonconversionofoutstandingpreferredstock),and(b)cansellallofitsshares
underRule144oftheSecuritiesActduringany90dayperiod.
DemandRegistrationRights
TheholdersofanaggregateofsharesofourClassAcommonstock(includingsharesissuableonconversionofClassB
commonstock)andwithoutgivingeffecttothesaleofsharesinthisofferingbythesellingstockholders,willbeentitledtocertain
demandregistrationrights.Atanytimebeginning180daysafter

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theclosingofthisoffering,theholdersofatleast50%ofthesesharesmay,onnotmorethantwooccasions,requestthatweregisterall
oraportionoftheirshares.Suchrequestforregistrationmustcoveratleast50%ofsuchsharesthenoutstanding,oralesserpercentif
theanticipatedaggregateofferingprice,netofunderwritingdiscountsandcommissions,wouldexceed$10,000,000.
PiggybackRegistrationRights
After this offering, in the event that we propose to register any of our securities under the Securities Act, the holders of an
aggregateofsharesofourClassAcommonstock(includingsharesissuableonconversionofClassBcommonstockand
ClassCcommonstock),willbeentitledto,eitherforitsownaccountorfortheaccountofothersecurityholders,certainpiggyback
registrationrightsallowingtheholdertoincludetheirsharesinsuchregistration,subjecttocertainmarketingandotherlimitations.As
aresult,wheneverweproposetofilearegistrationstatementundertheSecuritiesAct,otherthanwithrespecttoademandregistration
oraregistrationstatementonFormsS4orS8,theholdersofthesesharesareentitledtonoticeoftheregistrationandhavetherightto
includetheirsharesintheregistration,subjecttolimitationsthattheunderwritersmayimposeonthenumberofsharesincludedinthe
offering.
FormS3RegistrationRights
The holders of an aggregate of 162,962,280 shares of ClassA common stock (including shares issuable on conversion of our
ClassBcommonstock),andwithoutgivingeffecttothesaleofsharesinthisofferingbythesellingstockholders,willbeentitledto
certainFormS3registrationrights.TheholdersofthesesharescanmakearequestthatweregistertheirsharesonFormS3ifweare
qualifiedtofilearegistrationstatementonFormS3andifthereasonablyanticipatedaggregategrossproceedsofthesharesoffered
wouldequalorexceed$2,000,000.WewillnotberequiredtoeffectmorethantworegistrationsonFormS3 within any 12month
period.
AntiTakeoverProvisions
CertificateofIncorporationandBylawstobeinEffectOntheClosingofthisOffering
Becauseourstockholdersdonothavecumulativevotingrights,stockholdersholdingamajorityofthevotingpowerofourshares
of common stock will be able to elect all of our directors. Our amended and restated certificate of incorporation and amended and
restated bylaws to be effective on the closing of this offering will provide for stockholder actions at a duly called meeting of
stockholdersor,beforethedateonwhichallsharesofcommonstockconvertintoasingleclass,bywrittenconsent.Aspecialmeeting
ofstockholdersmaybecalledbyamajorityofourboardofdirectors,thechairofourboardofdirectors,ourchiefexecutiveofficer,or,
beforethedateonwhichallsharesofcommonstockconvertintoasingleclass,theholdersofatleast30%ofthetotalvotingpowerof
ourClassAcommonstock,ClassBcommonstock,andClassCcommonstock,votingtogetherasasingleclass.Ouramendedand
restated bylaws will establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our
stockholders,includingproposednominationsofpersonsforelectiontoourboardofdirectors.
As described above in Class A Common Stock, Class B Common Stock, and Class C Common StockVoting Rights, our
amended and restated certificate of incorporation will further provide for a triclass common stock structure, which provides
Mr.Spiegel,ourcofounderandChiefExecutiveOfficer,andMr.Murphy,ourcofounderandChiefTechnologyOfficer,withcontrol
over all matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a
mergerorothersaleofourcompanyoritsassets.

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The foregoing provisions will make it more difficult for our existing stockholders, other than Mr. Spiegel and Mr. Murphy, to
replaceourboardofdirectorsaswellasforanotherpartytoobtaincontrolofusbyreplacingourboardofdirectors.Sinceourboardof
directorshasthepowertoretainanddischargeourofficers,theseprovisionscouldalsomakeitmoredifficultforexistingstockholders
oranotherpartytoeffectachangeinmanagement.Inaddition,theauthorizationofundesignatedpreferredstockmakesitpossiblefor
ourboardofdirectorstoissuepreferredstockwithvotingorotherrightsorpreferencesthatcouldimpedethesuccessofanyattemptto
changeourcontrol.
These provisions, including the triclass structure of our common stock, are intended to preserve our existing founder control
structureaftercompletionofourinitialpublicoffering,facilitateourcontinuedproductinnovationandtherisktakingthatitrequires,
permitustocontinuetoprioritizeourlongtermgoalsratherthanshorttermresults,enhancethelikelihoodofcontinuedstabilityinthe
composition of our board of directors and its policies and to discourage certain types of transactions that may involve an actual or
threatenedacquisitionofus.Theseprovisionsarealsodesignedtoreduceourvulnerabilitytoanunsolicitedacquisitionproposalandto
discouragecertaintacticsthatmaybeusedinproxyfights.However,suchprovisionscouldhavetheeffectofdiscouragingothersfrom
making tender offers for our shares and may have the effect of deterring hostile takeovers or delaying changes in our control or
management.Asaconsequence,theseprovisionsmayalsoinhibitfluctuationsinthemarketpriceofourstockthatcouldresultfrom
actualorrumoredtakeoverattempts.
Section203oftheDelawareGeneralCorporationLaw
Whenwehaveaclassofvotingstockthatiseitherlistedonanationalsecuritiesexchangeorheldofrecordbymorethan2,000
stockholders, we will be subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation
from engaging in any business combination with any interested stockholder for a period of three years after the date that such
stockholderbecameaninterestedstockholder,subjecttocertainexceptions.
ChoiceofForum
OuramendedandrestatedcertificateofincorporationprovidesthattheCourtofChanceryoftheStateofDelawarewillbethe
exclusiveforumfor:(i)anyderivativeactionorproceedingbroughtonourbehalf(ii)anyactionassertingabreachoffiduciaryduty
(iii) any action asserting a claim against us arising under the Delaware General Corporation Law (iv) any action regarding our
amendedandrestatedcertificateofincorporationorouramendedandrestatedbylawsor(v)anyactionassertingaclaimagainstusthat
is governed by the internal affairs doctrine. Our amended and restated certificate of incorporation further provides that the federal
district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action
arisingundertheSecuritiesAct.
LimitationsofLiabilityandIndemnification
SeeExecutiveCompensationLimitationonLiabilityandIndemnification.
ExchangeListing
OurClassAcommonstockiscurrentlynotlistedonanysecuritiesexchange.WehaveappliedtolistourClassAcommonstock
ontheNYSEunderthesymbolSNAP.
TransferAgentandRegistrar
Ontheclosingofthisoffering,thetransferagentandregistrarforourClassAcommonstock,ClassBcommonstock,andClassC
commonstockwillbeAmericanStockTransfer&TrustCompany,LLC.

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SHARESELIGIBLEFORFUTURESALE
Beforethecompletionofthisoffering,therehasbeennopublicmarketforourClassAcommonstock.Futuresalesofsubstantial
amounts of our ClassA common stock, including shares issued on the exercise of outstanding options and issuances of shares on
vestingandsettlementofRSUs,inthepublicmarketafterthisoffering,orthepossibilityofthesesalesorissuancesoccurring,could
adverselyaffecttheprevailingmarketpriceforourClassAcommonstockorimpairourabilitytoraiseequitycapital.
BasedonoursharesoutstandingasofDecember31,2016,onthecompletionofthisoffering,atotalof512,527,443sharesof
ClassA common stock, 283,817,489 shares of Class B common stock, and 215,887,848 shares of Class C common stock will be
outstanding, assuming the automatic conversion of all outstanding shares of our Series FP preferred stock into an aggregate of
215,887,848 shares of Class C common stock and all other outstanding shares of preferred stock into an aggregate of 246,813,076
sharesofClassBcommonstock,ineachcaseonthecompletionofthisoffering,andthenetissuanceof7,625,096sharesofClassA
commonstockand5,535,592sharesofClassBcommonstockthatwillvestandbeissuedfromthesettlementofcertainoutstanding
RSUssubjecttoaperformanceconditionforwhichtheservicebasedvestingconditionwassatisfied.Oftheseshares,alloftheClassA
commonstocksoldinthisofferingbyusorthesellingstockholders,plusanysharessoldbycertainsellingstockholdersonexerciseof
theunderwritersoptiontopurchaseadditionalClassAcommonstock,willbefreelytradableinthepublicmarketwithoutrestrictionor
furtherregistrationundertheSecuritiesAct,unlessthesesharesareheldbyaffiliates,asthattermisdefinedinRule144underthe
SecuritiesAct.
The remaining shares of ClassA common stock, Class B common stock, and Class C common stock will be, and shares of
Class A common stock or Class B common stock underlying outstanding RSUs or subject to stock options will be on issuance,
restrictedsecurities,asthattermisdefinedinRule144undertheSecuritiesAct.Theserestrictedsecuritiesareeligibleforpublicsale
onlyiftheyareregisteredundertheSecuritiesActoriftheyqualifyforanexemptionfromregistrationunderRules144or701under
theSecuritiesAct,whicharesummarizedbelow.RestrictedsecuritiesmayalsobesoldoutsideoftheUnitedStatestononU.S.persons
inaccordancewithRule904ofRegulationS.
SubjecttothelockupagreementsdescribedbelowandtheprovisionsofRule144orRegulationSundertheSecuritiesAct,as
well as our insider trading policy, these restricted securities will be available for sale in the public market after the date of this
prospectus.
Rule144
In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements of
Section 13 or Section 15(d) of the Exchange Act for at least 90 days, an eligible stockholder is entitled to sell such shares without
complying with the manner of sale, volume limitation, or notice provisions of Rule 144, subject to compliance with the public
information requirements of Rule 144. To be an eligible stockholder under Rule 144, such stockholder must not be deemed to have
beenoneofouraffiliatesforpurposesoftheSecuritiesActatanytimeduringthe90daysprecedingasaleandwhohasbeneficially
ownedthesharesproposedtobesoldforatleastsixmonths,includingtheholdingperiodofanypriorownerotherthanouraffiliates.If
such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior
ownerotherthanouraffiliates,thensuchpersonisentitledtosellsuchshareswithoutcomplyingwithanyoftherequirementsofRule
144,subjecttotheexpirationofthelockupagreementsdescribedbelow.

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Ingeneral,underRule144,ascurrentlyineffect,ouraffiliatesorpersonssellingsharesonbehalfofouraffiliatesareentitledto
sell on expiration of the lockup agreements described below. Beginning 90 days after the date of this prospectus, within any three
monthperiod,suchstockholdersmaysellanumberofsharesthatdoesnotexceedthegreaterof:

1% of the number of ClassA common stock then outstanding, which will equal approximately shares

immediatelyafterthisofferingor

theaverageweeklytradingvolumeofourClassAcommonstockduringthefourcalendarweeksprecedingthefilingofa

noticeonForm144withrespecttosuchsale.
SalesunderRule144byouraffiliatesorpersonssellingsharesonbehalfofouraffiliatesarealsosubjecttocertainmannerofsale
provisionsandnoticerequirementsandtotheavailabilityofcurrentpublicinformationaboutus.
Rule701
Rule 701 generally allows a stockholder who was issued shares under a written compensatory plan or contract and who is not
deemedtohavebeenanaffiliateofourcompanyduringtheimmediatelypreceding90days,tosellthesesharesinrelianceonRule144,
butwithoutbeingrequiredtocomplywiththepublicinformation,holdingperiod,volumelimitation,ornoticeprovisionsofRule144.
Rule701alsopermitsaffiliatesofourcompanytoselltheirRule701sharesunderRule144withoutcomplyingwiththeholdingperiod
requirementsofRule144.AllholdersofRule701shares,however,arerequiredbythatruletowaituntil90daysafterthedateofthis
prospectusbeforesellingthosesharesunderRule701,subjecttotheexpirationofthelockupagreementsdescribedbelow.
FormS8RegistrationStatements
WeintendtofileoneormoreregistrationstatementsonFormS8undertheSecuritiesActwiththeSECtoregistertheofferand
saleofsharesofourClassAcommonstockandClassBcommonstockthatareissuableunderour2012Plan,2014Plan,2017Plan,
andESPP.Theseregistrationstatementswillbecomeeffectiveimmediatelyonfiling.Sharescoveredbytheseregistrationstatements
willthenbeeligibleforsaleinthepublicmarkets,subjecttovestingrestrictions,anyapplicablelockupagreementsdescribedbelow,
andRule144limitationsapplicabletoaffiliates.
LockupArrangements
We and all of our directors and executive officers, and the holders of substantially all of our common stock and securities
exercisable for or convertible into our Class A common stock, Class B common stock, and Class C common stock outstanding
immediately on the closing of this offering, have agreed with the underwriters that, until 150 days after the date of this prospectus
provided,thatsuchrestrictedperiodwillendtenbusinessdayspriortothescheduledclosureofourtradingwindowforthefirstfull
fiscalquartercompletedafterthedateofthisprospectusif(A)suchrestrictedperiodendsduringorwithintenbusinessdayspriorto
thescheduledclosureofsuchtradingwindowand(B)suchrestrictedperiodwillendatleast120daysafterthedateofthisprospectus,
subjecttocertainexceptions,weandtheywillnot,withoutthepriorwrittenconsentofMorganStanley&Co.LLCorGoldman,Sachs
&Co.,directlyorindirectly,offer,sell,contracttosell,pledge,grantanyoptiontopurchase,makeanyshortsale,orotherwisedispose
oforhedgeanyofoursharesofcommonstock,anyoptions,oranysecuritiesconvertibleinto,orexchangeablefororthatrepresentthe
righttoreceivesharesofourcommonstock.Weanticipatethatthescheduledtradingwindowclosureforthefirstfullquarterafterthe
dateofthisprospectuswillbeginonJune10,2017andopenafterthefirstfulltradingdayfollowingourannouncementofearningsfor
thatquarter.TheseagreementsaredescribedinUnderwriting.EitherMorganStanley&Co.LLCorGoldman,Sachs&Co.may,in
itssolediscretion,releaseanyofthesecuritiessubjecttotheselockupagreementsatanytime.
Inaddition,weortheunderwritersmay,fromtimetotime,enterintoaseparatelockupagreementwithsomeoftheinvestorsin
thisoffering.Thisseparatelockupagreementmayprovideforarestrictedperiodthatislongerthantheperioddescribedabove.

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Inadditiontotherestrictionscontainedinthelockupagreementsdescribedabove,wehaveenteredintoagreementswithcertain
securityholders,includingourIRA,ourstandardformofoptionagreement,andourstandardformofrestrictedstockunitagreement,
thatcontainmarketstandoffprovisionsimposingrestrictionsontheabilityofsuchsecurityholderstooffer,sell,ortransferourequity
securitiesforaperiodof180daysfollowingthedateofthisprospectus.
RegistrationRights
UnderourIRAandontheclosingofthisoffering,theholdersofsharesofourClassAcommonstock(includingshares
issuable on conversion of our Class B common stock), or their transferees, will be entitled to certain rights with respect to the
registrationoftheofferandsaleoftheirsharesundertheSecuritiesAct.RegistrationofthesesharesundertheSecuritiesActwould
result in the shares becoming freely tradable without restriction under the Securities Act immediately on the effectiveness of the
registration.SeeDescriptionofCapitalStockRegistrationRightsforadditionalinformation.

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MATERIALU.S.FEDERALINCOMETAXCONSEQUENCESTONONU.S.HOLDERS
ThefollowingisasummaryofthematerialU.S.federalincometaxconsequencestononU.S.holders(asdefinedbelow)ofthe
acquisition,ownership,anddispositionofourClassAcommonstockissuedpursuanttothisoffering.Thisdiscussionisnotacomplete
analysis of all potential U.S. federal income tax consequences relating thereto, does not address the potential application of the
Medicarecontributiontax,anddoesnotaddressanyestate(excepttothelimitedextentsetforthbelow)orgifttaxconsequencesorany
taxconsequencesarisingunderanystate,local,orforeigntaxlaws,oranyotherU.S.federaltaxlaws.Thisdiscussionisbasedonthe
Internal Revenue Code of 1986, as amended, or the Code, Treasury Regulations promulgated thereunder, judicial decisions, and
published rulings and administrative pronouncements of the Internal Revenue Service, or IRS, all as in effect as of the date of this
prospectus.Theseauthoritiesaresubjecttodifferinginterpretationsandmaychange,possiblyretroactively,resultinginU.S.federal
income tax consequences different from those discussed below. We have not requested a ruling from the IRS with respect to the
statementsmadeandtheconclusionsreachedinthefollowingsummary,andtherecanbenoassurancethattheIRSoracourtwillagree
withsuchstatementsandconclusions.
ThisdiscussionislimitedtononU.S.holderswhopurchaseourClassAcommonstockpursuanttothisofferingandwhoholdour
ClassAcommonstockasacapitalassetwithinthemeaningofSection1221oftheCode(generally,propertyheldforinvestment).
ThisdiscussiondoesnotaddressalloftheU.S.federalincometaxconsequencesthatmayberelevanttoaparticularholderinlightof
suchholdersparticularcircumstances.Thisdiscussionalsodoesnotconsideranyspecificfactsorcircumstancesthatmayberelevant
toholderssubjecttospecialrulesundertheU.S.federalincometaxlaws,including:

certainformercitizensorlongtermresidentsoftheUnitedStates

partnershipsorotherpassthroughentities(andinvestorstherein)

controlledforeigncorporations

passiveforeigninvestmentcompanies

corporationsthataccumulateearningstoavoidU.S.federalincometax

banks,financialinstitutions,investmentfunds,insurancecompanies,brokers,dealers,ortradersinsecurities

taxexemptorganizationsandgovernmentalorganizations

taxqualifiedretirementplans

personssubjecttothealternativeminimumtax

personswhoholdorreceiveourClassAcommonstockpursuanttotheexerciseofanyemployeestockoptionorotherwise

ascompensation

personsthatown,orhaveowned,actuallyorconstructively,morethan5%ofourClassAcommonstock

personswhohaveelectedtomarksecuritiestomarketand

personsholdingourClassAcommonstockaspartofahedgingorconversiontransactionorstraddle,oraconstructivesale,

orotherriskreductionstrategyorintegratedinvestment.
If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds our ClassA common
stock,theU.S.federalincometaxtreatmentofapartnerinthepartnershipwillgenerallydependonthestatusofthepartnerandthe
activitiesofthepartnership.PartnershipsholdingourClassAcommonstockandthepartnersinsuchpartnershipsareurgedtoconsult
theirtaxadvisorsabouttheparticularU.S.federalincometaxconsequencestothemofholdinganddisposingofourcommonstock.

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THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE
INVESTORSSHOULDCONSULTTHEIRTAXADVISORSREGARDINGTHEPARTICULARU.S.FEDERALINCOME
TAXCONSEQUENCESTOTHEMOFACQUIRING,OWNING,ANDDISPOSINGOFOURCLASSACOMMONSTOCK,
AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL, OR FOREIGN TAX LAWS AND
ANYOTHERU.S.FEDERALTAXLAWS.
DefinitionofNonU.S.Holder
For purposes of this discussion, a nonU.S. holder is any beneficial owner of our ClassA common stock that is not a U.S.
personorapartnership(includinganyentityorarrangementtreatedasapartnership)forU.S.federalincometaxpurposes.AU.S.
personisanypersonthat,forU.S.federalincometaxpurposes,isoristreatedasanyofthefollowing:

anindividualcitizenorresidentoftheUnitedStates

acorporationcreatedororganizedunderthelawsoftheUnitedStates,anystatethereof,ortheDistrictofColumbia

anestate,theincomeofwhichissubjecttoU.S.federalincometaxregardlessofitssourceor

atrust(1)whoseadministrationissubjecttotheprimarysupervisionofaU.S.courtandwhichhasoneormoreU.S.persons
who have the authority to control all substantial decisions of the trust, or (2) that has a valid election in effect under
applicableTreasuryRegulationstobetreatedasaU.S.person.
DistributionsonOurClassACommonStock
IfwemakecashorotherpropertydistributionsonourClassAcommonstock,suchdistributionswillconstitutedividendsforU.S.
federalincometaxpurposestotheextentpaidfromourcurrentoraccumulatedearningsandprofits,asdeterminedunderU.S.federal
incometaxprinciples.AmountsnottreatedasdividendsforU.S.federalincometaxpurposeswillconstituteareturnofcapitalandwill
firstbeappliedagainstandreduceaholderstaxbasisinourClassAcommonstock,butnotbelowzero.Anyexcesswillbetreatedas
gain realized on the sale or other disposition of our Class A common stock and will be treated as described under Gain On
DispositionofOurClassACommonStockbelow.
Subject to the discussion below regarding effectively connected income, backup withholding and FATCA, dividends paid to a
nonU.S.holderofourClassAcommonstockgenerallywillbesubjecttoU.S.federalwithholdingtaxatarateof30%ofthegross
amountofthedividends,orsuchlowerratespecifiedbyanapplicableincometaxtreaty.Toreceivethebenefitofareducedtreatyrate,
anonU.S.holdermustfurnishusorourpayingagentavalidIRSFormW8BENorIRSFormW8BENE(orapplicablesuccessor
form)includingaU.S.taxpayeridentificationnumberandcertifyingsuchholdersqualificationforthereducedrate.Thiscertification
mustbeprovidedtousorourpayingagentbeforethepaymentofdividendsandmustbeupdatedperiodically.IfthenonU.S.holder
holdsthestockthroughafinancialinstitutionorotheragentactingonthenonU.S.holdersbehalf,thenonU.S.holderwillberequired
toprovideappropriatedocumentationtotheagent,whichthenwillberequiredtoprovidecertificationtousorourpayingagent,either
directlyorthroughotherintermediaries.
NonU.S.holdersthatdonotprovidetherequiredcertificationonatimelybasis,butthatqualifyforareducedtreatyrate,may
obtainarefundofanyexcessamountswithheldbytimelyfilinganappropriateclaimforrefundwiththeIRS.
IfanonU.S.holderholdsourClassAcommonstockinconnectionwiththeconductofatradeorbusinessintheUnitedStates,
and dividends paid on our Class A common stock are effectively connected with such holders U.S. trade or business (and are
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States if required by an applicable tax treaty), the nonU.S. holder will be exempt from U.S. federal withholding tax. To claim the
exemption, the nonU.S. holder must generally furnish a valid IRS Form W8ECI (or applicable successor form) to the applicable
withholdingagent.
However,anysucheffectivelyconnecteddividendspaidonourClassAcommonstockgenerallywillbesubjecttoU.S.federal
incometaxonanetincomebasisattheregulargraduatedU.S.federalincometaxratesinthesamemannerasifsuchholderwerea
residentoftheUnitedStates.AnonU.S.holderthatisaforeigncorporationalsomaybesubjecttoanadditionalbranchprofitstax
equalto30%(orsuchlowerratespecifiedbyanapplicableincometaxtreaty)ofitseffectivelyconnectedearningsandprofitsforthe
taxable year, as adjusted for certain items. NonU.S. holders should consult their tax advisors regarding any applicable income tax
treatiesthatmayprovidefordifferentrules.
GainonDispositionofOurClassACommonStock
SubjecttothediscussionbelowregardingbackupwithholdingandFATCA,anonU.S.holdergenerallywillnotbesubjecttoU.S.
federalincometaxonanygainrealizedonthesaleorotherdispositionofourClassAcommonstock,unless:

the gain is effectively connected with the nonU.S. holders conduct of a trade or business in the United States, and if
requiredbyanapplicableincometaxtreaty,isattributabletoapermanentestablishmentmaintainedbythenonU.S.holder
intheUnitedStates

thenonU.S.holderisanonresidentalienindividualpresentintheUnitedStatesfor183daysormoreduringthetaxable

yearofthedisposition,andcertainotherrequirementsaremetor

ourClassAcommonstockconstitutesaUnitedStatesrealpropertyinterestbyreasonofourstatusasaUnitedStatesreal
propertyholdingcorporation,orUSRPHC,forU.S.federalincometaxpurposesatanytimewithintheshorterofthefive
yearperiodprecedingthedispositionorthenonU.S.holdersholdingperiodforourClassAcommonstock,andourClassA
commonstockisnotregularlytradedonanestablishedsecuritiesmarketduringthecalendaryearinwhichthesaleorother
dispositionoccurs.
DeterminingwhetherweareaUSRPHCdependsonthefairmarketvalueofourU.S.realpropertyinterestsrelativetothefair
marketvalueofourothertradeorbusinessassetsandourforeignrealpropertyinterests.Webelievethatwearenotcurrentlyanddo
notanticipatebecomingaUSRPHCforU.S.federalincometaxpurposes.
Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the
regulargraduatedU.S.federalincometaxratesinthesamemannerasifsuchholderwerearesidentoftheUnitedStates.AnonU.S.
holderthatisaforeigncorporationalsomaybesubjecttoanadditionalbranchprofitstaxequalto30%(orsuchlowerratespecifiedby
anapplicableincometaxtreaty)ofitseffectivelyconnectedearningsandprofitsforthetaxableyear,asadjustedforcertainitems.Gain
describedinthesecondbulletpointabovewillbesubjecttoU.S.federalincometaxataflat30%rate(orsuchlowerratespecifiedby
anapplicableincometaxtreaty),butmaybeoffsetbycertainU.S.sourcecapitallosses(eventhoughtheindividualisnotconsidereda
residentoftheUnitedStates),providedthatthenonU.S.holderhastimelyfiledU.S.federalincometaxreturnswithrespecttosuch
losses.NonU.S.holdersshouldconsulttheirtaxadvisorsregardinganyapplicableincometaxtreatiesthatmayprovidefordifferent
rules.
InformationReportingandBackupWithholding
AnnualreportsarerequiredtobefiledwiththeIRSandprovidedtoeachnonU.S.holderindicatingtheamountofdividendson
ourClassAcommonstockpaidtosuchholderandtheamountofanytaxwithheldwithrespecttothosedividends.Theseinformation
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becausethedividendswereeffectivelyconnectedwiththeholdersconductofaU.S.tradeorbusiness,orwithholdingwasreducedor
eliminatedbyanapplicableincometaxtreaty.Thisinformationalsomaybemadeavailableunderaspecifictreatyoragreementwith
thetaxauthoritiesinthecountryinwhichthenonU.S.holderresidesorisestablished.Backupwithholding,currentlyata28%rate,
generallywillnotapplytopaymentstoanonU.S.holderofdividendsonorthegrossproceedsofadispositionofourClassAcommon
stockprovidedthenonU.S.holderfurnishestherequiredcertificationforitsnonU.S.status,suchasbyprovidingavalidIRSForm
W8BEN,IRSFormW8BENEorIRSFormW8ECI,orcertainotherrequirementsaremet.Backupwithholdingmayapplyifthe
payorhasactualknowledge,orreasontoknow,thattheholderisaU.S.personwhoisnotanexemptrecipient.
Backupwithholdingisnotanadditionaltax.Ifanyamountiswithheldunderthebackupwithholdingrules,thenonU.S.holder
shouldconsultwithaU.S.taxadvisorregardingthepossibilityofandprocedureforobtainingarefundoracreditagainstthenonU.S.
holdersU.S.federalincometaxliability,ifany.
WithholdingonForeignEntities
Sections 1471 through 1474 of the Code (commonly referred to as FATCA) impose a U.S. federal withholding tax of 30% on
certainpaymentsmadetoaforeignfinancialinstitution(asspeciallydefinedundertheserules)unlesssuchinstitutionentersintoan
agreementwiththeU.S.governmenttowithholdoncertainpaymentsandtocollectandprovidetotheU.S.taxauthoritiessubstantial
information regarding certain U.S. account holders of such institution (which includes certain equity and debt holders of such
institution,aswellascertainaccountholdersthatareforeignentitieswithU.S.owners)oranexemptionapplies.FATCAalsogenerally
will impose a U.S. federal withholding tax of 30% on certain payments made to a nonfinancial foreign entity unless such entity
providesthewithholdingagentacertificationidentifyingcertaindirectandindirectU.S.ownersoftheentityoranexemptionapplies.
AnintergovernmentalagreementbetweentheUnitedStatesandanapplicableforeigncountrymaymodifytheserequirements.Under
certaincircumstances,anonU.S.holdermightbeeligibleforrefundsorcreditsofsuchtaxes.FATCAcurrentlyappliestodividends
paidonourClassAcommonstock.FATCAwillalsoapplytogrossproceedsfromsalesorotherdispositionsofourClassAcommon
stockafterDecember31,2018.
Prospectiveinvestorsareencouragedtoconsultwiththeirowntaxadvisorsregardingthepossibleimplicationsofthislegislation
ontheirinvestmentinourClassAcommonstock.

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UNDERWRITING
Under the terms and subject to the conditions in an underwriting agreement dated the date of this prospectus, the underwriters
namedbelow,forwhomMorganStanley&Co.LLCandGoldman,Sachs&Co.areactingasrepresentatives,haveseverallyagreedto
purchase,andweandthesellingstockholdershaveagreedtoselltothem,severally,thenumberofsharesofourClassAcommonstock
indicatedbelow:

Numberof
Underwriters Shares
MorganStanley&Co.LLC
Goldman,Sachs&Co.
J.P.MorganSecuritiesLLC
DeutscheBankSecuritiesInc.
BarclaysCapitalInc.
CreditSuisseSecurities(USA)LLC
Allen&CompanyLLC
BTIG,LLC
C.L.King&Associates,Inc.
CitigroupGlobalMarketsInc.
CowenandCompany,LLC
EvercoreGroup,LLC
JefferiesLLC
JMPSecuritiesLLC
LionTreeAdvisorsLLC
LUMASecuritiesLLC
MischlerFinancialGroup,Inc.
Oppenheimer&Co.,Inc.
RBCCapitalMarkets,LLC
SamuelA.Ramirez&Co.,Inc.
StifelFinancialCorp.
SunTrustRobinsonHumphrey,Inc.
TheWilliamsCapitalGroup,L.P.
WilliamBlair&Company,L.L.C.

Total

Theunderwritersandtherepresentativesarecollectivelyreferredtoastheunderwritersandtherepresentatives,respectively.
The underwriters are offering the shares of ClassA common stock subject to their acceptance of the shares from us and the selling
stockholdersandsubjecttopriorsale.Theunderwritingagreementprovidesthattheobligationsoftheseveralunderwriterstopayfor
andacceptdeliveryofthesharesofClassAcommonstockofferedbythisprospectusaresubjecttotheapprovalofcertainlegalmatters
bytheircounselandtocertainotherconditions.TheunderwritersareobligatedtotakeandpayforallofthesharesofClassAcommon
stockofferedbythisprospectusifanysuchsharesaretaken.However,theunderwritersarenotrequiredtotakeorpayfortheshares
coveredbytheunderwritersoptiontopurchaseadditionalsharesdescribedbelow.
TheunderwritersinitiallyproposetoofferpartofthesharesofClassAcommonstockdirectlytothepublicattheofferingprice
listedonthecoverpageofthisprospectusandparttocertaindealers.AftertheinitialofferingofthesharesofClassAcommonstock,
theofferingpriceandothersellingtermsmayfromtimetotimebevariedbytherepresentatives.
Certainsellingstockholdershavegrantedtotheunderwritersanoption,exercisablefor30daysfromthedateofthisprospectus,to
purchaseuptoadditionalsharesofClassAcommonstockatthepublic

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offering price listed on the cover page of this prospectus, less underwriting discounts and commissions. To the extent the option is
exercised, each underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the
additionalsharesofClassAcommonstockasthenumberlistednexttotheunderwritersnameintheprecedingtablebearstothetotal
numberofsharesofClassAcommonstocklistednexttothenamesofallunderwritersintheprecedingtable.
Thefollowingtableshowsthepershareandtotalpublicofferingprice,underwritingdiscountsandcommissions,andproceeds
before expenses to us and the selling stockholders. These amounts are shown assuming both no exercise and full exercise of the
underwritersoptiontopurchaseuptoanadditionalsharesofourClassAcommonstock.

Total
PerShare NoExercise FullExercise
Publicofferingprice $ $ $
Underwritingdiscountsandcommissionstobepaidby:
Us $ $ $
Thesellingstockholders $ $ $
Proceeds,beforeexpenses,tous $ $ $
Proceeds,beforeexpenses,tosellingstockholders $ $ $
The estimated offering expenses payable by us, exclusive of the underwriting discounts and commissions, are approximately
$.WehaveagreedtoreimbursetheunderwritersforexpenserelatingtoclearanceofthisofferingwiththeFinancialIndustry
RegulatoryAuthority,orFINRA,upto$andexpensesincurredinconnectionwiththedirectedshareprogramandcertainother
expenses in connection with this offering. The underwriters have agreed to reimburse us for certain expenses incurred by us in
connectionwiththisoffering.
Theunderwritershaveinformedusthattheydonotintendsalestodiscretionaryaccountstoexceed5%ofthetotalnumberof
sharesofourClassAcommonstockofferedbythem.
WehaveappliedtolistourClassAcommonstockontheNYSEunderthetradingsymbolSNAP.
Weandallofourdirectorsandofficersandtheholdersofsubstantiallyallofouroutstandingequitysecuritieshaveagreedthat,
withoutthepriorwrittenconsentofeitheroftherepresentativesonbehalfoftheunderwriters,weandtheywillnot,duringtheperiod
ending150daysafterthedateofthisprospectusprovided,thatsuchrestrictedperiodwillendtenbusinessdayspriortothescheduled
closureofourtradingwindowforthefirstfullfiscalquartercompletedafterthedateofthisprospectusif(A)suchrestrictedperiod
endsduringorwithintenbusinessdayspriortothescheduledclosureofsuchtradingwindowand(B)suchrestrictedperiodwillendat
least120daysafterthedateofthisprospectus,whichwerefertoastherestrictedperiod

offer,pledge,sell,contracttosell,sellanyoptionorcontracttopurchase,purchaseanyoptionorcontracttosell,grantany
option,rightorwarranttopurchase,lendorotherwisetransferordisposeof,directlyorindirectly,anysharesofcommon
stockoranysecuritiesconvertibleintoorexercisableorexchangeableforsharesofcommonstock

file any registration statement with the SEC relating to the offering of any shares of common stock or any securities

convertibleintoorexercisableorexchangeableforcommonstockor

enterintoanyswaporotherarrangementthattransferstoanother,inwholeorinpart,anyoftheeconomicconsequencesof

ownershipofthecommonstock
whether any such transaction described above is to be settled by delivery of common stock or such other securities, in cash or
otherwise.Weanticipatethatthescheduledtradingwindowclosureforthefirstfullquarterafterthedateofthisprospectuswillbegin
onJune10,2017andopenafterthefirstfulltradingdayfollowingourannouncementofearningsforthatfiscalquarter.Inaddition,we
andeachsuchpersonagreesthat,withoutthe

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prior written consent of either of the representatives on behalf of the underwriters, we or such other person will not, during the
restrictedperiod,makeanydemandfor,orexerciseanyrightwithrespectto,theregistrationofanysharesofcommonstockorany
securityconvertibleintoorexercisableorexchangeableforcommonstock.
The lockup restrictions described in the immediately preceding paragraph do not apply to our directors, officers, and other
holdersofsubstantiallyallofouroutstandingsecuritieswithrespectto:

(i) salesofClassAcommonstocktotheunderwriterspursuanttotheunderwritingagreement

(ii) transactionsrelatingtosharesofClassAcommonstockacquiredinthisofferingorinopenmarkettransactionsafterthe

completionofthisoffering

(iii) transfers of shares of common stock or any security convertible into common stock as a bona fide gift or charitable

contribution

(iv) transfersofsharesofcommonstockoranysecurityconvertibleintocommonstocktoanimmediatefamilymemberora

trustforthedirectorindirectbenefitofthestockholderorsuchimmediatefamilymemberofthestockholder

(v) transfersofsharesofcommonstockoranysecurityconvertibleintocommonstockbywillorintestacy

(vi) transfersofsharesofcommonstockoranysecurityconvertibleintocommonstockpursuanttoadomesticrelationsorder,

divorcedecreeorcourtorder

(vii) distributions of shares of common stock or any security convertible into common stock to limited partners, members,

stockholdersorholdersofsimilarequityinterests

(viii) transfersordistributionsofsharesofcommonstockoranysecuritiesconvertibleintoorexercisableorexchangeablefor
commonstockbyastockholderthatisatrusttoatrustororbeneficiaryofthetrustortotheestateofabeneficiaryofsuch
trust

(ix) transfers to us in connection with the repurchase of common stock related to the termination of a stockholders

employmentwithuspursuanttocontractualagreementswithus

(x) thedispositionofsharesofcommonstocktous,orthewithholdingofsharesofcommonstockbyus,inatransaction
exemptfromSection16(b)oftheExchangeActsolelyinconnectionwiththepaymentoftaxesduewithrespecttothe
vesting or settlement of RSUs granted under our equity incentive plans or pursuant to a contractual employment
arrangementdescribedelsewhereinthisprospectus,insofarassuchRSUisoutstandingasofthedateofthisprospectus
provided,that,ifrequired,anypublicreportorfilingunderSection16oftheExchangeActwillclearlyindicateinthe
footnotestheretothatsuchdispositiontousorwithholdingbyusofsharesorsecuritieswassolelytouspursuanttothe
circumstancesdescribedinthisclause

(xi) the exercise of a stock option granted under our equity incentive plans described elsewhere in this prospectus, and the
receipt of shares of common stock upon such exercise, insofar as such option is outstanding as of the date of this
prospectus,providedthatanynetexerciseorcashlessexerciseofastockoptionwillonlybepermittedifsuchstockoption
willexpirepursuanttoitstermsduringtherestrictedperiod,providedfurtherthattheunderlyingshareswillcontinueto

be subject to the restrictions on transfer set forth in the lockup agreement and, provided,further that, if required, any
publicreportorfilingunderSection16oftheExchangeActwillclearlyindicateinthefootnotestheretothatthefiling
relatestotheexerciseofastockoption,thatnosharesweresoldtothepublicbythereportingpersonandthattheshares
receiveduponexerciseofthestockoptionaresubjecttothelockupagreement

(xii) transfersofsharesofcommonstockoranysecuritiesconvertibleintoorexercisableorexchangeableforcommonstock
after the closing of this offering pursuant to a bona fide merger, consolidation or other similar transaction involving a
changeofcontrolapprovedbyourboardofdirectors,provided

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that,intheeventthatsuchchangeofcontroltransactionisnotcompleted,thesecuritiesownedbyasecurityholdershall

remainsubjecttothelockupagreement

(xiii) theestablishmentofatradingplanpursuanttoRule10b51undertheExchangeActforthetransferofsharesofcommon
stock,providedthat(i)suchplandoesnotprovideforthetransferofcommonstockduringtherestrictedperiodand(ii)to
theextentapublicannouncementorfilingundertheExchangeAct,ifany,isrequiredorvoluntarilymaderegardingthe
establishmentofsuchplan,suchannouncementorfilingwillincludeastatementtotheeffectthatnotransferofcommon
stockmaybemadeundersuchplanduringtherestrictedperiod

(xiv) thesaleofsharesofcommonstockinanunderwrittenpublicofferingthatoccursduringtherestrictedperiod,including
anyconcurrentexercise(includinganetexerciseorcashlessexercise)orsettlementofoutstandingequityawardsgranted
under our equity incentive plans or pursuant to a contractual employment arrangement described elsewhere in this
prospectusinordertosellthesharesofcommonstockdelivereduponsuchexerciseorsettlementinsuchunderwritten
publicofferingprovidedthat,ifrequired,anypublicreportorfilingunderSection16oftheExchangeActwillclearly
indicateinthefootnotestheretothatsuchdispositiontousorwithholdingbyusofsharesorsecuritieswassolelytous
pursuanttothecircumstancesdescribedinthisclauseor

(xv) thereceiptofsharesofcommonstockinconnectionwiththeconversionofouroutstandingpreferredstockintosharesof
commonstockprovidedthatanysuchsharesofcommonstockreceiveduponsuchconversionwillcontinuetobesubject
totherestrictionsontransfersetforthinthelockupagreement
provided,that,inthecaseofclauses(iii),(iv),(v),(vi),(vii),or(viii)aboveeachtransferee,doneeordistributeewillsignanddelivera
lockupagreementand,provided,furtherthatinthecaseofclauses(ii),(iii),(iv),(v),(vi),(vii),(viii),or(ix)abovenofilingunder
Section16(a)oftheExchangeAct,reportingareductioninbeneficialownershipofsharesofcommonstock,willberequiredorwillbe
voluntarily made during the restricted period and, provided, further that in the case of clauses (iii), (iv), (v), (vii), and (viii), such
transferordistributionshallnotinvolveadispositionforvalue.
Thelockuprestrictionsdescribedabovedonotapplysolelytouswithrespecttocertaintransactions.
Eitheroftherepresentatives,intheirsolediscretion,mayreleasethecommonstockandothersecuritiessubjecttothelockup
agreementsdescribedaboveinwholeorinpartatanytime.
Inaddition,weortheunderwritersmay,fromtimetotime,enterintoaseparatelockupagreementwithsomeoftheinvestorsin
thisoffering.Thisseparatelockupagreementmayprovideforarestrictedperiodthatislongerthantheperioddescribedabove.
To facilitate the offering of the ClassA common stock, the underwriters may engage in transactions that stabilize, maintain or
otherwiseaffectthepriceoftheClassAcommonstock.Specifically,theunderwritersmaysellmoresharesthantheyareobligatedto
purchaseundertheunderwritingagreement,creatingashortposition.Ashortsaleiscoverediftheshortpositionisnogreaterthanthe
numberofsharesavailableforpurchasebytheunderwritersunderoptiontopurchaseadditionalshares.Theunderwriterscancloseout
acoveredshortsalebyexercisingtheoptiontopurchaseadditionalsharesorpurchasingsharesintheopenmarket.Indeterminingthe
sourceofsharestocloseoutacoveredshortsale,theunderwriterswillconsider,amongotherthings,theopenmarketpriceofshares
comparedtothepriceavailableundertheoptiontopurchaseadditionalshares.Theunderwritersmayalsosellsharesinexcessofthe
option to purchase additional shares, creating a naked short position. The underwriters must close out any naked short position by
purchasingsharesintheopenmarket.Anakedshortpositionismorelikelytobecreatediftheunderwritersareconcernedthatthere
may be downward pressure on the price of the ClassA common stock in the open market after pricing that could adversely affect
investorswhopurchaseinthisoffering.Asanadditionalmeansoffacilitatingthisoffering,theunderwritersmaybidfor,andpurchase,
sharesofClassAcommonstockintheopenmarkettostabilizethepriceoftheClassA

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commonstock.TheseactivitiesmayraiseormaintainthemarketpriceoftheClassAcommonstockaboveindependentmarketlevels
orpreventorretardadeclineinthemarketpriceoftheClassAcommonstock.Theunderwritersarenotrequiredtoengageinthese
activitiesandmayendanyoftheseactivitiesatanytime.
We, the selling stockholders and the underwriters have agreed to indemnify each other against certain liabilities, including
liabilitiesundertheSecuritiesAct.
Aprospectusinelectronicformatmaybemadeavailableonwebsitesmaintainedbyoneormoreunderwriters,orsellinggroup
members,ifany,participatinginthisoffering.TherepresentativesmayagreetoallocateanumberofsharesofClassAcommonstock
to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to
underwritersthatmaymakeInternetdistributionsonthesamebasisasotherallocations.
The underwriters and their respective affiliates are full service financial institutions engaged in various activities, which may
include securities trading, commercial and investment banking, financial advisory, investment management, investment research,
principalinvestment,hedging,financingandbrokerageactivities.Certainoftheunderwritersandtheirrespectiveaffiliateshave,from
timetotime,performed,andmayinthefutureperform,variousfinancialadvisoryandinvestmentbankingservicesforus,forwhich
theyreceivedorwillreceivecustomaryfeesandexpenses.
Forexample,inJuly2016,weenteredintotheCreditFacilitywithvariouslenders,includingaffiliatesofMorganStanley&Co.
LLC, Goldman, Sachs & Co., J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Barclays Capital Inc., and Credit Suisse
Securities(USA)LLC,thatallowsustoborrowupto$1.1billion.InDecember2016,theamountwearepermittedtoborrowunderthe
Credit Facility was increased to $1.2 billion. For additional information on the Credit Facility, see Managements Discussion and
AnalysisofFinancialConditionandResultsofOperationsLiquidityandCapitalResources.
Inaddition,intheordinarycourseoftheirvariousbusinessactivities,theunderwritersandtheirrespectiveaffiliatesmaymakeor
hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial
instruments(includingbankloans)fortheirownaccountandfortheaccountsoftheircustomersandmayatanytimeholdlongand
shortpositionsinsuchsecuritiesandinstruments.Suchinvestmentandsecuritiesactivitiesmayinvolveoursecuritiesandinstruments.
Theunderwritersandtheirrespectiveaffiliatesmayalsomakeinvestmentrecommendationsorpublishorexpressindependentresearch
viewsinrespectofsuchsecuritiesorinstrumentsandmayatanytimehold,orrecommendtoclientsthattheyacquire,longorshort
positionsinsuchsecuritiesandinstruments.
PricingoftheOffering
Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price was
determinedbynegotiationsbetweenusandtherepresentatives.Amongthefactorsconsideredindeterminingtheinitialpublicoffering
price were our future prospects and those of our industry in general, our sales, earnings and certain other financial and operating
information in recent periods, and the priceearnings ratios, pricesales ratios, market prices of securities, and certain financial and
operatinginformationofcompaniesengagedinactivitiessimilartoours.Neitherwenortheunderwriterscanassureinvestorsthatan
activetradingmarketfortheshareswilldevelop,orthataftertheofferingtheshareswilltradeinthepublicmarketatorabovethe
initialpublicprice.
DirectedShareProgram
Atourrequest,theunderwritershavereserveduptosharesofClassAcommonstock,or7.0%ofthesharesofferedby
thisprospectus,forsaleattheinitialpublicofferingpricetofriendsofourexecutiveofficers,whichmayincludeexistinginvestors.
Noneofouremployeesormembersofourboardofdirectorswill

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participateinthisdirectedshareprogram.AnyreservedsharesofourClassAcommonstockthatarenotsopurchasedwillbeoffered
bytheunderwriterstothegeneralpubliconthesametermsastheothersharesofourClassAcommonstockofferedbythisprospectus.
Wehaveagreedtoindemnifytheunderwritersagainstcertainliabilitiesandexpenses,includingliabilitiesundertheSecuritiesAct,in
connectionwithsalesofthereservedshares.Participantsinthisdirectedshareprogramwillnotbesubjecttothelockuprestriction
withrespecttoanysharespurchasedthroughthedirectedshareprogram.
SellingRestrictions
EuropeanEconomicArea
In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive, or each a
RelevantMemberState,anoffertothepublicofanysharesofourClassAcommonstockmaynotbemadeinthatRelevantMember
State,exceptthatanoffertothepublicinthatRelevantMemberStateofanysharesofourClassAcommonstockmaybemadeatany
timeunderthefollowingexemptionsundertheProspectusDirective,iftheyhavebeenimplementedinthatRelevantMemberState:

toanylegalentitywhichisaqualifiedinvestorasdefinedintheProspectusDirective

to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending
Directive,150,naturalorlegalpersons(otherthanqualifiedinvestorsasdefinedintheProspectusDirective),aspermitted
undertheProspectusDirective,subjecttoobtainingthepriorconsentoftherepresentativesforanysuchofferor

inanyothercircumstancesfallingwithinArticle3(2)oftheProspectusDirective,providedthatnosuchofferofsharesof
our common stock shall result in a requirement for the publication by us or any underwriter of a prospectus pursuant to
Article3oftheProspectusDirective.
Forthepurposesofthisprovision,theexpressionanoffertothepublicinrelationtoanysharesofourClassAcommonstockin
anyRelevantMemberStatemeansthecommunicationinanyformandbyanymeansofsufficientinformationonthetermsoftheoffer
andanysharesofourClassAcommonstocktobeofferedsoastoenableaninvestortodecidetopurchaseanysharesofourClassA
commonstock,asthesamemaybevariedinthatMemberStatebyanymeasureimplementingtheProspectusDirectiveinthatMember
State,theexpressionProspectusDirectivemeansDirective2003/71/EC(andamendmentsthereto,includingthe2010PDAmending
Directive,totheextentimplementedintheRelevantMemberState),andincludesanyrelevantimplementingmeasureintheRelevant
MemberState,andtheexpression2010PDAmendingDirectivemeansDirective2010/73/EU.
UnitedKingdom
Eachunderwriterhasrepresentedandagreedthat:

it has only communicated or caused to be communicated and will only communicate or cause to be communicated an
invitationorinducementtoengageininvestmentactivity(withinthemeaningofSection21oftheFinancialServicesand

Markets Act 2000, or FSMA, received by it in connection with the issue or sale of the shares of our common stock in
circumstancesinwhichSection21(1)oftheFSMAdoesnotapplytousand

ithascompliedandwillcomplywithallapplicableprovisionsoftheFSMAwithrespecttoanythingdonebyitinrelationto

thesharesofourcommonstockin,fromorotherwiseinvolvingtheUnitedKingdom.
Japan
NoregistrationpursuanttoArticle4,paragraph1oftheFinancialInstrumentsandExchangeLawofJapan(LawNo.25of1948,
asamended),ortheFIEL,hasbeenmadeorwillbemadewithrespecttothesolicitationoftheapplicationfortheacquisitionofthe
sharesofClassAcommonstock.

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Accordingly,thesharesofClassAcommonstockhavenotbeen,directlyorindirectly,offeredorsoldandwillnotbe,directlyor
indirectly, offered or sold in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person
residentinJapan,includinganycorporationorotherentityorganizedunderthelawsofJapan)ortoothersforreofferingorresale,
directlyorindirectly,inJapanorto,orforthebenefitof,anyresidentofJapanexceptpursuanttoanexemptionfromtheregistration
requirements,andotherwiseincompliancewith,theFIELandtheotherapplicablelawsandregulationsofJapan.
HongKong
Eachunderwriterhasrepresentedandagreedthat:

ithasnotofferedorsoldandwillnotofferorsellinHongKong,bymeansofanydocument,anyofourClassAcommon
stockotherthan(i)toprofessionalinvestorsasdefinedintheSecuritiesandFuturesOrdinance(Cap.571)ofHongKong
and any rules made under that Ordinance or (ii) in other circumstances which do not result in the document being a
prospectus as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the
publicwithinthemeaningofthatOrdinanceand

ithasnotissuedorhadinitspossessionforthepurposesofissue,andwillnotissueorhaveinitspossessionforthepurposes
ofissue,whetherinHongKongorelsewhere,anyadvertisement,invitationordocumentrelatingtoourClassAcommon
stock,whichisdirectedat,orthecontentsofwhicharelikelytobeaccessedorreadby,thepublicofHongKong(exceptif

permittedtodosounderthesecuritieslawsofHongKong)otherthanwithrespecttosharesofourClassAcommonstock
whichareorareintendedtobedisposedofonlytopersonsoutsideHongKongoronlytoprofessionalinvestorsasdefined
intheSecuritiesandFuturesOrdinanceandanyrulesmadeunderthatOrdinance.
Singapore
ThisprospectushasnotbeenregisteredasaprospectuswiththeMonetaryAuthorityofSingapore.Accordingly,thisprospectus
andanyotherdocumentormaterialinconnectionwiththeofferorsale,orinvitationforsubscriptionorpurchase,ofthesharesmaynot
becirculatedordistributed,normaythesharesbeofferedorsold,orbemadethesubjectofaninvitationforsubscriptionorpurchase,
whetherdirectlyorindirectly,topersonsinSingaporeotherthan(i)toaninstitutionalinvestorunderSection274oftheSecuritiesand
Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to
Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in
accordancewiththeconditionsof,anyotherapplicableprovisionoftheSFA,ineachcasesubjecttocompliancewithconditionsset
forthintheSFA.
WherethesharesaresubscribedorpurchasedunderSection275oftheSFAbyarelevantpersonwhichis:

acorporation(whichisnotanaccreditedinvestor(asdefinedinSection4AoftheSFA))thesolebusinessofwhichistohold
investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited
investoror

atrust(wherethetrusteeisnotanaccreditedinvestor)whosesolepurposeistoholdinvestmentsandeachbeneficiaryofthe

trustisanindividualwhoisanaccreditedinvestor,

shares,debenturesandunitsofsharesanddebenturesofthatcorporationorthebeneficiariesrightsandinterest(howsoever
described)inthattrustshallnotbetransferredwithinsixmonthsafterthatcorporationorthattrusthasacquiredtheshares
pursuanttoanoffermadeunderSection275oftheSFAexcept:

toaninstitutionalinvestor(forcorporations,underSection274oftheSFA)ortoarelevantpersondefinedinSection275(2)
oftheSFA,ortoanypersonpursuanttoanofferthatismadeontermsthatsuchshares,debenturesandunitsofsharesand
debenturesofthatcorporationorsuchrightsand

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interestinthattrustareacquiredataconsiderationofnotlessthan$200,000(oritsequivalentinaforeigncurrency)foreach
transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for
corporations,inaccordancewiththeconditionsspecifiedinSection275oftheSFA

wherenoconsiderationisorwillbegivenforthetransferor

wherethetransferisbyoperationoflaw.
Switzerland
ThesharesmaynotbepubliclyofferedinSwitzerlandandwillnotbelistedontheSIXSwissExchange,ortheSIX,oronany
other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure
standardsforissuanceprospectusesunderart.652aorart.1156oftheSwissCodeofObligationsorthedisclosurestandardsforlisting
prospectusesunderart.27ff.oftheSIXListingRulesorthelistingrulesofanyotherstockexchangeorregulatedtradingfacilityin
Switzerland.Neitherthisdocumentnoranyotherofferingormarketingmaterialrelatingtothesharesortheofferingmaybepublicly
distributedorotherwisemadepubliclyavailableinSwitzerland.
Neitherthisdocumentnoranyotherofferingormarketingmaterialrelatingtotheoffering,theCompany,theshareshavebeenor
willbefiledwithorapprovedbyanySwissregulatoryauthority.Inparticular,thisdocumentwillnotbefiledwith,andtheofferof
shareswillnotbesupervisedby,theSwissFinancialMarketSupervisoryAuthorityFINMA,orFINMA,andtheofferofshareshasnot
been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes, or CISA. The investor protection
affordedtoacquirersofinterestsincollectiveinvestmentschemesundertheCISAdoesnotextendtoacquirersofshares.
DubaiInternationalFinancialCentre
This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services
Authority,ortheDFSA.ThisprospectusisintendedfordistributiononlytopersonsofatypespecifiedintheOfferedSecuritiesRules
oftheDFSA.Itmustnotbedeliveredto,orreliedonby,anyotherperson.TheDFSAhasnoresponsibilityforreviewingorverifying
anydocumentsinconnectionwithExemptOffers.TheDFSAhasnotapprovedthisprospectusnortakenstepstoverifytheinformation
setforthhereinandhasnoresponsibilityfortheprospectus.Thesharestowhichthisprospectusrelatesmaybeilliquidand/orsubject
torestrictionsontheirresale.Prospectivepurchasersofthesharesofferedshouldconducttheirownduediligenceontheshares.Ifyou
donotunderstandthecontentsofthisprospectusyoushouldconsultanauthorizedfinancialadvisor.
Australia
No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the
Australian Securities and Investments Commission, or ASIC, in relation to the offering. This prospectus does not constitute a
prospectus,productdisclosurestatementorotherdisclosuredocumentundertheCorporationsAct2001,ortheCorporationsAct,and
doesnotpurporttoincludetheinformationrequiredforaprospectus,productdisclosurestatementorotherdisclosuredocumentunder
theCorporationsAct.
Any offer in Australia of the shares may only be made to persons, or the Exempt Investors, who are sophisticated investors
(withinthemeaningofsection708(8)oftheCorporationsAct),professionalinvestors(withinthemeaningofsection708(11)ofthe
CorporationsAct)orotherwisepursuanttooneormoreexemptionscontainedinsection708oftheCorporationsActsothatitislawful
tooffertheshareswithoutdisclosuretoinvestorsunderChapter6DoftheCorporationsAct.

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ThesharesappliedforbyExemptInvestorsinAustraliamustnotbeofferedforsaleinAustraliaintheperiodof12monthsafter
thedateofallotmentundertheoffering,exceptincircumstanceswheredisclosuretoinvestorsunderChapter6DoftheCorporations
Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is
pursuanttoadisclosuredocumentwhichcomplieswithChapter6DoftheCorporationsAct.Anypersonacquiringsharesmustobserve
suchAustralianonsalerestrictions.
Thisprospectuscontainsgeneralinformationonlyanddoesnottakeaccountoftheinvestmentobjectives,financialsituationor
particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before
making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs,
objectivesandcircumstances,and,ifnecessary,seekexpertadviceonthosematters.
Canada
Thesecuritiesmaybesoldonlytopurchaserspurchasing,ordeemedtobepurchasing,asprincipalthatareaccreditedinvestors,
as defined in National Instrument 45106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are
permitted clients, as defined in National Instrument 31103 Registration Requirements, Exemptions and Ongoing Registrant
Obligations.Anyresaleofthesecuritiesmustbemadeinaccordancewithanexemptionfrom,orinatransactionnotsubjectto,the
prospectusrequirementsofapplicablesecuritieslaws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or
damagesifthisprospectus(includinganyamendmentthereto)containsamisrepresentation,providedthattheremediesforrescissionor
damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchasers province or
territory.Thepurchasershouldrefertoanyapplicableprovisionsofthesecuritieslegislationofthepurchasersprovinceorterritoryfor
particularsoftheserightsorconsultwithalegaladvisor.
Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a nonCanadian jurisdiction,
section3A.4)ofNationalInstrument33105UnderwritingConflicts,orNI33105,theunderwritersarenotrequiredtocomplywith
thedisclosurerequirementsofNI33105regardingunderwriterconflictsofinterestinconnectionwiththisoffering.

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LEGALMATTERS
Cooley LLP, Palo Alto, California, which has acted as our counsel in connection with this offering, will pass on certain legal
matterswithrespecttoU.S.federallawinconnectionwiththisoffering.Asofthedateofthisprospectus,GC&HInvestments,LLC,an
entitythatiscomprisedofpartnersandassociatesofCooleyLLP,beneficiallyowns239,800sharesofourClassAcommonstockand
239,800sharesofourpreferredstock,whichsharesofpreferredstockwillbeconvertedinto239,800sharesofClassBcommonstock
ontheclosingofthisoffering.GoodwinProcterLLP,MenloPark,California,hasactedascounseltotheunderwritersinconnection
withthisoffering.
CHANGESININDEPENDENTREGISTEREDPUBLICACCOUNTINGFIRM
DismissalofIndependentRegisteredPublicAccountingFirm
WedismissedPricewaterhouseCoopersLLP,orPwC,asourindependentregisteredpublicaccountingfirmonMarch3,2016.The
decisiontodismissPwCwasapprovedbyourboardofdirectors.
ThereportofPwConthefinancialstatementsforthefiscalyearendedDecember31,2014containednoadverseopinionora
disclaimerofopinion,andwasnotqualifiedormodifiedastouncertainty,auditscopeoraccountingprinciple.PwCdidnotauditour
consolidatedfinancialstatementsforanyperiodsubsequentDecember31,2014.
During our fiscal year ended December 31, 2014, and the subsequent period through March 3, 2016, (1) there were no
disagreements(asthattermisusedinItem304(a)(1)(iv)ofRegulationSKandtherelatedinstructions)betweenusandPwConany
matterofaccountingprinciplesorpractices,financialstatementdisclosure,orauditingscopeorprocedure,whichdisagreements,ifnot
resolved to the satisfaction of PwC, would have caused PwC to make reference thereto in its report on our consolidated financial
statementsfortheyearendedDecember31,2014,and(2)therewerenoreportableeventsassuchtermisdefinedinItem304(a)(1)
(v)ofRegulationSK,exceptforthefollowingmaterialweaknessesidentifiedinourinternalcontroloverfinancialreporting.
The material weaknesses were identified due to the lack of sufficient qualified accounting personnel, which led to incorrect
application of generally accepted accounting principles, insufficiently designed segregation of duties and insufficiently designed
controlsoverbusinessprocesses,includingthefinancialclosingandreportingprocesseswithrespecttothedevelopmentofaccounting
policies,proceduresandestimates.TheboardofdirectorsdiscussedthematerialweaknesseswithPwC.WehaveauthorizedPwCto
respondfullytotheinquiriesofthesuccessoraccountantconcerningthesubjectmatterofeachofsuchreportableevents.
We have provided PwC with a copy of the disclosures set forth under the heading Changes in Independent Registered Public
AccountingFirmincludedinthisprospectusandhaverequestedthatPwCfurnishaletteraddressedtotheSECstatingwhetherornot
PwC agrees with statements related to them made by us under the heading Change in Independent Registered Public Accounting
Firminthisprospectus.AcopyofthatletterisfiledasExhibit16.1totheregistrationstatementofwhichthisprospectusformsapart.
NewlyAppointedIndependentRegisteredPublicAccountingFirm
We engaged Ernst & Young LLP, or Ernst & Young, as our independent registered public accounting firm on April 7, 2016 to
auditourconsolidatedfinancialstatementsfortheyearendedDecember31,2015.Thedecisiontochangeourprincipalindependent
registeredpublicaccountingfirmwasapprovedbyourboardofdirectors.
DuringourfiscalyearendedDecember31,2014,andthesubsequentperiodprecedingourengagementofErnst&Youngasour
independentregisteredpublicaccountingfirm,wedidnotconsultwithErnst&Youngon

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mattersthatinvolvedtheapplicationofaccountingprinciplestoaspecifiedtransaction,thetypeofauditopinionthatmightberendered
onourfinancialstatementsoranyothermatterthatwaseitherthesubjectofadisagreementorreportableevent.
EXPERTS
Ernst & Young LLP, independent registered public accounting firm, has audited our consolidated financial statements at
December31,2015and2016,andforeachofthetwoyearsintheperiodendedDecember31,2016,assetforthintheirreport.We
haveincludedourfinancialstatementsintheprospectusandelsewhereintheregistrationstatementinrelianceonErnst&YoungLLPs
report,givenontheirauthorityasexpertsinaccountingandauditing.
WHEREYOUCANFINDADDITIONALINFORMATION
WehavefiledwiththeSECaregistrationstatementonFormS1undertheSecuritiesActwithrespecttothesharesofClassA
commonstockofferedbythisprospectus.Thisprospectus,whichconstitutesapartoftheregistrationstatement,doesnotcontainallthe
informationsetforthintheregistrationstatement,someofwhichiscontainedinexhibitstotheregistrationstatementaspermittedby
therulesandregulationsoftheSEC.ForfurtherinformationwithrespecttousandourClassAcommonstock,wereferyoutothe
registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus
concerningthecontentsofanycontractoranyotherdocumentarenotnecessarilycomplete.Ifacontractordocumenthasbeenfiledas
an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this
prospectusrelatingtoacontractordocumentfiledasanexhibitisqualifiedinallrespectsbythefiledexhibit.Youmayobtaincopies
ofthisinformationbymailfromthePublicReferenceSectionoftheSEC,100FStreet,N.E.,Room1580,Washington,D.C.20549,at
prescribedrates.YoumayobtaininformationontheoperationofthepublicreferenceroomsbycallingtheSECat1800SEC0330.
TheSECalsomaintainsaninternetwebsitethatcontainsreportsandotherinformationaboutissuers,likeus,thatfileelectronically
withtheSEC.Theaddressofthatwebsiteiswww.sec.gov.
On the closing of this offering, we will be subject to the information reporting requirements of the Exchange Act and other
reporting requirements of the NYSE, and we will file reports and other information with the SEC as required and make any proxy
statementsavailabletotheholdersofourcapitalstockasrequiredbytherulesoftheNYSE.Oncethisofferingcloses,wewillprovide
to the holders of shares of Class A common stock the same proxy statements, information statements, annual reports, and other
informationandreportsthatwedelivertotheholdersofsharesofClassBcommonstockandClassCcommonstock.Anyproxyor
informationstatementswillclearlyindicatethatwearenotseekingfromtheholdersofnonvotingClassAcommonstocktheirproxy
tovoteonanymatterdescribedintheproxy,unlesstheywouldbeentitledtovoteonamatterpursuanttoapplicablelaw.Intheevent
wedonotfileaproxyorinformationstatement,thedisclosuresrequiredbyPartIIIofForm10Kaswellasdisclosuresrequiredbythe
NYSEthatarecustomarilyincludedinaproxystatementwillbeincludedinourForm10Kora10K/A.Foradiscussionregarding
therights,preferences,andprivilegesofourcommonstock,seeDescriptionofCapitalStock.Thesereports,proxystatementsand
otherinformationwillbeavailableforinspectionandcopyingatthepublicreferenceroomandwebsiteoftheSECreferredtoabove.
Wealsomaintainawebsiteatwww.snap.com.Informationcontainedin,oraccessiblethrough,ourwebsiteisnotapartofthis
prospectus,andtheinclusionofourwebsiteaddressinthisprospectusisonlyasaninactivetextualreference.

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SnapInc.
IndextoConsolidatedFinancialStatements

Pages
ReportofIndependentRegisteredPublicAccountingFirm F2
ConsolidatedBalanceSheets F3
ConsolidatedStatementsofOperations F4
ConsolidatedStatementsofComprehensiveIncome(Loss) F5
ConsolidatedStatementsofStockholdersEquity F6
ConsolidatedStatementsofCashFlows F8
NotestoConsolidatedFinancialStatements F9

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ReportofIndependentRegisteredPublicAccountingFirm
TheBoardofDirectorsandStockholders
SnapInc.
WehaveauditedtheaccompanyingconsolidatedbalancesheetsofSnapInc.asofDecember31,2015and2016,andtherelated
consolidatedstatementsofoperations,comprehensiveincome(loss),stockholdersequityandcashflowsforeachofthetwoyearsin
the period ended December 31, 2016. These financial statements are the responsibility of the Companys management. Our
responsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudits.
WeconductedourauditsinaccordancewiththestandardsofthePublicCompanyAccountingOversightBoard(UnitedStates).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statementsarefreeofmaterialmisstatement.WewerenotengagedtoperformanauditoftheCompanysinternalcontroloverfinancial
reporting.Ourauditsincludedconsiderationofinternalcontroloverfinancialreportingasabasisfordesigningauditproceduresthat
areappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompanysinternal
controloverfinancialreporting.Accordingly,weexpressnosuchopinion.Anauditalsoincludesexamining,onatestbasis,evidence
supportingtheamountsanddisclosuresinthefinancialstatements,assessingtheaccountingprinciplesusedandsignificantestimates
madebymanagement,andevaluatingtheoverallfinancialstatementpresentation.Webelievethatourauditsprovideareasonablebasis
forouropinion.
Inouropinion,thefinancialstatementsreferredtoabovepresentfairly,inallmaterialrespects,theconsolidatedfinancialposition
ofSnapInc.atDecember31,2015and2016,andtheconsolidatedresultsofitsoperationsanditscashflowsforeachofthetwoyears
intheperiodendedDecember31,2016,inconformitywithU.S.generallyacceptedaccountingprinciples.
/s/Ernst&YoungLLP
LosAngeles,California
January26,2017

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SnapInc.
ConsolidatedBalanceSheets
(inthousands,exceptpershareamounts)

ProForma
December31, December31,
2015 2016 2016
(unaudited)
Assets
Currentassets
Cashandcashequivalents $ 640,810 $ 150,121 $ 150,121
Marketablesecurities 837,247 837,247
Accountsreceivable,netofallowance 44,325 162,659 162,659
Prepaidexpensesandothercurrentassets

7,429

29,958

29,958

Totalcurrentassets 692,564 1,179,985 1,179,985

Propertyandequipment,net 44,079 100,585 100,585
Intangibleassets,net 43,230 75,982 75,982
Goodwill 133,944 319,137 319,137
Otherassets

25,119

47,103

47,103

Totalassets $ 938,936

$ 1,722,792
$ 1,722,792

LiabilitiesandStockholdersEquity
Currentliabilities
Accountspayable $ 702 $ 8,419 $ 8,419
Accruedexpensesandothercurrentliabilities

155,556

148,325

335,517

Totalcurrentliabilities 156,258 156,744 343,936

Otherliabilities

18,533

47,134

47,134

Totalliabilities

174,791

203,878

391,070

Commitmentsandcontingencies(Note8)
Stockholdersequity
Convertiblevotingpreferredstock,SeriesA,A1,andB,$0.00001parvalue.146,962sharesauthorized,
issued,andoutstandingatDecember31,2015andDecember31,2016andnosharesauthorized,issued,
andoutstanding,proforma.Liquidationpreferenceof$95,175atDecember31,2015andDecember31,
2016. 1 1
Convertiblenonvotingpreferredstock,SeriesC,$0.00001parvalue.16,000sharesauthorized,issued,and
outstandingatDecember31,2015andDecember31,2016andnosharesauthorized,issued,and
outstanding,proforma.Liquidationpreferenceof$54,543atDecember31,2015andDecember31,
2016.
Convertiblenonvotingpreferredstock,SeriesD,E,andF,$0.00001parvalue.56,351sharesauthorized,
44,555sharesissuedandoutstandingatDecember31,2015,83,851sharesauthorized,issued,and
outstandingatDecember31,2016andnosharesauthorized,issued,andoutstanding,proforma. 1 2
SeriesFPconvertiblevotingpreferredstock,$0.00001parvalue.217,767sharesauthorized,issued,and
outstandingatDecember31,2015,260,888sharesauthorized,215,888sharesissuedandoutstandingat
December31,2016andnosharesauthorized,issued,andoutstanding,proforma. 2 2
ClassAnonvotingcommonstock,$0.00001parvalue.1,500,000sharesauthorized,460,655sharesissued
andoutstandingatDecember31,2015,1,500,000sharesauthorized,504,902sharesissuedand
outstandingatDecember31,2016and3,000,000sharesauthorized,512,527sharesissuedand
outstanding,proforma. 5 5 5
ClassBvotingcommonstock,$0.00001parvalue.730,000sharesauthorized,30,931sharesissuedand
outstandingatDecember31,2015,1,500,000sharesauthorized,31,469sharesissuedandoutstandingat
December31,2016and700,000sharesauthorized,283,817sharesissuedandoutstanding,proforma. 3
ClassCvotingcommonstock,$0.00001parvalue.Nosharesauthorized,issued,andoutstandingat
December31,2015,260,888sharesauthorized,nosharesissuedandoutstandingatDecember31,2016
and260,888sharesauthorized,215,888sharesissuedandoutstanding,proforma. 2
Notesreceivablefromofficers/stockholders (10,000)
Additionalpaidincapital 1,467,355 2,728,823 3,639,620
Accumulatedothercomprehensiveincome(loss) (2,057) (2,057)
Accumulateddeficit

(693,219)

(1,207,862)

(2,305,851)

Totalstockholdersequity

764,145

1,518,914

1,331,722

Totalliabilitiesandstockholdersequity $ 938,936

$ 1,722,792

$ 1,722,792

SeeNotestoConsolidatedFinancialStatements.

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SnapInc.
ConsolidatedStatementsofOperations
(inthousands,exceptpershareamounts)

YearEnded
December31,
2015 2016
Revenue $ 58,663 $ 404,482
Costsandexpenses:

148,600

165,160


440,392

924,867



(152)

(4,568)



7,589

7,080
Netloss $(372,893)
$(514,643)

preferredstockholders(Note15):
Basic $ (0.51) $

(0.64)

Diluted $ (0.51) $

(0.64)

ProformanetlosspershareattributabletoClassA,ClassB,andClassCcommonstockholders(Note15):
Basic $ (0.53)

Diluted $ (0.53)


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SnapInc.
ConsolidatedStatementsofComprehensiveIncome(Loss)
(inthousands)

2015 2016
Netloss $(372,893)
$(514,643)

Othercomprehensiveincome(loss),netoftax:
Unrealizedgain(loss)onmarketablesecurities,netoftax 44
Foreigncurrencytranslation

(2,101)

Totalothercomprehensiveincome(loss),netoftax

(2,057)

Totalcomprehensiveincome(loss) $(372,893)
$(516,700)

2/2/2017 S-1

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SnapInc.
ConsolidatedStatementsofStockholdersEquity
(inthousands)

YearEnded
December31,
2015 2016
Shares Amount Shares Amount
ConvertiblevotingpreferredstockSeriesA,A1,andB
Balance,beginningandendofperiod

146,962

$

1

146,962

$

1

ConvertiblenonvotingpreferredstockSeriesC
Balance,beginningandendofperiod

16,000

16,000

ConvertiblenonvotingpreferredstockSeriesD,E,andF
Balance,beginningofperiod 23,351 44,555 1
IssuanceofSeriesFnonvotingpreferredstock,netofissuancecosts 21,204 1 37,668 1
ExchangeofSeriesFPvotingpreferredstockforSeriesFnonvoting
preferredstock

1,628

Balance,endofperiod

44,555

1

83,851

2

ConvertiblevotingpreferredstockSeriesFP
Balance,beginningofperiod 217,767 2 217,767 2
RepurchaseofSeriesFPvotingpreferredstock (252)
ExchangeofSeriesFPvotingpreferredstockforSeriesFnonvoting
preferredstock

(1,628)

Balance,endofperiod

217,767

2

215,887

2

ClassAnonvotingcommonstock
Balance,beginningofperiod 437,363 5 460,655 5
ImpactofClassAstocksplitrelatedtoSeriesFnonvotingpreferredstock 21,204 37,668
ImpactofClassAstocksplitrelatedtoClassBvotingcommonstock 183 538
ImpactofClassAstocksplitrelatedtorepurchaseofSeriesFPvotingpreferred
stock (252)
Sharesissuedinconnectionwithexerciseofstockoptionsunderstockbased
compensationplans 2
IssuanceofClassAnonvotingcommonstockinconnectionwithacquisitions

1,903

6,293

Balance,endofperiod

460,655

5 504,902

5
ClassBvotingcommonstock
Balance,beginningofperiod 30,748 30,931
compensationplans 59 686
RepurchaseofClassBvotingcommonstock (32) (536)
IssuanceofClassBvotingcommonstockforvestingofrestrictedstockunits

156

388

Balance,endofperiod

30,931

$ 31,469

$


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SnapInc.
ConsolidatedStatementsofStockholdersEquity(Continued)
(inthousands)

YearEnded
December31,
2015 2016
Shares Amount Shares Amount
Additionalpaidincapital
Balance,beginningofperiod $ 711,978 $ 1,467,355
Stockbasedcompensationexpense 73,524 31,842
compensationplans 60 698
VestingofsharesrelatedtoearlyexerciseofClassAnonvotingcommon
stockoptions 2,218 49
IssuanceofSeriesFnonvotingpreferredstock,netofissuancecosts 651,305 1,157,146
IssuanceofClassAnonvotingcommonstockinconnectionwithacquisitions 96,145
IssuanceofClassBvotingcommonstockinconnectionwithacquisitions 29,270
RepurchaseofClassBvotingcommonstock (1,000) (8,013)
RepurchaseofSeriesFPvotingpreferredstock (16,180)
Settlementofrestrictedstockunits

(219)
Balance,endofperiod

1,467,355

2,728,823

Accumulateddeficit
Balance,beginningofperiod (320,326) (693,219)
Netloss

(372,893)

(514,643)

Balance,endofperiod

(693,219)

(1,207,862)

Notesreceivablefromofficers/stockholders
Balance,beginningofperiod (2,500) (10,000)
Issuanceofnotesreceivablefromofficers/stockholders (7,500) (15,000)
Repaymentofnotesreceivablefromofficers/stockholders

25,000

Balance,endofperiod

(10,000)

Accumulatedothercomprehensiveincome(loss)
Balance,beginningofperiod
Othercomprehensiveincome(loss)

(2,057)
Balance,endofperiod

(2,057)
Totalstockholdersequity 916,870
$ 764,145

999,071

$ 1,518,914


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SnapInc.
ConsolidatedStatementsofCashFlows
(inthousands)

YearEnded
December31,
2015 2016
Cashflowsfromoperatingactivities
Netloss $(372,893) $ (514,643)
Adjustmentstoreconcilenetlosstonetcashusedinoperatingactivities:
Depreciationandamortization 15,307 29,115
Stockbasedcompensation 73,524 31,842
Deferredincometaxes (7,700) (7,952)
Other 626 889
Changeinoperatingassetsandliabilities,netofeffectofacquisitions:
Accountsreceivable,netofallowance (41,905) (118,434)
Prepaidexpensesandothercurrentassets (6,590) (20,521)
Otherassets (4,451) (5,064)
Accountspayable (6,724) 6,486
Accruedexpensesandothercurrentliabilities 40,026 (19,728)
Otherliabilities 4,158 6,765

Netcashusedinoperatingactivities

(306,622)

(611,245)

Cashflowsfrominvestingactivities
Purchasesofpropertyandequipment (19,205) (66,441)
Purchasesofintangibleassets (9,100) (572)
Nonmarketableinvestments (9,551) (6,513)
Cashpaidforacquisitions,netofcashacquired (48,730) (104,001)
Issuanceofnotesreceivablefromofficers/stockholders (7,500) (15,000)
Repaymentofnotesreceivablesfromofficers/stockholders 15,000
Purchasesofmarketablesecurities (1,565,347)
Salesofmarketablesecurities 195,898
Maturitiesofmarketablesecurities 532,690
Changeinrestrictedcash (1,856) (7,048)
Otherinvestingactivities

(5,000)

Netcashusedininvestingactivities

(100,942)

(1,021,334)

Cashflowsfromfinancingactivities
Proceedsfromtheexerciseofstockoptions 60 731
RepurchaseofClassBvotingcommonstockandSeriesFPvotingpreferredstock (1,000) (10,593)
Proceedsfromissuancesofpreferredstock,netofissuancecosts 651,306 1,157,147
Borrowingsfromrevolvingcreditfacility 5,000
Principalpaymentsonrevolvingcreditfacility (5,000)
Paymentsofdeferredofferingcosts

(5,395)
Netcashprovidedbyfinancingactivities 650,366 1,141,890

Changeincashandcashequivalents 242,802 (490,689)

Cashandcashequivalents,beginningofperiod

398,008

640,810

Cashandcashequivalents,endofperiod $ 640,810
$ 150,121

Supplementaldisclosures
Cashpaidforincometaxes $ 3 $ 1,686
Supplementaldisclosuresofnoncashactivities
IssuanceofClassBvotingcommonstockrelatedtoacquisitions $ 29,270 $ 96,145
Purchaseconsiderationliabilitiesrelatedtoacquisitions $ $ 21,085
RepurchaseofClassBvotingcommonstockandSeriesFPvotingpreferredstockinexchangefornotesreceivable
fromofficers/stockholders $ $ 13,500
Constructioninprogressrelatedtofinancingleaseobligations $ 6,305 1,789
Netchangeinaccountspayableandaccruedexpensesandothercurrentliabilitiesrelatedtopropertyandequipment
additions $ 3,174 $ 2,084
Deferredofferingcostsaccrued,unpaid $ $ 1,739

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SnapInc.
NotestoConsolidatedFinancialStatements
1.NatureofBusinessandSummaryofSignificantAccountingPolicies
Business
Snap Inc. (we, our, or us) was formed as Future Freshman, LLC, a California limited liability company, in 2010. We
changedournametoToyopaGroup,LLCin2011,incorporatedasSnapchat,Inc.,aDelawarecorporation,in2012,andchangedour
nametoSnapInc.in2016.SnapInc.isheadquarteredinVenice,California.Ourflagshipproduct,Snapchat,isacameraapplication
thatwascreatedtohelppeoplecommunicatethroughshortvideosandimagescalledSnaps.
BasisofPresentationandPrinciplesofConsolidation
OurconsolidatedfinancialstatementsarepreparedinaccordancewithU.S.generallyacceptedaccountingprinciples(GAAP).
Our consolidated financial statements include the accounts of Snap Inc. and our whollyowned subsidiaries. All intercompany
transactionsandbalanceshavebeeneliminatedinconsolidation.OurfiscalyearendsonDecember31.
StockSplitEffectedintheFormofaStockDividend
On October 26, 2016, our board of directors approved a distribution of shares of Class A common stock as a dividend to the
holdersofallpreferredstockandcommonstockoutstandingonOctober31,2016.OneshareofClassAcommonstockwasdistributed
foreachshareofpreferredstockandcommonstockoutstanding(theStockSplit).AsaresultoftheStockSplit,eachoutstanding
equityawardwasadjustedtoentitletheawardholdertoreceiveoneshareofClassAcommonstockforeachoutstandingrestricted
stockawardorstockoptiontoacquireashareofeitherClassAcommonstockorClassBcommonstock.Shareandpershareamounts
forClassAcommonstockdisclosedforallpriorperiodshavebeenretroactivelyadjustedtoreflecttheeffectsoftheStockSplit.The
StockSplitdidnotaffectoutstandingsharesofpreferredstock.
UnauditedProFormaBalanceSheetInformation
Inconnectionwithaqualifyinginitialpublicoffering,asdescribedinNote9,(i)alloutstandingconvertiblepreferredstockother
thanSeriesFPconvertiblevotingpreferredstockwillautomaticallyconvertintosharesofClassBcommonstock,and(ii)allsharesof
SeriesFPconvertiblevotingpreferredstockwillautomaticallyconvertintosharesofClassCcommonstock.Theunauditedproforma
balancesheetinformationgiveseffecttotheconversionoftheconvertiblepreferredstockasofDecember31,2016.
Additionally,asdescribedinStockbasedCompensationbelow,wegrantedrestrictedstockunits(RSUs)toemployeeswhich
included both servicebased and performance conditions to vest in the underlying common stock. The performance condition is
satisfiedoneither:(1)achangeincontrolevent,suchasasaleofallorsubstantiallyallofourassetsoramergerinvolvingthesaleofa
majorityoftheoutstandingsharesofourvotingcapitalstock,or(2)theeffectivedateofourregistrationstatementinconnectionwitha
qualifying initial public offering. We expect to record stockbased compensation expense related to the vesting of RSUs on the
effectivenessofourinitialpublicoffering.Accordingly,theunauditedproformabalancesheetinformationatDecember31,2016gives
effect to stockbased compensation expense of approximately $1.1 billion associated with these RSUs, for which the servicebased
condition was satisfied as of December 31, 2016. This pro forma adjustment related to stockbased compensation expense of
approximately $1.1 billion has been reflected as an increase to additional paidin capital and accumulated deficit. To meet the tax
withholdingrequirements,wewill

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SnapInc.
NotestoConsolidatedFinancialStatements(Continued)

withholdthenumberofsharesnecessarytosatisfythetaxwithholdingobligations,basedonthefairvalueofourcommonstockonthe
dateoftheinitialpublicoffering.Wecurrentlyexpectthattheaverageofthesewithholdingtaxrateswillbeapproximately47%.Ifthe
priceofourcommonstockatthetimeofsettlementwereequalto$16.33pershare,whichisthefairvalueofourcommonstockasof
December 31, 2016, we estimate that this tax withholding obligation would be approximately $187.2 million in the aggregate. Such
amount is included as an increase in accrued expenses and other current liabilities, and an equivalent decrease in additional paidin
capitalintheproformabalancesheetasofDecember31,2016.ForRSUsforwhichtheservicebasedvestingconditionwassatisfied
as of December 31, 2016, the pro forma shares outstanding as of December 31, 2016 includes the issuance of 7.6 million shares of
ClassAcommonstock,netof6.5millionshareswithheldfortaxwithholdingobligations,and5.5millionsharesofClassBcommon
stock,netof5.0millionshareswithheldfortaxwithholdingobligations.
Inaddition,basedonthetermsoftheChiefExecutiveOfficers(CEOs)offerletter,ontheclosingoftheinitialpublicoffering,
theCEOwillreceiveanRSUaward(CEOaward)forsharesofSeriesFPpreferredstock,whichwillbecomeanRSUcoveringan
equivalent number of shares of Class C common stock on the closing of the initial public offering. The shares underlying the CEO
awardhavevotingrightsondeliveryandsettlementofsuchshares.Suchsharesareparticipatingsecuritiesonthedateoftheclosingof
theinitialpublicofferingbecausetheywillparticipateinalldividendsonClassCcommonstock.TheCEOawardwillrepresent3.0%
ofalloutstandingsharesontheclosingoftheinitialpublicoffering,whichincludessharessoldbyusintheinitialpublicofferingand
the employee RSUs that will vest on the effective date of the registration statement in connection with a qualifying initial public
offering.TheCEOawardwillvestimmediatelyontheclosingoftheinitialpublicofferingandsuchshareswillbedeliveredtothe
CEOinequalquarterlyinstallmentsoverthreeyearsbeginninginthethirdfullcalendarquarterfollowingtheinitialpublicoffering.
ThereisnocontinuingservicerequirementoftheCEOfollowingtheclosingoftheinitialpublicoffering.
TheeffectoftheCEOawardisnotincludedintheunauditedproformabalancesheetinformationduetouncertaintyregardingthe
postIPOsharesoutstandingandtheIPOpricepershare.WhenthereareestimatesrelatedtothepostIPOsharesoutstandingandthe
IPOpricepershare,theunauditedproformabalancesheetwillbeupdatedtoreflecttheestimatedamountofcompensationexpense
related to these fully vested awards to be recognized on the effective date of the initial public offering for the CEO award. Shares
relatedtotheCEOawardwillnotbeincludedintheproformaoutstandingsharesontheeffectivedateoftheinitialpublicoffering
becausesuchshareswillbedeliveredinequalquarterlyinstallmentssubsequenttotheinitialpublicofferinginaccordancewiththe
termsoftheCEOaward.
TheassociatedincometaxeffecttoreflecttheanticipatedfuturetaxbenefitsonsettlementoftheaboveRSUsisnotexpectedto
bematerialaswehaveestablishedavaluationallowancetoreduceournetdeferredtaxassetstotheamountthatismorelikelythannot
toberealized(seeNote7).
UseofEstimates
ThepreparationofourconsolidatedfinancialstatementsinconformitywithGAAPrequiresmanagementtomakeestimatesand
assumptionsthataffectthereportedamountsintheconsolidatedfinancialstatements.Managementsestimatesarebasedonhistorical
information available as of the date of the consolidated financial statements and various other assumptions that we believe are
reasonableunderthecircumstances.Actualresultscoulddifferfromthoseestimates.
Keyestimatesrelateprimarilytodeterminingthefairvalueofassetsandliabilitiesassumedinbusinesscombinations,evaluation
ofcontingencies,uncertaintaxpositions,andthefairvalueofstockbasedawards.On

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anongoingbasis,managementevaluatesourestimatescomparedtohistoricalexperienceandtrends,whichformthebasisformaking
judgmentsaboutthecarryingvalueofassetsandliabilities.
ConcentrationsofBusinessRisk
OuragreementwithGooglerequiresthatweusetheircloudservicesforsubstantiallyallofourhostingrequirements.Adisruption
orlossofservicefromthispartnercouldseriouslyharmourabilitytooperate.Althoughwebelievethereareotherqualifiedproviders
thatcanprovidetheseservices,atransitiontoanewprovidercouldcreateasignificantdisruptiontoourbusinessandnegativelyimpact
ourconsolidatedfinancialstatements.
SeeNote18fordiscussionofsubsequenteventsrelatingtothisagreement.
ConcentrationsofCreditRisk
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, cash
equivalents, marketable securities, and accounts receivable. We maintain cash deposits, cash equivalent balances, and marketable
securitieswithseveralfinancialinstitutions.Cashandcashequivalentsmaybewithdrawnorredeemedondemand.Webelievethatthe
financial institutions that hold our cash and cash equivalents are financially sound and, accordingly, minimal credit risk exists with
respecttothesebalances.WealsomaintaininvestmentsinU.S.governmentdebtandagencysecuritiesthatcarryhighcreditratingsand
accordingly,minimalcreditriskexistswithrespecttothesebalances.
Weextendcredittoourcustomersbasedonanevaluationoftheirabilitytopayamountsdueundercontractualarrangementand
generallydonotobtainorrequirecollateral.
RevenueRecognition
WegeneratesubstantiallyallofourrevenuesbyofferingvariousadvertisingproductsonSnapchat,includingSnapAds,whichare
vertical full screen video advertisements, and Sponsored Creative Tools, which include Geofilters and Lenses. Sponsored Geofilters
allowuserstointeractwithanadvertisersbrandbyenablingstylizedbrandartworktobeoverlaidonaSnap.SponsoredLensesallow
userstointeractwithanadvertisersbrandbyenablingbrandedinteractiveexperiences.
Revenuefromouradvertisingproductsisrecognizedwhenpersuasiveevidenceofanarrangementexistswithourcustomers,the
serviceshavebeenprovidedordelivered,thefeesarefixedordeterminable,andcollectabilityoftherelatedreceivableisreasonably
assured. Advertising revenue is generated from the display of advertisements on Snapchat through contractual agreements, that are
either on a fixed fee basis over a period of time or based on the number of advertising impressions delivered. Revenue related to
agreementsbasedonthenumberofimpressionsdeliveredisrecognizedwhentheadvertisementisdisplayed.Revenuerelatedtofixed
feearrangementsisrecognizedratablyovertheserviceperiod,typicallylessthan30daysinduration,andsucharrangementsdonot
contain minimum impression guarantees. In determining whether an arrangement exists, we ensure that an agreement, such as an
insertionorder,hasbeenfullyexecuted.Wedeterminecollectabilitybyperformingongoingcreditevaluationsandmonitoringcustomer
accountsreceivablebalances.Salestaxisexcludedfromreportedrevenue.
Weselladvertisingdirectlytoadvertisers(Snapsoldrevenue)andcertainpartnersthatprovidecontentonSnapchat(content
partners)alsoselldirectlytoadvertisers(partnersoldrevenue).SnapAdsmaybesubjecttorevenuesharingagreementsbetweenus
andourcontentpartners.OurSponsoredCreativeToolsareonlySnapsoldandarenotsubjecttorevenuesharingarrangements.Snap
soldrevenueisrecognizedbasedonthegrossamountthatwechargetheadvertiser.Partnersoldrevenueisrecognizedbasedonthenet
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87%and91%ofouradvertisingrevenuewasSnapsoldandapproximately13%and9%ofouradvertisingrevenuewaspartnersold,
respectively.
We report Snapsold revenue on a gross basis predominately because we are the primary obligor responsible for fulfilling
advertisement delivery, including the acceptability of the services delivered. For Snapsold advertising, we enter into contractual
arrangements directly with advertisers. We are directly responsible for the fulfillment of the contractual terms and any remedy for
issueswithsuchfulfillment.ForSnapsoldrevenue,wealsohavelatitudeinestablishingthesellingpricewiththeadvertiser,aswesell
advertisementsataratedeterminedatoursolediscretion.
Wereportrevenuerelatedtotransactionssoldbyourcontentpartnersonanetbasispredominatelybecausethecontentpartner,
andnotSnapInc.,istheprimaryobligorresponsibleforfulfillment,includingtheacceptabilityoftheservicesdelivered.Inpartnersold
advertising arrangements, the content partner has a direct contractual relationship with the advertiser. There is no contractual
relationshipbetweenusandtheadvertiserforpartnersoldtransactions.Whenacontentpartnersellsadvertisements,thecontentpartner
is responsible for fulfilling the advertisements, and accordingly, we have determined the content partner is the primary obligor.
Additionally,wedonothaveanylatitudeinestablishingthepricewiththeadvertiserforpartnersoldadvertising.Thecontentpartner
mayselladvertisementsataratedeterminedatitssolediscretion.
Wealsogeneraterevenuefromsalesofourhardwareproduct,Spectacles.RevenuefromsalesofSpectaclesisrecognizedwhen
delivered,riskoflosshastransferredtothecustomer,andnosignificantobligationsremain.Weoffercustomerslimitedrightstoreturn
productsandwerecordreductionstorevenueforexpectedfutureproductreturns.RevenuefortheyearendedDecember31,2016from
thesalesofSpectacleswasnotmaterial.
CostofRevenue
Cost of revenue includes payments made by us based on revenue share arrangements with our content partners. Under these
arrangements,wepayaportionofthefeeswereceivefromtheadvertisersforSnapAdsthataredisplayedwithinpartnercontenton
Snapchat.Suchrevenuesharecostswere$9.6millionand$57.8millionfortheyearsendedDecember31,2015and2016,respectively.
In addition, cost of revenue consists of expenses associated with hosting costs of the Snapchat mobile application and content
creation,whichincludespersonnelrelatedcostsandadvertisingmeasurementservices.Inaddition,costofrevenueincludesinventory
costsforourSpectacleshardwareproductandfacilitiesandothersupportingoverheadcosts,includingdepreciationandamortization.
Advertising
Advertisingcostsareexpensedasincurredandwere$2.7millionand$9.4millionfortheyearsendedDecember31,2015and
2016,respectively.
StockbasedCompensation
Wemeasureandrecognizecompensationexpenseforstockbasedpaymentawards,includingstockoptionsandRSUsgrantedto
employeesandadvisors,basedonthegrantdatefairvalueoftheawards.Awardsgrantedtononemployeesaremarkedtomarketeach
quarter.ThegrantdatefairvalueofstockoptionsisestimatedusingaBlackScholesoptionpricingmodel.Thefairvalueofstock
basedcompensationforstockoptionsisrecognizedonastraightlinebasis,netofestimatedforfeitures,overtheperiodduringwhich
services are provided in exchange for the award. The grant date fair value of RSUs is estimated based on the fair value of our
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SubstantiallyallRSUsgrantedtoemployeesbeforeDecember31,2016containbothservicebasedandperformanceconditionsto
vestintheunderlyingcommonstock.Theservicebasedconditioncriteriaisgenerallymet10%afterthefirstyearofservice,20%over
thesecondyear,30%overthethirdyear,and40%overthefourthyear.Theperformanceconditionwillbesatisfiedoneither:(1)a
change in control event, such as a sale of all or substantially all of our assets or a merger involving the sale of a majority of the
outstanding shares of our voting capital stock, or (2) the effective date of the registration statement in connection with a qualifying
initial public offering. A change in control event and effective registration event are not deemed probable until consummated
accordingly no expense is recorded related to these awards until the performance condition becomes probable of occurring. Awards
which contain both servicebased and performance conditions are recognized using the accelerated attribution method once the
performanceconditionisprobableofoccurring.
In limited instances, we issue RSUs that vest solely on a servicebased condition. For these awards, we recognize stockbased
compensationexpenseonastraightlinebasisoverthevestingperiod.
Stock option and RSU awards issued to nonemployees are accounted for at fair value. The fair value of each nonemployee
stockbasedcompensationawardisremeasuredeachperioduntiltheearlierofthedateatwhichthenonemployeesperformanceis
complete or a performance commitment date is reached, which is generally the vesting date. Stockbased compensation expense for
nonemployeestockawardsisrecognizedonastraightlinebasisinourconsolidatedstatementsofoperations.
StockbasedcompensationexpenserecognizedintheConsolidatedStatementsofOperationsforallperiodspresentedisbasedon
awards that are expected to vest less estimated forfeitures. We estimate the forfeiture rate of our stockbased awards based on an
analysisofactualforfeitures,employeeturnover,andotherfactors.Amodificationofthetermsofastockbasedawardistreatedasan
exchangeoftheoriginalawardforanewawardwithtotalcompensationcostequaltothegrantdatefairvalueoftheoriginalaward
plustheincrementalvalueofthemodificationtotheaward.
IncomeTaxes
We are subject to income taxes in the United States and numerous foreign jurisdictions. Deferred tax assets and liabilities are
determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the
enactedtaxratesandlawsthatwillbeineffectwhenthedeferredtaxassetorliabilityisexpectedtoberealizedorsettled.
In evaluating our ability to recover deferred tax assets, we consider all available positive and negative evidence, including
historicaloperatingresults,ongoingtaxplanning,andforecastsoffuturetaxableincomeonajurisdictionbyjurisdictionbasis.Based
onthelevelofhistoricallosses,wehaveestablishedavaluationallowancetoreduceournetdeferredtaxassetstotheamountthatis
morelikelythannottoberealized.
Werecognizeataxbenefitfromanuncertaintaxpositiononlyifitismorelikelythannotthatthetaxpositionwillbesustainedon
examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in our consolidated
financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being
realized.Werecognizeinterestandpenaltiesassociatedwithtaxmattersaspartoftheincometaxprovisionandincludeaccruedinterest
andpenaltieswiththerelatedincometaxliabilityonourconsolidatedbalancesheets.
CurrencyTranslationandRemeasurement
ThefunctionalcurrencyofthesubstantialmajorityofourforeignsubsidiariesistheU.S.dollar.Monetaryassetsandliabilities
denominatedinaforeigncurrencyareremeasuredintoU.S.dollarsattheexchangerateon

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thebalancesheetdate.Revenueandexpensesareremeasuredattheaverageexchangeratesduringtheperiod.Equitytransactionsand
othernonmonetaryassetsareremeasuredusinghistoricalexchangerates.Foreigncurrencytransactiongainsandlossesarerecordedin
otherincome(expense),netonourconsolidatedstatementofoperations.Forthoseforeignsubsidiarieswherethelocalcurrencyisthe
functional currency, adjustments to translate those statements into U.S. dollars are recorded in accumulated other comprehensive
income(loss)instockholdersequity.
CashandCashEquivalents
Cash and cash equivalents consist of highly liquid investments with original maturities of 90 days or less from the date of
purchase.
RestrictedCash
Wearerequiredtomaintainrestrictedcashdepositstobacklettersofcreditforcertainpropertyleases.Thesefundsarerestricted
andhavebeenclassifiedinotherassetsonourconsolidatedbalancesheetsduetothenatureofrestriction.AtDecember31,2015and
2016,wemaintainedrestrictedcashtotaling$6.2millionand$13.2million,respectively.
MarketableSecurities
WeholdinvestmentsinmarketablesecuritiesconsistingofU.S.governmentsecuritiesandU.S.governmentagencysecurities.We
classifyourmarketablesecuritiesasavailableforsaleinvestmentsinourcurrentassetsbecausetheyrepresentinvestmentsavailable
forcurrentoperations.Ouravailableforsaleinvestmentsarecarriedatfairvaluewithanyunrealizedgainsandlosses,netoftaxes,
included in accumulated other comprehensive (loss) income in stockholders equity. We determine gains or losses on the sale or
maturities of marketable securities using the specific identification method and these gains or losses are recorded in other income
(expense), net in our consolidated statements of operations. Unrealized losses are recorded in other income (expense), net when a
declineinfairvalueisdeterminedtobeotherthantemporary.
Inventory
Prepaid expenses and other current assets include our Spectacles inventory, which consists of finished goods purchased from
contract manufacturers. Inventory is stated at the lower of cost or market on a weightedaverage cost basis. Inventories are written
downforestimatedobsolescenceorexcessinventoryequaltothedifferencebetweenthecostofinventoryandestimatedmarketvalue.
Adjustmentstoreduceinventorytonetrealizablevaluearerecognizedincostofrevenue.
NonMarketableInvestments
Weaccountfornonmarketableinvestmentsunderthecostmethodwhenwearenotabletoexercisesignificantinfluenceoverthe
investee.Whenweexercisesignificantinfluenceover,butdonotcontroltheinvestee,suchnonmarketableinvestmentsareaccounted
forusingtheequitymethod.Undertheequitymethodofaccounting,werecordourshareoftheresultsoftheinvestmentswithinother
income(expense),netinourconsolidatedstatementsofoperations.
FairValueMeasurements
Certain financial instruments are required to be recorded at fair value. Other financial instruments, including cash and cash
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accountsreceivable,accountspayableandaccruedexpensesapproximatefairvaluebecauseoftheshorttermnatureofthesefinancial
instruments.
AccountsReceivableandAllowanceforDoubtfulAccounts
Accounts receivable are recorded at the invoiced amount less any allowance for doubtful accounts to reserve for potentially
uncollectible receivables. To determine the amount of the allowance, we make judgments about the creditworthiness of customers
basedonongoingcreditevaluationandhistoricalexperience.AtDecember31,2015and2016,theallowancefordoubtfulaccountswas
immaterial.
PropertyandEquipment
Propertyandequipmentarestatedatcost,lessaccumulateddepreciation.Wecomputedepreciationusingthestraightlinemethod
overtheestimatedusefullivesoftheassets,whichisgenerallythreeyearsforcomputerhardwareandsoftware,fiveyearsforfurniture
andequipment,andovertheshorterofleasetermorusefullifeoftheassetsforleaseholdimprovements.Buildingsaredepreciatedover
ausefulliferangingfrom25to45years.Maintenanceandrepairsareexpensedasincurred.
BuildtoSuitLeases
Wecapitalizeconstructioninprogressandrecordacorrespondinglongtermliabilityforbuildtosuitleaseagreementswherewe
areconsideredtheowner,foraccountingpurposes,duringtheconstructionperiod.Forbuildingsunderbuildtosuitleasearrangements
where we have taken occupancy, which do not qualify for sales recognition under the saleleaseback accounting guidance, we
determinedthatwecontinuetobethedeemedownerofthesebuildings.Thisisprincipallyduetooursignificantinvestmentintenant
improvements. As a result, the buildings are being depreciated over the shorter of their useful lives or the related lease term. At
occupancy, the longterm construction obligations are considered longterm finance lease obligations and are recorded as other
liabilities with amounts payable during the next 12 months recorded as accrued expenses and other current liabilities on the
consolidated balance sheets. Assets capitalized under buildtosuit leases were $16.3 million and $47.7 million as of December 31,
2015 and 2016, respectively. These assets were under construction and not yet placed in service as of December 31, 2015 and no
depreciationexpensewasrecordedintheyearendedDecember31,2015.Aportionoftheassetswereplacedintoserviceduringthe
yearendedDecember31,2016,resultinginanimmaterialamountofdepreciationexpense.
SoftwareDevelopmentCosts
Softwaredevelopmentcostsincludecoststodevelopsoftwaretobeusedtomeetinternalneedsandapplicationsusedtodeliver
ourservices.Wecapitalizedevelopmentcostsrelatedtothesesoftwareapplicationsoncethepreliminaryprojectstageiscompleteand
itisprobablethattheprojectwillbecompletedandthesoftwarewillbeusedtoperformthefunctionintended.Costscapitalizedfor
developingsuchsoftwareapplicationswerenotmaterialfortheperiodspresented.
Segments
Our CEO is our chief operating decision maker. Our CEO reviews financial information presented on a consolidated basis,
accompanied by disaggregated information about revenue by geographic region. There are no segment managers who are held
accountablebythechiefoperatingdecisionmakerforoperations,operatingresults,andplanningforlevelsorcomponentsbelowthe
consolidatedunitlevel.Wethereforehavedeterminedwehaveasingleoperatingsegment.

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BusinessCombinations
Weincludetheresultsofoperationsofthebusinessesthatweacquirefromthedateofacquisition.Wedeterminethefairvalueof
the assets acquired and liabilities assumed based on their estimated fair values as of the respective date of acquisition. The excess
purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Determining the fair value of assets
acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation
methodologies,estimatesoffuturerevenueandcashflows,discountratesandselectionofcomparablecompanies.Ourestimatesoffair
valuearebasedonassumptionsbelievedtobereasonable,butwhichareinherentlyuncertainandunpredictableand,asaresult,actual
resultsmaydifferfromestimates.Duringthemeasurementperiod,nottoexceedoneyearfromthedateofacquisition,wemayrecord
adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill. At the conclusion of the
measurementperiod,anysubsequentadjustmentsarereflectedintheconsolidatedstatementsofoperations.
Whenweissuepaymentsorgrantsofequitytosellingshareholdersinconnectionwithanacquisition,weevaluatewhetherthe
payments or awards are compensatory. This evaluation includes whether cash payments or stock award vesting is contingent on the
continuedemploymentofthesellingstockholderbeyondtheacquisitiondate.Ifcontinuedemploymentisrequiredforthecashtobe
paid or stock awards to vest, the award is treated as compensation for postacquisition services and is recognized as compensation
expense.
Transactioncostsassociatedwithbusinesscombinationsareexpensedasincurred,andareincludedingeneralandadministrative
expensesinourconsolidatedstatementsofoperations.
Goodwill
Goodwillrepresentstheexcessofthepurchasepriceoverthefairvalueofnetassetsacquiredinabusinesscombination.Wetest
goodwillforimpairmentatleastannually,inthefourthquarter,orwhenevereventsorchangesincircumstancesindicatethatgoodwill
mightbeimpaired.AtDecember31,2015and2016,wehadasingleoperatingsegmentandreportingunitstructure.
In testing for goodwill impairment, we first assess qualitative factors to determine whether the existence of events or
circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying
amount.If,afterassessingthetotalityofeventsorcircumstances,wedetermineitisnotmorelikelythannotthatthefairvalueofa
reportingunitislessthanitscarryingamount,thenadditionalimpairmenttestingisnotrequired.However,ifweconcludeotherwise,
weperformthefirstofatwostepimpairmenttest.
Thefirststepcomparestheestimatedfairvalueofareportingunittoitsbookvalue,includinggoodwill.Iftheestimatedfairvalue
exceedsbookvalue,goodwillisconsiderednottobeimpairedandnoadditionalstepsarenecessary.However,ifthefairvalueofthe
reportingunitislessthanbookvalue,thenunderthesecondstepthecarryingamountofthegoodwilliscomparedtoitsimpliedfair
value.Therewerenoimpairmentchargesinanyoftheperiodspresented.

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IntangibleAssets
Intangible assets are carried at cost and amortized on a straightline basis over their estimated useful lives. We determine the
appropriateusefullifeofourintangibleassetsbymeasuringtheexpectedcashflowsofacquiredassets.Theestimatedusefullivesof
intangibleassetsareasfollows:

IntangibleAsset

EstimatedUsefulLife
Domainnames 5Years
Trademarks 1to5Years
Noncompeteagreements 1to3Years
Acquireddevelopedtechnology 5to7Years
Customerrelationships 2Years
Patents 3to11Years
ImpairmentofLongLivedAssets
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
whetherthecarryingvalueoflonglivedassetsmaynotberecoverableinclude:significantchangesinperformancerelativetoexpected
operating results significant changes in asset use and significant negative industry or economic trends and changes in our business
strategy.Recoverabilityoftheseassetsismeasuredbycomparisonoftheircarryingamounttofutureundiscountedcashflowstobe
generated. If impairment is indicated based on a comparison of the assets carrying values and the undiscounted cash flows, the
impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. We
determinedthattherewerenoeventsorchangesincircumstancesthatindicatedourlonglivedassetswereimpairedduringanyofthe
periodspresented.
LegalContingencies
For legal contingencies, we accrue a liability for an estimated loss if the potential loss from any claim or legal proceeding is
considered probable, and the amount can be reasonably estimated. Note 8 provides additional information regarding our legal
contingencies.
RecentAccountingPronouncements
InJanuary2017,theFinancialAccountingStandardsBoard(FASB)issuedanAccountingStandardsUpdate(ASU)201701,
BusinessCombinations(Topic805)ClarifyingtheDefinitionofaBusiness.Theamendmentsinthisupdateclarifythedefinitionofa
business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as
acquisitionsordisposalsofassetsorbusinesses.Thedefinitionofabusinessaffectsmanyareasofaccountingincludingacquisitions,
disposals,goodwill,andconsolidation.TheguidanceiseffectiveforinterimandannualperiodsbeginningafterDecember15,2017and
shouldbeappliedprospectivelyonoraftertheeffectivedate.Weareintheprocessofevaluatingtheimpactofthisaccountingstandard
update.
In November 2016, the FASB issued ASU 201618, Statement of Cash Flows (Topic 230): Restricted Cash, which requires
restrictedcashtobepresentedwithcashandcashequivalentsonthestatementofcashflowsanddisclosureofhowthestatementof
cashflowsreconcilestothebalancesheetifrestrictedcashisshownseparatelyfromcashandcashequivalentsonthebalancesheet.
ASU201618iseffectiveforinterimandannualperiodsbeginningafterDecember15,2017,withearlyadoptionpermitted.Wearein
theprocessofevaluatingtheimpactofthisaccountingstandardupdateonourconsolidatedfinancialstatements.

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InOctober2016,theFASBissuedASU201616,IncomeTaxes(Topic740):IntraEntityTransferofAssetsOtherthanInventory,
whichrequirestherecognitionoftheincometaxconsequencesofanintraentitytransferofanasset,otherthaninventory,whenthe
transfer occurs. ASU 201616 is effective for interim and annual periods beginning after December 15, 2018, with early adoption
permitted. We have adopted ASU 201606 as of January 1, 2017 and do not expect the adoption to have a material impact on our
consolidatedfinancialstatements.
InAugust2016,theFASBissuedASU201615,StatementofCashFlows(Topic230),ClassificationofCertainCashReceipts
andCashPayments.ASU201615providesguidancefortargetedchangeswithrespecttohowcashreceiptsandcashpaymentsare
classifiedinthestatementsofcashflows,withtheobjectiveofreducingdiversityinpractice.ASU201615iseffectiveforinterimand
annualperiodsbeginningafterDecember15,2017,withearlyadoptionpermitted.Weareintheprocessofevaluatingtheimpactofthis
accountingstandardupdateonourconsolidatedstatementsofcashflows.
In March 2016, the FASB issued ASU 201609, Stock Compensation (Topic 718), Improvements to Employee ShareBased
Payment Accounting. ASU 201609, which amends several aspects of accounting for employee sharebased payment transactions
including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the
statement of cash flows. ASU 201609 is effective for fiscal years beginning after December 15, 2016 and interim periods within
annual periods beginning after December 15, 2016, with early adoption permitted. We early adopted ASU 201609 as of January 1,
2015.TheadoptionofASU201609didnothaveamaterialimpactonourfinancialstatements.
InFebruary2016,theFASBissuedASU201602,Leases(Topic842).ASU201602requireslesseestorecognizeleaseassetsand
leaseliabilitiesonthebalancesheetandrequiresexpandeddisclosuresaboutleasingarrangements.ASU201602iseffectiveforfiscal
yearsbeginningafterDecember15,2018andinterimperiodsinfiscalyearsbeginningafterDecember15,2018,withearlyadoption
permitted.Weareintheprocessofevaluatingtheimpactofthisaccountingstandardupdateonourconsolidatedfinancialstatements.
InNovember2015,theFASBissuedASU201517,BalanceSheetClassificationofDeferredTaxes.ASU201517requiresthat
alldeferredtaxassetsandliabilitiesbeclassifiedasnoncurrentonthebalancesheet.BeforetheissuanceofASU201517,deferredtax
assetsandliabilitieswererequiredtobepresentedascurrentandnoncurrent.ASU201517iseffectiveforannualperiodsinfiscal
yearsbeginningafterDecember15,2016andinterimperiodsinfiscalyearsbeginningafterDecember15,2016,withearlyadoption
permitted.In2015,weearlyadoptedASU201517.TheadoptionofASU201517didnothaveamaterialimpactonourconsolidated
financialstatements.
InSeptember2015,theFASBissuedASU201516,BusinessCombinations,SimplifyingtheAccountingforMeasurementPeriod
Adjustments(Topic805).Theamendmentsinthisupdateeliminatetherequirementthatanacquirerinabusinesscombinationaccount
formeasurementperiodadjustmentsretrospectively.Instead,anacquirerwillrecognizeameasurementperiodadjustmentduringthe
periodinwhichitdeterminestheamountoftheadjustment.TheASUiseffectiveininterimperiodswithinfiscalyearsbeginningafter
December15,2015.WeadoptedthisstandardasofJanuary1,2016.Therewasnoimpacttoouradoptionofthisstandard.
InJuly2015,theFASBissuedASU201522,Inventory(Topic330)SimplifyingtheMeasurementofInventory.Theamendments
inthisupdatemodifythemeasurementprincipleforinventoryfromlowerofcostormarketvaluetolowerofcostandnetrealizable
value.TheASUdefinesnetrealizablevalueastheestimatedsellingpriceintheordinarycourseofbusiness,lessreasonablypredictable
costsofcompletion,disposal,andtransportation.TheASUisapplicabletoinventorythatisaccountedforundertheweightedaverage
costbasisandiseffectiveforfiscalyearsbeginningafterDecember15,2016,withearlyadoptionpermitted.Weearly

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adoptedthestandardinthethirdquarterof2016anditdidnothaveamaterialimpactonourconsolidatedfinancialstatements.
InApril2015,theFASBissuedASU201505,IntangiblesGoodwillandOtherInternalUseSoftware(Subtopic35040),
Customers Accounting for Fees Paid in a Cloud Computing Arrangement to increase the consistency of accounting for cloud
computingarrangementsamongreportingentities.Thereportingentitymustconsiderwhetheracloudcomputingarrangementincludes
asoftwarelicense.Ifthearrangementdoesnotincludeasoftwarelicense,theentityshouldaccountforthearrangementasaservice
contract.Ifthearrangementincludesasoftwarelicense,theentityshouldaccountforthesoftwarelicenseelementofthearrangement
consistent with the acquisition of other licenses of intangible assets. The guidance is effective for the fiscal years beginning after
December15,2015andforinterimperiodsinfiscalyearsbeginningafterDecember15,2015.TheadoptionofASU201505didnot
haveamaterialimpactonourconsolidatedfinancialstatements.
InApril2015,theFASBissuedASU201503,InterestImputationofInterest,SimplifyingthePresentationofDebtIssuanceCosts
(Topic83530).Theamendmentrequiresdebtissuancecostsrelatedtoarecognizeddebtliabilitytobepresentedonthebalancesheet
asadirectdeductionfromthedebtliabilityratherthanasanasset.TheASUdidnotaddressthepresentationofcostsofobtaininga
revolvinglineofcredit.IntheJune2015meetingoftheEmergingIssuesTaskForce,theSECstaffclarifieditwouldnotobjecttoan
entitypresentingthecostofsecuringarevolvinglineofcreditasanasset,regardlessofwhetherabalanceisoutstanding.TheASUis
effectiveforfiscalyearsbeginningafterDecember15,2015.Weadoptedthisstandardandapolicythatthecostofsecuringarevolving
lineofcreditwillberecordedasanassetonJanuary1,2016.Theadoptionofthisstandarddidnotimpactourconsolidatedfinancial
statements.
InFebruary2015,theFASBissuedASU201502,Consolidation(Topic810),AmendmentstotheConsolidationAnalysis.ASU
201502 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal
entities.This amendment is effective for fiscal years beginning after December 15, 2015 and for interim periods within fiscal years
beginning after December 15, 2015, with early adoption permitted. We adopted this standard in the first quarter of 2016 on a
retrospectivebasis.TheadoptionofASU201502didnothaveamaterialimpactonourconsolidatedfinancialstatements.
In May 2014, the FASB issued ASU 201409, Revenue from Contracts with Customers (Topic 606). Topic 606 supersedes the
revenue recognition requirements in ASU Topic 605, RevenueRecognition, and requires the recognition of revenue when promised
goodsorservicesaretransferredtocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledtoin
exchange for those goods or services. Topic 606 is effective for fiscal years beginning after December 15, 2017, including interim
periods within that reporting period, with early adoption permitted for annual reporting periods beginning after December 15, 2016.
Thestandardpermitstheuseofeithertheretrospectiveormodifiedretrospective(cumulativeeffect)transitionmethod.
ThemostsignificantaspectofourevaluationofTopic606relatedtoASUNo.201608,RevenuefromContractswithCustomers
(Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This implementation guidance discusses
principalversusagentconsiderationsandgrossversusnetrevenuereporting,includingspecificindicatorstoassistinthedetermination
ofwhetherwecontrolaspecifiedgoodorservicebeforeitistransferredtothecustomer.Throughourevaluation,wehaveconcluded
Snapsoldrevenuewillbereportedonagrossbasisandpartnersoldrevenuewillbereportedonanetbasis,whichisconsistentwith
ourcurrentrevenuerecognitionpolicies.WeconcludedthatwecontroltheSnapsoldadvertisingcampaignbeforeitistransferredto
the customer because we provide the advertising campaign on Snapchat and have discretion in establishing the price of the
advertisements. We concluded that the partner controls significant aspects of the partnersold advertising campaign before it is
transferredtothecustomerandthepartnerhasdiscretioninestablishingpricewiththeadvertiser.

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Wedonotexpectthenewstandardtohaveamaterialimpactonourconsolidatedfinancialstatements.WeexpecttoadoptTopic
606 during the first quarter of 2018. We are still evaluating the use of either the retrospective or modified retrospective transition
method.
2.PropertyandEquipment,Net
Propertyandequipment,net,consistedofthefollowing:

AsofDecember31,
2015 2016
(inthousands)
Computerhardwareandsoftware $15,055 $ 22,606

Buildings 5,520 36,854
Leaseholdimprovements 2,519 13,166
Land 4,630 4,630
Furnitureandequipment 3,358 20,349
Constructioninprogress 19,724 20,790

Total 50,806 118,395

Less:accumulateddepreciationandamortization (6,727) (17,810)

Propertyandequipment,net $44,079 $100,585

Depreciation and amortization expense on property and equipment was $5.8 million and $12.9 million for the years ended
December31,2015and2016,respectively.
3.GoodwillandIntangibleAssets
ThechangesinthecarryingamountofgoodwillfortheyearsendedDecember31,2015and2016wereasfollows:

Goodwill
(inthousands)
BalanceasofJanuary1,2015 $ 69,511
Goodwillacquired

64,433

BalanceasofDecember31,2015

133,944

Goodwillacquired 186,763
Foreigncurrencytranslation

(1,570)

BalanceasofDecember31,2016 $ 319,137

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Intangibleassetsconsistedofthefollowing:

December31,2015
Weighted
Average
Remaining Gross
Useful carrying Accumulated
LifeYears Amount Amortization Net
(inthousandsexceptyears)
Domainnames 3.8$ 5,000$ 1,167$ 3,833

Trademarks 3.5 2,862 1,310 1,552
Noncompeteagreements 1.2 243 159 84
Acquireddevelopedtechnology 3.9 36,298 8,598 27,700
Customerrelationships 1.3 2,200 825 1,375
Patents

10.5 9,100

414 8,686

$55,703$
12,473$43,230

December31,2016
Weighted
Average
Remaining Gross
Useful carrying Accumulated
LifeYears Amount Amortization Net
(inthousandsexceptyears)
Domainnames 3.0$ 5,000$ 2,157$ 2,843
Trademarks 2.6 3,072 1,829 1,243
Noncompeteagreements 0.3 243 226 17
Acquireddevelopedtechnology 4.1 83,137 20,569 62,568
Customerrelationships 1.0 3,752 2,569 1,183
Patents

9.2 9,450

1,322 8,128

$104,654$
28,672$75,982

Amortization of intangible assets for the years ended December 31, 2015 and 2016 was $9.5 million and $16.2 million,
respectively.
As of December 31, 2016, the estimated intangible asset amortization expense for the next five years and thereafter was as
follows:

Estimated
Amortization
(inthousands)
YearendingDecember31,
2017 $ 19,902
2018 18,947
2019 16,148
2020 10,922
2021 5,364
Thereafter

4,699

Total $ 75,982

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4.BalanceSheetComponents
AccruedexpensesandothercurrentliabilitiesatDecember31,2015and2016consistedofthefollowing:

AsofDecember31,
2015 2016
(inthousands)
Legalsettlementpayable $107,500$
Accruedinfrastructurecosts 14,848 43,529
Accruedcompensationandrelatedexpenses 7,657 23,447
Partnerrevenueshareliability 6,620 22,821
Accruedprofessionalfees 2,365 11,157
Accruedtaxliability 1,064 9,252
Acquisitionpurchaseconsiderationliability 6,000
Other 15,502 32,119

Totalaccruedexpensesandothercurrentliabilities $155,556$148,325

OtherliabilitiesatDecember31,2015and2016consistedofthefollowing:

AsofDecember31,
2015 2016
(inthousands)
Buildtosuitfinancingobligations $13,494$15,140
Acquisitionpurchaseconsiderationliability 15,944
Other 5,039 16,050

Totalotherliabilities $18,533$47,134

5.LongTermDebt
InJuly2016,weenteredintoafiveyearseniorunsecuredrevolvingcreditfacility,ortheCreditFacility,withlenders,someof
whichareaffiliatedwithcertainmembersofourunderwritingsyndicate,thatallowsustoborrowupto$1.1billiontofundworking
capitalandgeneralcorporatepurposeexpenditures.TheloanbearsinterestatLIBORplus0.75%,aswellasanannualcommitmentfee
of 0.10% on the daily undrawn balance of the facility. No origination fees were incurred at the closing of the Credit Facility. Any
amounts outstanding under this facility will be due and payable in July 2021. In December 2016, the amount we are permitted to
borrowundertheCreditFacilitywasincreasedto$1.2billion.AsofDecember31,2016,noamountswereoutstandingundertheCredit
Facility.

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6.GeographicInformation
Revenue by geography is based on the billing address of the advertiser. The following tables list revenue and property and
equipment,netbygeographicarea:

YearEnded
December31,
2015 2016
(inthousands)
Revenue:
UnitedStates $56,253$355,252
Restoftheworld(1) 2,410 49,230

Totalrevenue $58,663$404,482
(1) Noindividualcountryexceeded10%ofourtotalrevenueforanyperiodpresented.

AsofDecember31,
2015 2016
(inthousands)
Propertyandequipment,net:
UnitedStates $44,057$ 98,254
Restoftheworld

22 2,331

Totalpropertyandequipment,net $44,079$100,585

7.IncomeTaxes
Thedomesticandforeigncomponentsofpretaxlosswereasfollows:

2015 2016
(inthousands)
Domestic $(380,216) $(520,482)

Foreign

(266) (1,241)

Lossbeforeincometaxes $(380,482) $(521,723)

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Thecomponentsofourincometax(benefit)expensewereasfollows:

YearEnded
December31,
2015 2016
(inthousands)
Current:
Federal $ $
State 3 3
Foreign

108

869
Totalcurrentincometax(benefit)expense

111

872
Deferred:
Federal (7,141) (6,364)
State (559) (780)
Foreign

(808)

Totaldeferredincometax(benefit)expense

(7,700)

(7,952)

Incometax(benefit)expense $(7,589)
$(7,080)

Thefollowingisareconciliationofthestatutoryfederalincometaxratetooureffectivetaxrate:

YearEnded
December31,
2015 2016
Taxbenefit(expense)computedatthefederalstatutoryrate 34.0% 34.0%
Statetaxbenefit(expense),netoffederalbenefit 2.3 1.3
Changeinvaluationallowance (31.0) (34.6)
Stockbasedcompensationbenefit(expense) (4.2) (0.4)
Research&developmentcreditbenefit 0.5 1.2
Otherbenefits(expenses)

0.4

(0.1)

Totalincometaxbenefit(expense) 2.0%
1.4%

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Thesignificantcomponentsofnetdeferredtaxbalanceswereasfollows:

2015 2016
(inthousands)
Deferredtaxassets:
Accruedexpenses $ 7,596 $ 10,864
Deferredrevenue 1,498 1,900
Intangibleassets 24,089
Stockbasedcompensation 17,344 21,111
Netoperatinglosses 144,591 33,276
Taxcreditcarryforwards 1,941 15,854
Other

335

1,469

Totaldeferredtaxassets $ 173,305 $ 108,563

Deferredtaxliabilities:
Intangibleassets $ (7,340) $
Propertyandequipment

(879)

(167)

Totaldeferredtaxliabilities (8,219) (167)

Totalnetdeferredtaxassets 165,086 108,396
Valuationallowance

(165,086)

(108,872)

Netdeferredtaxes $
$ (476)

Incometaxbenefitwas$7.6millionand$7.1millionfortheyearsendedDecember31,2015and2016,respectively.Theeffective
incometaxratewas2.0%and1.4%fortheyearsendedDecember31,2015and2016,respectively.Theincometaxbenefitsforthe
yearsendedDecember31,2015and2016wereprimarilyduetodiscretetaxbenefitsof$7.7millionand$7.1million,respectively,asa
resultofpartialreleasesofvaluationallowancesagainstnetdeferredtaxassetsrelatedtoacquisitions.Thenetdeferredtaxliabilities
originatingfromacquisitionsduringtheperiodswereconsideredasanavailablesourceofincometorealizeaportionofourdeferred
taxassets.
As of December 31, 2016, we had accumulated federal and state net operating loss carryforwards of $73.7 million and
$146.3million,respectively.Thefederalandstatenetoperatinglosscarryforwardswillbegintoexpirein2031and2026,respectively.
AsofDecember31,2016,wehadaccumulatedfederalandstateresearchtaxcreditsof$11.2millionand$7.0million,respectively.
Thefederalresearchtaxcreditswillbegintoexpirein2032.Thestateresearchtaxcreditdoesnotexpire.
AvailablenetoperatinglossesmaybesubjecttoannuallimitationsduetoownershipchangelimitationsprovidedbytheInternal
RevenueCodeof1986,asamended(Code),andsimilarstateprovisions.UnderSection382oftheCode,substantialchangesinour
ownershipandtheownershipofacquiredcompaniesmaylimittheamountofnetoperatinglosscarryforwardsthatareavailableto
offsettaxableincome.Theannuallimitationwouldnotautomaticallyresultinthelossofnetoperatinglosscarryforwardsbutmay
limittheamountavailableinanygivenfutureperiod.Additionallimitationsontheuseofthesetaxattributescouldoccurintheevent
ofpossibledisputesarisinginexaminationfromvarioustaxingauthorities.
Werecognizevaluationallowancesondeferredtaxassetsifitismorelikelythannotthatsomeorallofthedeferredtaxassets
willnotberealized.Wehadvaluationallowancesagainstnetdeferredtaxassetsof$165.1millionand$108.9millionasofDecember
31,2015and2016,respectively.

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AsofDecember31,2016,wehadanimmaterialamountofunremittedearningsrelatedtocertainforeignsubsidiariesthatwere
indefinitely reinvested. Since these unremitted earnings have been indefinitely reinvested, deferred taxes were not provided. The
unrecognizeddeferredtaxliabilityassociatedwiththeseunremittedearningsisimmaterial.
As of December 31, 2015, we did not have a liability for unrecognized tax benefits. As of December 31, 2016, the gross
unrecognizedtaxbenefitwas$243.9millionandresultedfromadditionsrelatedtocurrentyeartaxpositions.Substantiallyallofthe
unrecognizedtaxbenefitwasrecordedasareductioninourgrossdeferredtaxassets,offsetbyareductioninourvaluationallowance.
We have a net unrecognized tax benefit of $3.6 million that is included in other liabilities on our consolidated balance sheet as of
December 31, 2016. Assuming there continues to be a valuation allowance against deferred tax assets in future periods when gross
unrecognizedtaxbenefitsarerealized,thiswouldresultinataxbenefitof$3.6millionwithinourprovisionofincometaxesatsuch
time.
Our policy is to recognize interest and penalties associated with tax matters as part of the income tax provision and include
accruedinterestandpenaltieswiththerelatedincometaxliabilityonourconsolidatedbalancesheet.Fortheperiodspresented,there
arenomaterialinterestandpenaltiesassociatedwithunrecognizedtaxbenefitsrecordedinourconsolidatedstatementofoperationsor
balancesheet.AnychangestounrecognizedtaxbenefitsrecordedasofDecember31,2016thatarereasonablypossibletooccurwithin
thenext12monthsarenotexpectedtobematerial.
The income taxes we pay are subject to review by taxing jurisdictions globally. Our estimate of the potential outcome of any
uncertaintaxpositionissubjecttomanagementsassessmentofrelevantrisks,facts,andcircumstancesexistingatthattime.Webelieve
thatourestimatehasadequatelyprovidedforthesematters.However,ourfutureresultsmayincludeadjustmentstoestimatesinthe
periodtheauditsareresolved,whichmayimpactoureffectivetaxrate.
TaxyearsendingonorafterDecember31,2012aresubjecttoexaminationbyfederal,state,andvariousforeignjurisdictions.
8.CommitmentsandContingencies
Commitments
Leases
Weenterintovariousnoncancelableleaseagreementsforcertainofourofficeswithoriginalleaseperiodsexpiringbetween2016
and2026.Certainofthearrangementshavefreerentperiodsorescalatingrentpaymentprovisions.Werecognizerentexpenseunder
sucharrangementsonastraightlinebasis.

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OurfutureminimumleasepaymentsrequiredunderthesenoncancelableoperatingleaseobligationsasofDecember31,2016,
wereasfollows:

Operating
Leases
(inthousands)
2017 $ 32,631
2018 39,769
2019 49,332
2020 50,546
2021 49,921
Thereafter

157,298

Totalminimumleasepayments $ 379,497

OperatingleaseexpensesfortheyearsendedDecember31,2015and2016were$11.3millionand$26.9million,respectively.
We have several lease agreements where we are deemed the owner under buildtosuit lease accounting. The fair value of the
leasedpropertyandcorrespondingfinancingobligationsareincludedinpropertyandequipment,netandotherliabilities,respectively,
on our consolidated balance sheet as of December 31, 2016. Our future minimum lease payments required under noncancelable
financingleaseobligations,whichexclusivelyrelatetoourbuildtosuitleases,asofDecember31,2016,wereasfollows:

Financing
Leases
(inthousands)
2017 $ 4,659
2018 4,726
2019 4,796
2020 4,947
2021 5,092
Thereafter

22,104

Totalminimumleasepayments $ 46,324

Werecognizeanincreaseinthefairvalueoftheassetasadditionalbuildingcostsareincurredduringtheconstructionperiodand
acorrespondingincreaseintheleasefinancingobligationforanyconstructioncoststobereimbursedbythelandlord.AsofDecember
31,2016,$15.1millionofleasefinancingobligationsisincludedinotherliabilitiesonourconsolidatedbalancesheet.

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ContractualCommitments
We have a noncancelable contractual agreement related to the hosting of our data storage processing, storage, and other
computingservices.Wealsohavevariousothernoncancelablecontractualcommitmentsrelatedtopurchaseagreements.Thefuture
minimumcontractualcommitmentsincludingcommitmentslessthanoneyear,asofDecember31,2016ofeachofthenextthreeyears
wereasfollows:

Minimum
Commitment
(inthousands)
2017 $ 105,073
2018 12,989
2019

2,869

Totalminimumcommitments $ 120,931

Contingencies
Werecordalosscontingencywhenitisprobablethatanassethasbeenimpairedoraliabilityhasbeenincurredandtheamountof
thelosscanbereasonablyestimated.Wealsodisclosematerialcontingencieswhenwebelievealossisnotprobablebutreasonably
possible. Accounting for contingencies requires us to use judgment related to both the likelihood of a loss and the estimate of the
amountorrangeofloss.Manylegalandtaxcontingenciescantakeyearstoberesolved.
PendingMatters
InSeptember2014,twoindividualsfiledalawsuitagainstusandourtwofoundersintheSuperiorCourtofCaliforniaforLos
AngelesCounty.Thecomplaintallegestwocausesofactioncommonlawrightofpublicityandstatutoryrightofpublicitybasedon
allegations that the defendants improperly used the plaintiffs images in promoting Snapchat for Android. The complaint seeks
unspecifiedcompensatoryandpunitivedamages,attorneysfees,andcosts.Thematteriscurrentlyinactivediscovery.Webelievethat
thelawsuitiswithoutmeritandintendtocontinuetovigorouslydefendourselvesinthismatter.Basedonthepreliminarynatureofthe
proceedingsinthiscase,theoutcomeofthislegalproceedingremainsuncertain.
InApril2016,anindividualfiledalawsuitagainstusandanotherindividualafterhewasinjuredinacaraccident.Theplaintiff
allegesthatweareliablebecausetheotherindividualwassupposedlyusingourspeedfilteratthetimeofthecollision.InJanuary
2017,thecourtdismissedtheclaimagainstus.
Theoutcomesofourlegalproceedingsareinherentlyunpredictable,subjecttosignificantuncertainties,andcouldbematerialto
ourfinancialcondition,resultsofoperations,andcashflowsforaparticularperiod.Forthependingmattersdescribedabove,itisnot
possibletoestimatethereasonablypossiblelossorrangeofloss.
We are subject to various other legal proceedings and claims in the ordinary course of business, including certain patent and
privacymatters.Althoughoccasionaladversedecisionsorsettlementsmayoccur,wedonotbelievethatthefinaldispositionofanyof
ourotherpendingmatterswillseriouslyharmourbusiness,financialcondition,resultsofoperations,andcashflows.
Settlement
InFebruary2013,anindividualfiledanactionagainstus,ourpredecessorentityandtwoofourofficersinLosAngelesSuperior
Court,allegingthatwewereusingcertainintellectualpropertythattheindividualjointly

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ownedwithourfounders.InSeptember2014,thepartiesenteredintoasettlementagreementthatresolvedallclaimsamongtheparties.
Undertheagreement,weagreedtopaytheindividualatotalof$157.5millionandsuchamountswererecordedin2014.Wepaidthe
individual $50.0 million in 2014. As of December 31, 2015, $107.5 million was included in accrued expenses and other current
liabilitiesontheconsolidatedbalancesheet.Wepaidtheindividual$107.5millionintheyearendedDecember31,2016.Thereareno
furtheramountsrequiredtobepaidinthefuture.
Indemnifications
Intheordinarycourseofbusiness,wemayprovideindemnificationsofvaryingscopeandtermstocustomers,vendors,lessors,
investors,directors,officers,employees,andotherpartieswithrespecttocertainmatters.Indemnificationmayincludelossesfromour
breachofsuchagreements,servicesweprovide,orthirdpartyintellectualpropertyinfringementclaims.Theseindemnificationsmay
surviveterminationoftheunderlyingagreementandthemaximumpotentialamountoffutureindemnificationpaymentsmaynotbe
subject to a cap. We have not incurred material costs to defend lawsuits or settle claims related to these indemnifications as of
December31,2015and2016.Webelievethefairvalueoftheseliabilitiesisimmaterialandaccordinglyhavenoliabilitiesrecordedfor
theseagreementsatDecember31,2015and2016.
9.StockholdersEquity
CommonStock
ClassAcommonstockhasnovotingrightsandClassBcommonstockisentitledtoonevotepershare.Anydividendspaidtothe
holdersoftheClassAcommonstockandClassBcommonstockwillbepaidonaproratabasis.Onaliquidationevent,asdefinedin
our amended and restated certificate of incorporation, after payments are made to the series preferred stock that have liquidation
preferences,anydistributiontocommonstockholdersismadeonaproratabasistotheholdersoftheClassAcommonstock,ClassB
commonstock,andtheseriesofpreferredstockthathavenoliquidationpreferences,onanasconvertedbasis.

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ConvertiblePreferredStock
PreferredstockconsistedofthefollowingasofDecember31,2015and2016:

AsofDecember31,
2015 2016
Shares Shares Liquidation Shares Shares Liquidation
Authorized Outstanding Preference Authorized Outstanding Preference
(inthousands)
Seriesofpreferredstockwithliquidationpreferences:
SeriesA,convertiblevotingpreferredstock 70,289 70,289 $ 14,656 70,289 70,289 $ 14,656
SeriesA1,convertiblevotingpreferredstock 35,741 35,741 519 35,741 35,741 519
SeriesB,convertiblevotingpreferredstock 40,932 40,932 80,000 40,932 40,932 80,000
SeriesC,convertiblenonvotingpreferredstock

16,000 16,000

54,543

16,000 16,000

54,543

162,962 162,962 $

149,718

162,962 162,962 $

149,718

Seriesofpreferredstockwithnoliquidationpreferences:
SeriesD,convertiblenonvotingpreferredstock 3,369 3,369 $ 3,369 3,369 $
SeriesE,convertiblenonvotingpreferredstock 19,982 19,982 19,982 19,982
SeriesF,convertiblenonvotingpreferredstock 33,000 21,204 60,500 60,500
SeriesFP,convertiblevotingpreferredstock

217,767 217,767

260,889 215,888

274,118 262,322 $

344,740 299,739 $

Ourpreferredstockhasthefollowingrightsandpreferences:
Dividends
Inpreferencetotheholdersofourcommonstock,eachshareofpreferredstockisentitledtoreceive,onaparipassubasis,cash
dividendsattherateof6%oftheoriginalissuepriceperannumoneachoutstandingshareofpreferredstock.Suchdividendsarenon
cumulativeandpayableonlywhenandifdeclaredbyourboardofdirectors.Theoriginalissuepricepershareforthepurposesofthe
dividends and liquidation preferences described herein is $0.208515 for Series A, $0.01453 for Series A1, $1.95445 for Series B,
$3.40893forSeriesC,$0.001forSeriesD,$0.001forSeriesE,$0.001forSeriesF,and$0.000020835forSeriesFP.
IntheeventdividendsarepaidonanyshareofcommonstockorSeriesFP,wearerequiredtopayanadditionaldividendonall
outstandingsharesofSeriesA,SeriesA1,SeriesB,SeriesC,SeriesD,SeriesE,andSeriesF,atapershareamountequalto(onanas
ifconvertedtocommonstockbasis)theamountpaidorsetasideforeachshareofcommonstockorSeriesFP.
WehavenotdeclaredorpaidanycashdividendsonourcommonorpreferredstockthroughDecember31,2016.

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Liquidation
A liquidation event (Liquidation Event) is a voluntary or involuntary liquidation, dissolution, or windingup of Snap Inc.
Deemed liquidation events (Deemed Liquidation Events) include any change in control, or sale, lease, exclusive license, or other
dispositionofallorsubstantiallyallofourassets.IntheeventofaLiquidationEventoraDeemedLiquidationEvent,theSeriesA,
Series A1, Series B, and Series C are entitled to be paid an amount per share equal to its respective original issue price plus all
declaredandunpaiddividends,beforeanydistributionsorpaymentsaremadetoholdersoftheSeriesD,SeriesE,SeriesF,orSeries
FP,onanasconvertedbasis,orCommonStock.Ifassetslegallyavailablefordistributionareinsufficienttopaythefullliquidation
preferenceamountsoftheSeriesA,SeriesA1,SeriesB,andSeriesC,thentheremainingassetsaredistributedratablyinproportionto
theamountstheywouldhavebeenentitledtoreceive.
AfterpaymentofthefullliquidationpreferenceoftheSeriesA,SeriesA1,SeriesB,andSeriesC,theentireremainingamounts
legallyavailablefordistributionwillbedistributedtotheholdersofourcommonstockproratabasedonthenumberofsharesheldby
eachholder.TheliquidationpreferenceforSeriesA,SeriesA1,SeriesB,andSeriesCisbasedontheoriginalissuepricepershare.
TheSeriesD,SeriesE,SeriesF,andSeriesFPareentitledtoshareinanyremainingassets,afterpaymenttotheSeriesA,SeriesA1,
Series B, and Series C, together with the outstanding common stock, to the extent that they convert to common stock immediately
beforeaLiquidationEvent.
Voting
TheholdersoftheSeriesA,SeriesA1,andSeriesBareentitledtoonevotepershare.TheholdersoftheSeriesFPareentitledto
ten votes per share. The Series C, Series D, Series E, and Series F are nonvoting, except as required by law. The consent of the
majorityoftheSeriesA,SeriesA1,SeriesB,andSeriesC,eachasaseparatevotingclass,isrequiredtoamend,repealorchangeour
amendedandrestatedcertificateofincorporationtotheextentthatsuchamendmentadverselyaffectstheSeriesA,SeriesA1,Series
B,orSeriesCholders,respectively,ortoincreaseordecreasethenumberofauthorizedsharesofSeriesA,SeriesA1,SeriesB,or
Series C, respectively. The consent of the majority of the Series FP is required to authorize any new class or series of stock or
convertiblesecuritiesrankingseniortotheSeriesFPinvotingrights.
Conversion
EachshareofSeriesA,SeriesA1,andSeriesBisconvertibleattheholdersoptionatanytimeintosharesofClassBcommon
stock. The Series C, Series D, Series E, Series F, and Series FP are only convertible at the holders option immediately before a
LiquidationEventorontheeffectivedateoftheregistrationstatementinconnectionwithaqualifyinginitialpublicoffering.TheSeries
A,SeriesA1,SeriesB,SeriesC,SeriesD,SeriesE,andSeriesFconverttoClassBcommonstockatthetheneffectiveconversion
rate subject to adjustment in the event of stocksplits, stock dividends, and certain antidilutive issuances of shares of our common
stock.
EachshareofSeriesA,SeriesA1,SeriesB,SeriesC,SeriesD,SeriesE,andSeriesFwillautomaticallyconvertintosharesof
ClassBcommonstockatthetheneffectiveconversionrate,onthevoteoftheholdersofamajorityoftheoutstandingsharesofthe
SeriesA,SeriesA1,andSeriesB(collectively,theVotingPreferred),orimmediatelyontheclosingofafirmlyunderwrittenpublic
offeringunderaneffectiveregistrationstatementundertheSecuritiesActof1933,asamended,coveringtheofferandsaleofourClass
Acommonstockinwhich(i)thegrosscashproceedstous(beforeunderwritingdiscounts,commissionsandfees)areatleast$25.0
million and (ii) our shares have been listed for trading on the New York Stock Exchange, NASDAQ Global Select Market, or
NASDAQGlobalMarketoranysuccessormarketsorexchanges(aqualifyinginitialpublicoffering).Onsuchautomaticconversion,
anydeclaredandunpaiddividendsarepayable.Therehavebeennocashdividendsdeclaredsinceinception.

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The Series FP automatically converts to Class B common stock on the affirmative election of the holders of a majority of the
outstanding shares of the Series FP. In any transfer of shares of Series FP from the original holder, the shares of Series FP will
automaticallyconverttosharesofClassBcommonstockatthetheneffectiveconversionrate.SeriesFPstockholdersmaysellshares
ofSeriesFPinconnectionwithanequityfinancingbyus.AnySeriesFPsoldinsuchfinancingwillautomaticallyconvertintothe
seriesofpreferredstocksoldintheequityfinancingatthetheneffectiveSeriesFPpreferredstockconversionrate,providedthatthe
saleofsuchsharesofSeriesFPpreferredstockareforthesamepriceasthepreferredsharessoldintheequityfinancing.
AmendmentstoCertificateofIncorporation
On October 26, 2016, our board of directors approved an amended and restated certificate of incorporation that created a new
classofcommonstock,ClassCcommonstock.Theamendedandrestatedcertificateofincorporationauthorized260,887,848sharesof
ClassCcommonstock.TherightsoftheholdersofClassCcommonstockareidenticaltothoseofClassAcommonstockandClassB
commonstock,exceptwithrespecttovotingrights.EachshareofClassCcommonstockisentitledtotenvotespershare.Therightsof
theholdersofClassAcommonstockandClassBcommonstockdidnotchange.Accordingly,ClassAcommonstockhasnovoting
rightsandClassBcommonstockisentitledtoonevotepershare.NosharesofClassCcommonstockhavebeenissuedtodate.The
SeriesFPwillautomaticallyconverttoClassCcommonstockimmediatelyontheclosingofaqualifyinginitialpublicoffering.
Our amended and restated certificate of incorporation, as well as Delaware law, provide stockholders with certain rights to
preclude amendments to our amended and restated certificate of incorporation that would adversely alters the rights, powers, or
preferences of a given class of stock compared to other classes. Any amendments to our amended and restated certificate of
incorporation must be approved by the class of stock adversely affected by the proposed amendment. In addition, as provided by
Delawarelaw,beforeanyamendmentmaybeputtoastockholdervote,itmustbeapprovedbytheboardofdirectors.
Followingthedateofaqualifyinginitialpublicoffering,sharesofClassCcommonstockwillconverttoClassBcommonstock
when such holder holds less than 30% of the Class C common stock held by such holder on the date of a qualifying initial public
offering.OncetherearenosharesofClassCcommonstockoutstanding,allsharesofClassBcommonstockwillconverttoClassA
commonstock,andallClassAcommonstockwillhaveonevotepershare.
10.NonMarketableInvestments
Weheldinvestmentsinprivatelyheldcompanieswithacarryingvalueof$9.1millionand$11.8millionasofDecember31,2015
and2016,respectively.Ourshareoflossesinequitymethodinvestmentswasanetlossof$0.5millionand$3.9millionfortheyears
endedDecember31,2015and2016,respectively,whichisincludedinotherincome(expense),netinourconsolidatedstatementsof
operations. Nonmarketable investments are included within other assets on the consolidated balance sheet. Such investments are
reviewedperiodicallyforimpairments.NoimpairmentswererecordedintheyearsendedDecember31,2015and2016.
11.FairValueMeasurements
Assetsandliabilitiesmeasuredatfairvalueareclassifiedintothefollowingcategories:

Level1:Quotedmarketpricesinactivemarketsforidenticalassetsorliabilities.

Level2:Observablemarketbasedinputsorunobservableinputsthatarecorroboratedbymarketdata.

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Level3:Unobservableinputsreflectingthereportingentitysownassumptionsorexternalinputsfrominactivemarkets.
We classify our marketable securities within Level 1 because we use quoted market prices to determine their fair value. We
recognizetransfersbetweenlevelswithinthefairvaluehierarchy,ifany,attheendofeachperiod.Therewerenotransfersbetween
levelsduringtheperiodspresented.
ThefollowingtablesetsforthourfinancialassetsasofDecember31,2015and2016thataremeasuredatfairvalueonarecurring
basisduringtheperiod:

FairValue
December31,
2015 2016
(inthousands)
Cashandcashequivalents
Cash $640,810$150,121
U.S.governmentsecurities
U.S.governmentagencysecurities

Totalcashandcashequivalents $640,810$150,121

Marketablesecurities
U.S.governmentsecurities $ $505,333
U.S.governmentagencysecurities

331,914

Totalmarketablesecurities $ $837,247

Gross unrealized gains and losses for cash equivalents and marketable securities as of December 31, 2015 and 2016 were not
material.TheamortizedcostofU.S.governmentsecuritieswithmaturitieslessthanoneyearwas$502.4millionasofDecember31,
2016. The amortized cost of U.S. government securities with maturities between one and five years was $3.0 million as of
December31,2016.TheamortizedcostofU.S.governmentagencysecuritieswithmaturitiesoflessthanayearwas$284.7millionas
of December 31, 2016. The amortized cost of U.S. government agency securities with maturities between one and five years was
$47.2millionasofDecember31,2016.
12.AccumulatedOtherComprehensiveIncome(Loss)
The table below presents the changes in accumulated other comprehensive income (loss) (AOCI) by component and the
reclassificationsoutofAOCI:

ChangesinAccumulatedOther
ComprehensiveIncome(Loss)
byComponent
Marketable ForeignCurrency
Securities Translation Total
(inthousands)
BalanceatDecember31,2015 $ $ $
OCIbeforereclassifications(1) 325 (2,101) (1,776)
AmountsreclassifiedfromAOCI(2)(3)

(281)

(281)

NetcurrentperiodOCI

44

(2,101) (2,057)

BalanceatDecember31,2016 $ 44 $

(2,101) $(2,057)

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(1) Netoftaxexpense(benefit)of$0.2millionforgains/lossesonmarketablesecurities.
(2) Netoftaxexpense(benefit)of$0.1millionforgains/lossesonmarketablesecurities.
(3) RealizedgainsandlossesonmarketablesecuritiesarereclassifiedfromAOCIintootherincome(expense),netintheconsolidated
statementsofoperations.
13.EmployeeBenefitPlans
Wehaveadefinedcontribution401(k)plan(the401(k)Plan)forourUnitedStatesbasedemployees.The401(k)Planisforall
fulltime employees who meet certain eligibility requirements. Eligible employees may contribute up to 100% of their annual
compensation,butarelimitedtothemaximumannualdollaramountallowableundertheInternalRevenueCode.Beginningin2016,
wematch100%ofeachparticipantscontributionuptoamaximumof3%oftheparticipantsbasesalary,bonus,andcommissions
paidduringtheperiod,andwematch50%ofeachparticipantscontributionbetween3%and5%oftheparticipantsbasesalary,bonus,
andcommissionspaidduringtheperiod.FortheyearendedDecember31,2015,wedidnotmakeanymatchingcontributions.During
theyearendedDecember31,2016,werecognizedexpenseof$4.2millionrelatedtomatchingcontributions.
14.StockBasedCompensation
2014EquityIncentivePlanand2012EquityIncentivePlan
Wemaintaintwostockbasedemployeecompensationplans:theAmendedandRestated2014EquityIncentivePlan(the2014
Plan) and the Amended and Restated 2012 Equity Incentive Plan (the 2012 Plan and, together with the 2014 Plan, the Stock
Plans).OurStockPlansprovidefortheissuanceofincentiveandnonstatutorystockoptions,RSUs,restrictedstockawards,andstock
appreciationrightstoqualifiedemployeesandnonemployees.
AllemployeesareeligibletoreceiveawardsofcommonstockundertheStockPlans.AtDecember31,2016,wewereauthorized
toissueupto269,543,860sharesofClassAcommonstockandClassBcommonstockundertheStockPlans.AtDecember31,2016,
42,653,205sharesofClassAcommonstockandClassBcommonstockwereavailableforfuturegrantfromtheStockPlans.Weissue
newsharesonsettlementofvestedRSUsandexerciseofstockoptions.Stockoptionsgenerallyhaveafouryearvestingperiod.Our
boardofdirectorscansuspendorterminatetheStockPlansatanytime.SuspensionorterminationoftheStockPlansdoesnotimpair
rights and obligations under any stock award granted while the Stock Plans were in effect except with the written consent of the
affectedparticipant.CertainstockoptionsandRSUshavevestingprovisionsintheeventofachangeincontroloronlyvestifbotha
changeincontroloccursandtheemployeecontinuestoprovideservice.
StockOptions
Underthe2012Plan,atexercise,stockoptionawardsentitletheholdertoreceiveoneshareofnonvotingClassAcommonstock,
andoneshareofvotingClassBcommonstock(the2012PlanStockOptionAwards).Underthe2014Plan,atexercise,stockoption
awardsentitletheholdertoreceivetwosharesofnonvotingClassAcommonstock(the2014PlanStockOptionAwards).
Stockbasedcompensationexpenseforstockoptionsgrantedtoemployeesandnonemployeesisestimatedbasedontheoptions
fairvalueascalculatedbytheBlackScholesoptionpricingmodel.TheBlackScholesmodelrequiresvariousassumptions,including
thefairvalueofourcommonstock,expectedlife,expected

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dividend yield and expected volatility. If any of the assumptions used in the BlackScholes model change significantly, stockbased
compensationexpensemaydiffermateriallyinthefuturefromthatrecordedinthecurrentperiod.Becausethereisnopublicmarketfor
ourcommonstock,ourboardofdirectorsdeterminedthecommonstockfairvalueatthestockoptiongrantdatebyconsideringseveral
objectiveandsubjectivefactors,includingthepricepaidbyinvestorsforourpreferredstock,ouractualandforecastedoperatingand
financialperformance,marketconditionsandperformanceofcomparablepubliclytradedcompanies,developmentsandmilestonesin
our company, the rights and preferences of our common and preferred stock, the likelihood of achieving a liquidity event, and
transactions involving our preferred stock. The fair value of our common stock has been determined in accordance with applicable
elementsofthepracticeaidissuedbytheAmericanInstituteofCertifiedPublicAccountants,ValuationofPrivatelyHeldCompany
EquitySecuritiesIssuedasCompensation.Weestimatedtheexpectedvolatilityofourawardsfromthehistoricalvolatilityofselected
publiccompanieswithcomparablecharacteristicstous,includingsimilarityinsizeandlinesofbusiness.Theexpectedtermofoptions
represents the period that our stockbased awards are expected to be outstanding. The riskfree interest rate is based on the implied
yield currently available on U.S. treasury notes with terms approximately equal to the expected life of the option. The expected
dividendrateiszeroaswecurrentlyhavenohistoryorexpectationofdeclaringcashdividendsonourcommonstock.Wedidnotgrant
anystockoptionsin2015.DuringtheyearendedDecember31,2016,wegrantedoptionswithanaggregategrantdatefairvalueof
$37.8milliontocertainemployeesinconjunctionwithanacquisition.
The weightedaverage assumptions used to determine the fair value of employee stock options granted during the year ended
December31,2016wereasfollows:

Expectedtermfromgrantdate(inyears) 6.2
Riskfreeinterestrate 1.4%
Expectedvolatility 63%
Dividendyield 0%
Strikeprice $1.00
The weightedaverage fair value of employee stock options granted during the year ended December 31, 2016 was $30.19 per
share.

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StockoptionactivityfortheyearsendedDecember31,2015and2016wasasfollows:

Weighted
Numberof Numberof Average
2012Plan 2014Plan Weighted Remaining
Stock Stock Average Contractual Aggregate
Option Option Exercise Term Intrinsic
Awards Awards Price (inyears) Value
(inthousands,exceptpersharedata)
OutstandingatJanuary1,2015 27,960 19 $ 2.74 8.88$530,629

Granted $
Exercised (59) (1) $ 1.00
Forfeited

(5,967)

(5) $ 4.28

OutstandingatDecember31,2015 21,934 13 $ 2.33 7.82$623,071
Granted 1,253 $ 1.00
Exercised (686) $ 1.06
Forfeited

(62)

$ 15.35

OutstandingatDecember31,2016 21,186 1,266 $ 2.26

6.97$682,565

ExercisableatDecember31,2016 15,931 13 $ 1.75 6.77$492,906

VestedandexpectedtovestatDecember31,2016 21,058 1,266 $ 2.24 6.97$679,080
Total stockbased compensation expense for stock option awards was $68.9 million for the year ended December 31, 2015, of
which$43.6millionwasduetotheacceleratedvestingofmodifiedstockbasedcompensationawardsforcertainformeremployees.
Total stockbased compensation expense for stock option awards was $20.3 million for the year ended December 31, 2016. Total
unrecognized compensation cost related to unvested stock options at December 31, 2016 was $48.6 million and is expected to be
recognized over a weightedaverage period of 2.3 years. The total grant date fair values of options that vested in the years ended
December31,2015and2016were$24.6millionand$15.5million,respectively.Theintrinsicvaluesofstockoptionsexercisedinthe
yearsendedDecember31,2015and2016were$1.8millionand$21.6million,respectively.

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RestrictedStockUnits
RestrictedstockunitactivityfortheyearsendedDecember31,2015and2016wasasfollows.Reflectedinthetablebelow,Non
VotingCommonARSUsentitletheholdertooneshareofClassAcommonstockonvesting,andVotingCommonBRSUsentitlethe
holdertooneshareofClassBcommonstockonvesting.

Weighted
Average
Grant
NonVoting Voting DateFair
CommonA CommonB Valueper
RSUs RSUs RSU
UnvestedatJanuary1,2015 12,152 12,152 $ 9.02
Granted 43,655 21,459 $ 15.36
Vested (156) (156) $ 13.92
Forfeited

(4,458)

(3,728) $

14.23
UnvestedatDecember31,2015 51,193 29,727 $ 15.02
Granted 104,783 $ 15.87
Vested (395) (395) $ 14.90
Forfeited

(3,467)

(751) $

15.40
UnvestedatDecember31,2016 152,114

28,581 $

15.50

AsofDecember31,2016,RSUstoreceive152,039,295sharesofClassAcommonstockandRSUstoreceive28,505,805shares
of Class B common stock have been issued to employees and include both servicebased and performance conditions to vest in the
underlyingsharesofcommonstock.Theperformanceconditionwillbesatisfiedonthefirsttooccurof:(1)achangeincontrolevent,
suchasasaleofallorsubstantiallyallofourassetsoramergerinvolvingthesaleofamajorityoftheoutstandingsharesofourvoting
capitalstockor(2)theeffectivedateoftheregistrationstatementinconnectionwithaqualifyinginitialpublicoffering.Stockbased
compensationexpenseisrecognizedonlyforthoseRSUsthatareexpectedtomeettheservicebasedandperformanceconditions.As
ofDecember31,2015and2016,achievementoftheperformanceconditionwasnotprobable.Achangeincontroleventandeffective
registrationstatementarenotdeemedprobableuntilconsummated.IftheinitialpublicofferinghadoccurredonDecember31,2016,
we would have recognized $1.1 billion of stockbased compensation expense for all RSUs with a performance condition that had
satisfied the servicebased condition on that date, and would have approximately $1.5 billion of unrecognized compensation cost,
whichisexpectedtoberecognizedoveraweightedaverageperiodofapproximately3.4years.
AsofDecember31,2016,RSUstoreceive75,000sharesofClassAcommonstockandRSUstoreceive75,000sharesofClassB
common stock included only servicebased conditions to vest in the underlying common stock. The total stockbased compensation
expense for RSUs not subject to a performance condition for the year ended December 31, 2015 was $4.6 million. The total stock
basedcompensationexpenseforRSUsnotsubjecttoaperformanceconditionfortheyearendedDecember31,2016was$3.4million.
AsofDecember31,2016thetotalunrecognizedcompensationcostrelatedtounvestedRSUsnotsubjecttoaperformanceconditionis
$3.2million,whichisexpectedtoberecognizedoveraweightedaverageperiodof1.8years.
InAugust2016,wemodifiedthetermsandremovedtheperformanceconditionof260,832sharesofRSUsoriginallygrantedto
oneemployeewithbothaservicebasedandperformancecondition.Werecognized$8.2millioninstockbasedcompensationexpense
forthismodificationandissued260,832sharesofClassBvotingcommonstockastheserviceconditionofthesemodifiedRSUshad
alreadybeenmetasofthedateofmodification.Theshareswereimmediatelyrepurchasedandretiredbyus.

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Inaddition,basedonthetermsoftheCEOsofferletter,ontheclosingoftheinitialpublicoffering,theCEOwillreceiveanRSU
awardforsharesofSeriesFPpreferredstock,whichwillbecomeanRSUcoveringanequivalentnumberofsharesofClassCcommon
stockontheclosingoftheinitialpublicoffering.TheCEOawardwillrepresent3.0%ofalloutstandingsharesontheclosingofthe
initial public offering, which includes shares sold by us in the initial public offering and the employee RSUs that will vest on the
effectivedateoftheregistrationstatementinconnectionwithaqualifyinginitialpublicoffering.TheCEOawardwillvestimmediately
ontheclosingoftheinitialpublicofferingandsuchshareswillbedeliveredtotheCEOinequalquarterlyinstallmentsoverthreeyears
beginninginthethirdfullcalendarquarterfollowingtheinitialpublicoffering.ThereisnocontinuingservicerequirementoftheCEO
followingtheclosingoftheinitialpublicoffering.Accordingly,suchshareswillbedeliveredinequalquarterlyinstallmentsregardless
oftheCEOsemploymentstatuswithSnapInc.followinganinitialpublicoffering.Thisawardwillberecognizedascompensation
expense based on 3.0% of shares outstanding post initial public offering and the initial public offering share price. The CEO award
compensationexpensewillberecognizedimmediatelyontheclosingoftheinitialpublicoffering.
IntheyearendedDecember31,2015,weconductedtenderofferstoallowallemployeestheopportunitytoamendthetermsof
theirRSUs.Thenewvestingtermsdifferslightlyfromtheoriginalterms.Undertheoriginalterms,anemployeemustbeemployedby
usatthetimeoftheliquidityeventtovestintheunderlyingshares.Underthenewterms,anemployeewhosatisfiedanyportionofthe
servicebased condition vests in the underlying shares on the liquidity event regardless of whether they were employed by us at the
liquidity event. As no expense related to the original RSUs had been recorded because the performance condition has not yet been
deemed probable, the modifications related to the tender offer did not result in any incremental expense. For those RSUs accepted
under the tender offer, the underlying RSUs are valued at the RSU fair value on the tender offer modification date. This change is
reflectedinthetotalunrecognizedcompensationcostrelatedtounvestedRSUswithaperformanceconditiondisclosedabove.Thetotal
unrecognizedcompensationcostincreased$105.5millionrelatedto17,843,888RSUsintheyearendedDecember31,2015duetothe
tenderoffers.
StockbasedCompensationExpensebyFunction
Totalstockbasedcompensationexpensebyfunctionwasasfollows:

YearEnded
December31,
2015 2016
(inthousands)
Costofrevenue $ 488$ 532

Generalandadministrative 59,193 5,419

Total $73,524$31,842

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15.NetLossperShare
WecomputenetlosspershareofClassAcommonstockandClassBcommonstockandSeriesD,E,F,andFPpreferredstock
using the twoclass method required for multiple classes of common stock and participating securities. The rights, including the
liquidation and dividend rights, of the Class A common stock and Class B common stock, and the Series D, E, F, and FP preferred
stock are substantially identical, other than voting rights. Accordingly, the Class A common stock, Class B common stock, and the
SeriesD,E,F,andFPshareinournetlosses.
OurparticipatingsecuritiesincludeSeriesA,A1,B,andCconvertiblepreferredstock,astheholdersoftheseseriesofpreferred
stockareentitledtoreceiveanoncumulativedividendonaparipassubasisintheeventthatadividendispaidoncommonstock.We
alsoconsideranysharesissuedontheearlyexerciseofstockoptionssubjecttorepurchasetobeparticipatingsecuritiesbecauseholders
ofsuchshareshavenonforfeitabledividendrightsintheeventadividendispaidoncommonstock.TheholdersofSeriesA,A1,B,
andCofpreferredstock,aswellastheholdersofearlyexercisedsharessubjecttorepurchase,donothaveacontractualobligationto
shareinourlosses.Assuch,ournetlossesfortheyearsendedDecember31,2015and2016werenotallocatedtotheseparticipating
securities.
BasicnetlosspershareiscomputedbydividingnetlossattributabletoClassAcommonandClassBcommonstockholdersand
SeriesD,E,F,andFPpreferredstockholdersbytheweightedaveragenumberofsharesofourClassAcommonstockandClassB
commonstockandSeriesD,E,F,andFPpreferredstockoutstandingduringtheperiod.
Forthecalculationofdilutednetlosspershare,netlosspershareattributabletocommonstockholdersandpreferredSeriesD,E,
F,andFPpreferredstockholdersforbasicnetlosspershareisadjustedbytheeffectofdilutivesecurities,includingawardsunderour
equity compensation plans. Diluted net loss per share attributable to common stockholders and Series D, E, F, and FP preferred
stockholdersiscomputedbydividingtheresultingnetlossattributabletocommonstockholdersandSeriesD,E,F,andFPpreferred
stockholdersbytheweightedaveragenumberoffullydilutedcommonsharesoutstanding.IntheyearsendedDecember31,2015and
2016ourpotentialdilutiveshares,suchasstockoptions,RSUs,commonstocksubjecttorepurchase,andsharesofconvertibleSeries
A, A1, B, and C preferred stock were not included in the computation of diluted net loss per share as the effect of including these
sharesinthecalculationwouldhavebeenantidilutive.

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ThenumeratorsanddenominatorsofthebasicanddilutednetlosspersharecomputationsforourcommonstockandSeriesD,E,
F,andFPpreferredstockarecalculatedasfollowsfortheyearsendedDecember31,2015and2016:

2015 2016
CommonStock PreferredStock CommonStock PreferredStock
Series Series
ClassA D,E,F ClassA D,E,F
(non ClassB (non SeriesFP (non ClassB (non SeriesFP
voting) (voting) voting) (voting) voting) (voting) voting) (voting)
Numerator:
Netloss $ (228,933) $(13,323) $(19,731) $(110,906) $(311,523) $(19,287) $(45,887) $ (137,946)

NetlossattributabletoClassAandClassBcommonstockholders
andSeriesD,E,F,andFPpreferredstockholders $ (228,933) $(13,323) $(19,731) $(110,906) $(311,523) $(19,287) $(45,887) $ (137,946)

Denominator:
Basicshares:
WeightedaveragesharesBasic 449,516 26,159 38,742 217,767 489,019 30,276 72,033 216,543

Dilutedshares:
WeightedaveragesharesDiluted 449,516 26,159 38,742 217,767 489,019 30,276 72,033 216,543

NetlosspershareattributabletoClassAandClassBcommon
stockholdersandSeriesD,E,F,andFPpreferredstockholders:
Basic $ (0.51) $ (0.51) $ (0.51) $ (0.51) $ (0.64) $ (0.64) $ (0.64) $ (0.64)
Diluted $ (0.51) $ (0.51) $ (0.51) $ (0.51) $ (0.64) $ (0.64) $ (0.64) $ (0.64)
ThefollowingpotentiallydilutiveshareswereexcludedfromthecalculationofdilutednetlosspershareattributabletoClassA
andClassBcommonstockholdersandSeriesD,E,F,andFPpreferredstockholdersbecausetheireffectwouldhavebeenantidilutive
fortheperiodspresented:

YearEnded
December31,
2015 2016
(inthousands)
Convertiblevotingpreferredstock,SeriesA,A1andB 146,962 146,962

Convertiblenonvotingpreferredstock,SeriesC 16,000 16,000
Stockoptions 43,896 44,904
UnvestedRSUsnotsubjecttoperformanceconditions 404 150
Sharessubjecttorepurchase 4,984 185
ProFormaNetLossperShare(unaudited)
Unaudited pro forma basic and diluted net loss per share were computed to give effect to the automatic conversion of all
outstandingconvertiblepreferredstockintoClassBcommonstockotherthanSeriesFPpreferredstockwhichautomaticallyconverts
toClassCcommonstockinconnectionwithaqualifyinginitialpublicofferingusingtheifconvertedmethodasthoughtheconversion
hadoccurredasofthebeginningoftheperiodortheoriginaldateofissuance,iflater.Theliquidationanddividendrightsareidentical
among Class A, Class B, and Class C common stock, and all classes of common stock share equally in our earnings and losses.
Accordingly,netlosshasbeenreallocatedtoClassA,ClassB,andClassCcommonstockonaproportionalbasis.

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In addition, the pro forma share amounts include the RSUs granted to employees with both servicebased and performance
conditions,whichhadsatisfiedtheservicebasedconditionasofDecember31,2016.TheseRSUswillvestonthesatisfactionofthe
performanceconditioninconnectionwithaqualifyinginitialpublicoffering.Stockbasedcompensationexpenseassociatedwiththese
RSUsisexcludedfromthisproformapresentation.IfthequalifyinginitialpublicofferinghadoccurredonDecember31,2016,we
wouldhaverecorded$1.1billionofstockbasedcompensationexpenserelatedtotheseRSUs.ThenumberofsharesofClassAand
ClassBcommonstockincludedintheproformaadjustmentwasdeterminedbasedonwhetherthetermsofRSUsgrantedtoemployees
entitledthemtosharesofClassAorClassBcommonstock.
To meet the tax withholding requirements, we will withhold the number of shares necessary to satisfy the tax withholding
obligations,basedonthefairvalueofourcommonstockonthedateoftheinitialpublicoffering.Wecurrentlyexpectthattheaverage
ofthesewithholdingtaxrateswillbeapproximately47%.ForRSUsforwhichtheservicebasedvestingconditionwassatisfiedasof
December31,2016,theproformasharesoutstandingfortheyearendedDecember31,2016includestheweightedaverageissuanceof
4.9millionsharesofClassAcommonstock,netof4.3millionshareswithheldfortaxwithholdingobligationsandaweightedaverage
4.2millionsharesofClassBcommonstock,netof3.7millionshareswithheldfortaxwithholdingobligations.
Inaddition,basedonthetermsoftheCEOsofferletter,ontheclosingoftheinitialpublicoffering,theCEOwillreceiveanRSU
awardforsharesofSeriesFPpreferredstock,whichwillbecomeanRSUcoveringanequivalentnumberofsharesofClassCcommon
stockontheclosingoftheinitialpublicoffering.ThesharesunderlyingtheCEOawardhavevotingrightsondeliveryandsettlement
of such shares. Such shares are participating securities on the date of the closing of the initial public offering because they will
participateinalldividendsonClassCcommonstock.TheCEOawardwillrepresent3.0%ofalloutstandingsharesontheclosingof
theinitialpublicoffering,whichincludessharessoldbyusintheinitialpublicofferingandtheemployeeRSUsthatwillvestonthe
effective date of the registration statement in connection with the initial public offering (post IPO shares outstanding). The CEO
awardwillvestimmediatelyontheclosingoftheinitialpublicofferingandsuchshareswillbedeliveredtotheCEOinequalquarterly
installmentsoverthreeyearsbeginninginthethirdfullcalendarquarterfollowingtheinitialpublicoffering.Thereisnocontinuing
servicerequirementoftheCEOfollowingtheclosingoftheinitialpublicoffering.Accordingly,suchshareswillbedeliveredinequal
quarterlyinstallmentsregardlessoftheCEOsemploymentstatuswithSnapInc.followinganinitialpublicoffering.
TheeffectoftheCEOawardisnotincludedintheproformashareamountsduetotheuncertaintyregardingthepostIPOshares
outstanding.WhenthereisanestimateofthepostIPOsharesoutstandingtheunauditedproformanetlosspersharewillbeupdatedto
reflecttheestimatednumberofvestedsharesfortheCEOawardontheclosingdateoftheinitialpublicoffering.
ThenumberofsharesandpershareamountspresentedbelowhavebeenretroactivelyadjustedtoreflecttheeffectsoftheStock
Split.SeeNote1foradditionalinformationontheStockSplit.

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Thenumeratorsanddenominatorsofthebasicanddilutedproformanetlosspersharecomputationsforourcommonstockand
SeriesD,E,F,andFPpreferredstockarecalculatedasfollowsfortheyearendedDecember31,2016:

YearEndedDecember31,2016
CommonStock PreferredStock
ClassA ClassB ClassC SeriesD,E,F SeriesFP
(nonvoting) (voting) (voting) (nonvoting) (voting)
Numerator:
Netlossasreported $ (311,523) $ (19,287) $

$

(45,887) $(137,946)

Reallocationofnetlossduetoproformaadjustments 52,119 (122,232) (113,720) 45,887 137,946

NetlossattributabletoClassA,ClassB,andClassC
commonstockholdersforproformabasicnetlossper
sharecomputation $ (259,404) $(141,519) $(113,720) $

$

Denominator:
Basicshares:
Weightedaveragesharesoutstandingusedforbasicnet
losspersharecomputation 489,019 30,276 72,033 216,543
Proformaadjustmenttoreflectassumedconversionof
SeriesAFpreferredstocktoClassBcommonstock 234,995 (72,033)
Proformaadjustmenttoreflectassumedconversionof
SeriesFPpreferredstocktoClassCcommonstock 216,543 (216,543)
ProformaadjustmenttoreflectassumedvestingofRSUs
withperformancecondition,netofshareswithheldfor
taxwithholdingobligations

4,932

4,205

Numberofsharesusedforproformabasicnetloss
persharecomputation 493,951 269,476 216,543

Dilutedshares:
WeightedaveragesharesDiluted 493,951 269,476 216,543

ProformanetlosspershareattributabletoClassA,ClassB,and
ClassCcommonstockholders:
Basic $ (0.53) $

(0.53) $

(0.53) $

$

Diluted $ (0.53) $

(0.53) $

(0.53) $

$

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SnapInc.

16.BusinessAcquisitions
Looksery
InApril2015,weacquiredLooksery,Inc.(Looksery).Lookseryisamobilevideocommunicationcompanythatspecializesin
creating lenses for use within applications and was acquired to enhance the functionality of our platform. The total purchase
considerationwas$79.4million.Inadditiontothepurchaseconsideration,weprovidedforanadditional$71.2million,ofwhich$43.6
millionisintheformofrestrictedstockunitstoemployeesforfutureservices.Theremaining$27.6millionrelatestocashpayments,a
portionofwhichwaspaidattheacquisitioncloseandtheremainderwillbepaidtoemployeesforfutureservicesoverthefouryears
after the transaction. We also incurred $16.4 million in transactionrelated costs, which are included in general and administrative
expenseintheconsolidatedstatementofoperationsfortheyearendedDecember31,2015.
TheallocationofthetotalpurchaseconsiderationfortheacquisitionofLookseryisasfollows:

Total
(inthousands)
Technology $ 18,800
Customerrelationships 2,200
Goodwill 64,433
Netdeferredtaxliability (7,700)
Otherassetsacquiredandliabilitiesassumed,net

1,692

Total $ 79,425

Thegoodwillamountrepresentssynergiesrelatedtoourexistingplatformexpectedtoberealizedfromthisbusinesscombination
andassembledworkforce.Theassociatedgoodwillandintangibleassetsarenotdeductiblefortaxpurposes.
Bitstrips
InMarch2016,weacquiredalloutstandingsharesofBitstripsInc.(Bitstrips),awebandmobileapplicationthatallowsusersto
createapersonalavatar.Thetotalpurchaseconsiderationwas$64.2million,whichincludes$46.6millionincashand$11.6millionin
sharesofournonvotingClassAcommonstock.Ofthetotalpurchaseconsideration,$6.0millionwasrecordedinaccruedexpenses
andothercurrentliabilitiesontheconsolidatedbalancesheet.
TheallocationofthetotalpurchaseconsiderationfortheacquisitionofBitstripsisasfollows:

Total
(inthousands)
Technology $ 15,700
Customerrelationships 1,600
Goodwill 52,671

(1,162)

Total $ 64,224

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SnapInc.

OtherAcquisitions
InAugust 2016, we acquired all outstanding shares of a mobile search company. The total purchase consideration was $114.5
million, which includes $21.0 million in cash and $83.0 million in shares of our nonvoting Class A common stock. Of the total
purchase consideration, $10.5 million was recorded in other liabilities on the consolidated balance sheet. The allocation of the total
purchaseconsiderationfortheacquisitionisasfollows:

Total
(inthousands)
Technology $ 19,400
Goodwill 98,826

3,421

Total $ 114,535

Inaddition,in2016,weacquiredalloutstandingsharesofaresearchanddevelopmentdrivencomputervisionsoftwarecompany
andsubstantiallyalloftheassetsofvariouscompaniesthatspecializeintheareasofsoftwareandadvertisingtechnologies.Eachofthe
acquisitionsconstitutedabusiness.Thetotalconsiderationtransferredfortheseacquisitionswas$47.0million.Ofthetotalpurchase
consideration, $4.6 million was recorded in other liabilities on the consolidated balance sheet. The allocation of the total purchase
considerationfortheabovementionedacquisitionsisasfollows:

Total
(inthousands)
Technology $ 12,300
Goodwill 35,266
Netdeferredtaxliability (500)

(97)

Total $ 46,969

The goodwill amount represents synergies related to our existing platform expected to be realized from these business
combinations and assembled workforce. Of the technology intangible assets and goodwill in the above table, $9.8 million and
$30.7millionisdeductiblefortaxpurposes,respectively.
AdditionalInformationon2016Acquisitions
In connection with the acquisitions completed during the year ended December 31, 2016, we also agreed to provide additional
consideration of $255.2 million, in both stock and cash, to certain employees of the acquired entities contingent on their continued
employmentwithus.

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SnapInc.

Inaddition,unauditedproformaresultsofoperationsassumingtheaboveacquisitionshadtakenplaceatthebeginningofeach
periodarenotprovidedbecausethehistoricaloperatingresultsoftheacquiredentitieswerenotmaterialandproformaresultswould
notbemateriallydifferentfromreportedresultsfortheperiodspresented.
17.RelatedPartyTransactions
PromissoryNotes
AsofDecember31,2015,wehadnotesreceivablefromourCEOandourChiefTechnologyOfficerintheamountof$5.0million
and$5.0million,respectively.InFebruary2016,ourCEOdrewdownanadditional$15.0million.Theseloansweremadein2014,
2015, and 2016 pursuant to full recourse promissory notes and stock pledge agreements. During 2016, $15.0 million of the notes
receivablewererepaidincashandtheremaining$10.0millionwererepaidthroughrepurchaseofClassBvotingcommonstockand
SeriesFPvotingpreferredstockheldbyourCEOandChiefTechnologyOfficer.AsofDecember31,2016,therewerenooutstanding
notesreceivablefromofficers/stockholders.
18.SubsequentEvents
For our consolidated financial statements as of and for the years ended December 31, 2015 and 2016 we have evaluated
subsequent events through January 26, 2017, which is the date the financial statements were available to be issued, except for the
followingwhichisasofFebruary2,2017(unaudited):
On January 30, 2017, we entered into the Google Cloud Platform License Agreement. Under the agreement, we were granted
accessandusecertaincloudservices.Theagreementhasaninitialtermoffiveyearsandwearerequiredtopurchaseatleast$400.0
millionofcloudservicesineachyearoftheagreement,thoughforeachofthefirstfouryears,upto15%ofthisamountmaybemoved
toasubsequentyear.Ifwefailtomeettheminimumpurchasecommitmentduringanyyear,wearerequiredtopaythedifference.Our
agreementwithGooglepermitsustouseotherthirdpartyserviceprovidersforaportionofourcloudservices.
OnJanuary27,2017,ourboardofdirectorsadoptedour2017EmployeeStockPurchasePlan,orESPP.TheESPPwillbecome
effective once the registration statement in connection with the initial public offering is declared effective. The ESPP authorizes the
issuanceof16,484,690sharesofourClassAcommonstock.
OnJanuary27,2017,ourboardofdirectorsadoptedour2017EquityIncentivePlan,orthe2017Plan.The2017Planwillbecome
effectiveoncetheregistrationstatementinconnectionwiththeinitialpublicofferingisdeclaredeffective.Themaximumnumberof
sharesofourClassAcommonstockthatmaybeissuedunderour2017Planis355,522,498,including42,653,205sharesofClassA
commonstockandClassBcommonstockreservedunderthe2012Planand2014Plan,asofDecember31,2016.
OnJanuary27,2017,ourboardofdirectorsapprovedourpledgetodonateupto13,000,000sharesofClassAcommonstockover
thecourseofthenext15to20yearstotheSnapFoundation,whichwillsupportarts,education,andyouth.

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Shares

ClassACommonStock
MorganStanleyGoldman,Sachs&Co.J.P.MorganDeutscheBankSecurities
BarclaysCreditSuisseAllen&CompanyLLC
2/2/2017 S-1
Through and including , 2017 (the 25th day after the date of this prospectus),
all dealers that effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to a dealers obligation
to deliver a prospectus when acting as an underwriter and with respect to an unsold
allotment or subscription.
2/2/2017 S-1
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PARTII
INFORMATIONNOTREQUIREDINPROSPECTUS
Unlessotherwiseindicated,allreferencestoSnap,thecompany,we,our,us,orsimilartermsrefertoSnapInc.andits
subsidiaries.
Item13.OtherExpensesofIssuanceandDistribution.
Thefollowingtablesetsforthallexpensestobepaidbyus,otherthanunderwritingdiscountsandcommissions,inconnection
withthisoffering.AllamountsshownareestimatesexceptfortheSECregistrationfee,theFINRAfilingfeeandtheexchangelisting
fee.

SECregistrationfee $ *
FINRAfilingfee *
Exchangelistingfee *
Printingandengravingexpenses *
Legalfeesandexpenses *
Accountingfeesandexpenses *
Custodiantransferagentandregistrarfees *
Miscellaneous

*

Total $*

* tobefiledbyamendment.
Item14.IndemnificationofDirectorsandOfficers.
Section145oftheDelawareGeneralCorporationLawauthorizesacourttoaward,oracorporationsboardofdirectorstogrant,
indemnitytodirectorsandofficersintermssufficientlybroadtopermitsuchindemnificationundercertaincircumstancesforliabilities,
includingreimbursementforexpensesincurred,arisingundertheSecuritiesAct.Ouramendedandrestatedcertificateofincorporation
thatwillbeineffectontheclosingofthisofferingpermitsindemnificationofourdirectors,officers,employees,andotheragentstothe
maximumextentpermittedbytheDelawareGeneralCorporationLaw,andouramendedandrestatedbylawsthatwillbeineffecton
theclosingofthisofferingprovidethatwewillindemnifyourdirectorsandofficersandpermitustoindemnifyouremployeesand
otheragents,ineachcasetothemaximumextentpermittedbytheDelawareGeneralCorporationLaw.
We have entered into indemnification agreements with our directors and officers, whereby we have agreed to indemnify our
directorsandofficerstothefullestextentpermittedbylaw,includingindemnificationagainstexpensesandliabilitiesincurredinlegal
proceedingstowhichthedirectororofficerwas,oristhreatenedtobemade,apartybyreasonofthefactthatsuchdirectororofficeris
orwasadirector,officer,employee,oragentofSnapInc.,providedthatsuchdirectororofficeractedingoodfaithandinamannerthat
the director or officer reasonably believed to be in, or not opposed to, the best interest of Snap Inc. At present, there is no pending
litigation or proceeding involving a director or officer of Snap Inc. regarding which indemnification is sought, nor is the registrant
awareofanythreatenedlitigationthatmayresultinclaimsforindemnification.
WemaintaininsurancepoliciesthatindemnifyourdirectorsandofficersagainstvariousliabilitiesarisingundertheSecuritiesAct
andtheSecuritiesExchangeActof1934,asamended,thatmightbeincurredbyanydirectororofficerinhiscapacityassuch.
Theunderwritersareobligated,undercertaincircumstances,undertheunderwritingagreementtobefiledasExhibit1.1hereto,to
indemnifyusandourofficersanddirectorsagainstliabilitiesundertheSecuritiesAct.

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Item15.RecentSalesofUnregisteredSecurities.
ThefollowingsetsforthinformationregardingallunregisteredsecuritiessoldsinceJanuary1,2014(aftergivingeffecttoa10
for1stockspliteffectedonJuly3,2014andwithoutgivingeffecttotheClassADividend):
SalesofPreferredStock

(1) InJanuary2014,wesoldanaggregateof1,332,640sharesofSeriesCpreferredstocktoatotalofthreeaccreditedinvestorsata
purchasepricepershareof$3.40893foranaggregatepurchasepriceof$4,542,876.

(2) InApril2014,wesoldanaggregateof3,369,220sharesofSeriesDpreferredstocktoatotalofthreeaccreditedinvestorsata

(3) In July 2014, we sold an aggregate of 1,013,085 shares of Series E preferred stock to a total of five accredited investors at a

(4) InAugust2014,wesoldanaggregateof6,237,393sharesofSeriesEpreferredstocktoatotaloffouraccreditedinvestorsata

(5) InSeptember2014,wesoldanaggregateof1,544,958sharesofSeriesEpreferredstocktoatotalofthreeaccreditedinvestorsat
apurchasepricepershareof$21.7158foranaggregatepurchasepriceof$33,549,999.

(6) InOctober2014,wesoldanaggregateof2,394,569sharesofSeriesEpreferredstocktoatotaloftwoaccreditedinvestorsata

(7) InNovember2014,wesoldanaggregateof4,604,942sharesofSeriesEpreferredstocktoatotaloffiveaccreditedinvestorsata

(8) InDecember2014,wesoldanaggregateof4,186,629sharesofSeriesEpreferredstocktoatotalofthreeaccreditedinvestorsat
apurchasepriceof$21.7158pershareforanaggregatepurchasepriceof$90,915,998.

(9) InFebruary2015,wesoldanaggregateof6,510,416sharesofSeriesFpreferredstocktooneaccreditedinvestoratapurchase
priceof$30.72foranaggregatepurchasepriceof$199,999,980.

(10) In March 2015, we sold an aggregate of 6,347,652 shares of Series F preferred stock to a total of 23 accredited investors at a
purchasepriceof$30.72foranaggregatepurchasepriceof$194,999,869.

(11) InApril2015,wesoldanaggregateof3,276,040sharesofSeriesFpreferredstocktoatotalofsevenaccreditedinvestorsata

(12) In May 2015, we sold an aggregate of 1,367,187 shares of Series F preferred stock to a total of four accredited investors at a

(13) InJune2015,wesoldanaggregateof24,414sharesofSeriesFpreferredstocktooneaccreditedinvestoratapurchasepriceof
$30.72foranaggregatepurchasepriceof$749,998.

(14) In July 2015, we sold an aggregate of 3,678,383 shares of Series F preferred stock to a total of six accredited investors at a

(15) InJanuary2016,wesoldanaggregateof224,756sharesofSeriesFpreferredstocktooneaccreditedinvestoratapurchaseprice
of$30.72foranaggregatepurchasepriceof$6,904,504.

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(16) InFebruary2016,wesoldanaggregateof5,696,615sharesofSeriesFpreferredstocktoatotalof14accreditedinvestorsata

(17) In March 2016, we sold an aggregate of 334,471 shares of Series F preferred stock to a total of two accredited investors at a

(18) In April 2016, we sold an aggregate of 8,631,480 shares of Series F preferred stock to a total of 15 accredited investors at a

(19) In May 2016, we sold an aggregate of 22,780,982 shares of Series F preferred stock to a total of 97 accredited investors at a
PlanRelatedIssuances

(20) FromJanuary1,2014throughFebruary2,2017,wegrantedtoourdirectors,employees,consultants,andotherserviceproviders
optionstopurchase18,291,500sharesofourClassBcommonstockwithpershareexercisepricesrangingfrom$0.99to$21.72
underour2012Plan.

(21) FromJanuary1,2014throughFebruary2,2017,weissuedtoourdirectors,employees,consultants,andotherserviceproviders
an aggregate of 6,391,991 shares of our Class B common stock at per share purchase prices ranging from $0.054 to $15.35
pursuanttoexercisesofoptionsgrantedunderour2012Plan.

anaggregateof33,680,567RSUstobesettledinsharesofourClassBcommonstockunderour2012Plan.

anaggregateof583,309sharesofourClassBcommonstockuponthevestingandsettlementofRSUsandsharesissuedpursuant
toarestrictedstockawardgrantedunderour2012Plan,ofwhich300,525shareswererepurchased.

(24) FromJanuary1,2014throughFebruary2,2017,wegrantedtoourdirectors,employees,consultants,andotherserviceproviders
optionstopurchase1,276,859sharesofourClassAcommonstockwithpershareexercisepricesrangingfrom$0.68to$1.55
underour2014Plan.

anaggregateof651sharesofourClassAcommonstockatapersharepurchasepriceof$1.55pursuanttoexercisesofoptions
grantedunderour2014Plan.

anaggregateof88,922,351RSUstobesettledinsharesofourClassAcommonstockunderour2014Plan.
Acquisitions

(27) OnApril29,2014,weissued1,103,140sharesofourClassBcommonstockasconsiderationtosevenindividualsinconnection
withouracquisitionofalloftheoutstandingsharesofacompany.

(28) On September 5, 2014, we issued 1,266,322 shares of our Class A common stock as consideration to eight individuals and
seventeenentitiesinconnectionwithouracquisitionofalloftheoutstandingsharesacompany.

(29) OnApril17,2015,weissued952,810sharesofourClassAcommonstockasconsiderationtotwoindividualsandtwoentitiesin
connectionwithouracquisitionofalloftheoutstandingsharesofacompany.

(30) OnMarch21,2016,weissued458,731sharesofourClassAcommonstockasconsiderationtoeightindividualsandtwoentities
inconnectionwithouracquisitionofalloftheoutstandingsharesofacompany.

(31) OnMarch24,2016,weissued48,826sharesofourClassAcommonstockasconsiderationtofourindividualsinconnectionwith
ouracquisitionofalloftheoutstandingsharesofacompany.

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(32) OnAugust16,2016,weissued2,638,961sharesofourClassAcommonstockasconsiderationtosixindividualsandtwentyone
entitiesinconnectionwithouracquisitionofalloftheoutstandingsharesofacompany.
None of the foregoing transactions involved any underwriters, underwriting discounts, or commissions, or any public offering.
Unlessotherwisespecifiedabove,webelievethesetransactionswereexemptfromregistrationundertheSecuritiesActinrelianceon
Section 4(2) of the Securities Act (and Regulation D or Regulation S promulgated thereunder), or Rule 701 promulgated under
Section3(b)oftheSecuritiesActastransactionsbyanissuernotinvolvinganypublicofferingorunderbenefitplansandcontracts
relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their
intentionstoacquirethesecuritiesforinvestmentonlyandnotwithaviewtoorforsaleinconnectionwithanydistributionthereof,
andappropriatelegendswereplacedonthesharecertificatesissuedinthesetransactions.Allrecipientshadadequateaccess,through
their relationships with us, to information about us. The sales of these securities were made without any general solicitation or
advertising.
Item16.ExhibitsandFinancialStatementSchedules.
(a)Exhibits.
SeetheExhibitIndexonthepageimmediatelyfollowingthesignaturepageforalistofexhibitsfiledaspartofthisregistration
statementonFormS1,whichExhibitIndexisincorporatedhereinbyreference.
(b)FinancialStatementSchedules.
Allfinancialstatementschedulesareomittedbecausetheinformationrequiredtobesetforththereinisnotapplicableorisshown
intheconsolidatedfinancialstatementsorthenotesthereto.
Item17.Undertakings.
(a) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting
agreementcertificatesinsuchdenominationsandregisteredinsuchnamesasrequiredbytheunderwriterstopermitpromptdeliveryto
eachpurchaser.
(b) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and
controllingpersonsoftheregistrantundertheforegoingprovisions,orotherwise,theregistranthasbeenadvisedthatintheopinionof
theSECsuchindemnificationisagainstpublicpolicyasexpressedintheSecuritiesActandis,therefore,unenforceable.Intheevent
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a
director,officer,orcontrollingpersonoftheregistrantinthesuccessfuldefenseofanyaction,suit,orproceeding)isassertedbysuch
director,officer,orcontrollingpersoninconnectionwiththesecuritiesbeingregistered,theregistrantwill,unlessintheopinionofits
counselthematterhasbeensettledbycontrollingprecedent,submittoacourtofappropriatejurisdictionthequestionwhethersuch
indemnificationbyitisagainstpublicpolicyasexpressedintheSecuritiesActandwillbegovernedbythefinaladjudicationofsuch
issue.
(c)Theundersignedregistrantherebyundertakesthat:
(1)ForpurposesofdetermininganyliabilityundertheSecuritiesAct,theinformationomittedfromtheformofprospectusfiled
aspartofthisregistrationstatementinrelianceonRule430AandcontainedinaformofprospectusfiledbytheregistrantunderRule
424(b)(1)or(4)or497(h)undertheSecuritiesActwillbedeemedtobepartofthisregistrationstatementasofthetimeitwasdeclared
effective.
(2)ForthepurposeofdetermininganyliabilityundertheSecuritiesActof1933,eachposteffectiveamendmentthatcontainsa
formofprospectuswillbedeemedtobeanewregistrationstatementrelatingtothesecuritiesofferedtherein,andtheofferingofsuch
securitiesatthattimewillbedeemedtobetheinitialbonafideofferingthereof.

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SIGNATURES
PursuanttotherequirementsoftheSecuritiesActof1933,theregistrantcertifiesthatithasreasonablegroundstobelievethatit
meetsalloftherequirementsforfilingonFormS1andhasdulycausedthisregistrationstatementtobesignedonitsbehalfbythe
undersigned,thereuntodulyauthorized,inVenice,CaliforniaonFebruary2,2017.

SNAPINC.
By: /s/EvanSpiegel
Name: EvanSpiegel
Title: ChiefExecutiveOfficer
POWEROFATTORNEY
KNOWALLPERSONSBYTHESEPRESENTS,thateachpersonwhosesignatureappearsbelowconstitutesandappointsEvan
Spiegel,ChrisHandman,andAndrewVollero,andeachoneofthem,ashisorhertrueandlawfulattorneysinfactandagents,withfull
powerofsubstitutionandresubstitution,forhimorherandintheirname,place,andstead,inanyandallcapacities,tosignanyandall
amendments(includingposteffectiveamendments)tothisregistrationstatement,andtosignanyregistrationstatementforthesame
offeringcoveredbythisregistrationstatementthatistobeeffectiveonfilingpursuanttoRule462(b)undertheSecuritiesActof1933,
as amended, and all posteffective amendments thereto, and to file the same, with all exhibits thereto and other documents in
connectiontherewith,withtheSecuritiesandExchangeCommission,grantinguntosaidattorneysinfactandagents,andeachofthem,
fullpowerandauthoritytodoandperformeachandeveryactandthingrequisiteandnecessarytobedoneinconnectiontherewith,as
fullytoallintentsandpurposesashemightorcoulddoinperson,herebyratifyingandconfirmingallthatsaidattorneysinfactand
agentsoranyofthem,orhissubstituteorsubstitutes,maylawfullydoorcausetobedonebyvirtuehereof.
PursuanttotherequirementsoftheSecuritiesActof1933,thisregistrationstatementhasbeensignedbythefollowingpersonsin
thecapacitiesandonthedatesindicated.

Signature Title Date
/s/EvanSpiegel ChiefExecutiveOfficerandDirector February2,2017

EvanSpiegel (PrincipalExecutiveOfficer)
/s/RobertMurphy DirectorandChiefTechnologyOfficer February2,2017

RobertMurphy
/s/AndrewVollero ChiefFinancialOfficer February2,2017

AndrewVollero (PrincipalFinancialandAccountingOfficer)
/s/JoannaColes Director February2,2017

JoannaColes
/s/A.G.Lafley Director February2,2017

A.G.Lafley
/s/MitchellLasky Director February2,2017

MitchellLasky

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Signature Title Date
/s/MichaelLynton Director February2,2017

MichaelLynton
/s/StanleyMeresman Director February2,2017

StanleyMeresman
/s/ScottD.Miller Director February2,2017

ScottD.Miller
/s/ChristopherYoung Director February2,2017

ChristopherYoung

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EXHIBITINDEX

Exhibit
Number Description
1.1* FormofUnderwritingAgreement.
3.1 AmendedandRestatedCertificateofIncorporationofSnapInc.,ascurrentlyineffect.
3.2 FormofAmendedandRestatedCertificateofIncorporationofSnapInc.,tobeineffectontheclosingoftheoffering.
3.3 AmendedandRestatedBylawsofSnapInc.,asamended,ascurrentlyineffect.
3.4 FormofAmendedandRestatedBylawsofSnapInc.,tobeineffectontheclosingoftheoffering.
4.1 FormofClassACommonStockCertificate.
5.1* OpinionofCooleyLLP.
10.1 AmendedandRestatedInvestorRightsAgreement,datedOctober31,2016.
10.2+ SnapInc.AmendedandRestated2012EquityIncentivePlan.
10.3+ Formsofgrantnotice,stockoptionagreementandnoticeofexerciseundertheSnapInc.AmendedandRestated2012
EquityIncentivePlan.
10.4+ FormsofrestrictedstockunitgrantnoticeandawardagreementundertheSnapInc.AmendedandRestated2012Equity
IncentivePlan.
10.5+ SnapInc.AmendedandRestated2014EquityIncentivePlan.
10.6+ Formsofgrantnotice,stockoptionagreementandnoticeofexerciseundertheSnapInc.AmendedandRestated2014
EquityIncentivePlan.
10.7+ FormsofrestrictedstockunitgrantnoticeandawardagreementundertheSnapInc.AmendedandRestated2014Equity
IncentivePlan.
10.8+ SnapInc.2017EquityIncentivePlan,tobeineffectontheclosingofthisoffering.
10.9+ Formsofgrantnotice,stockoptionagreementandnoticeofexerciseundertheSnapInc.2017EquityIncentivePlan,to
beineffectontheclosingofthisoffering.
10.10+ FormsofrestrictedstockunitgrantnoticeandawardagreementundertheSnapInc.2017EquityIncentivePlan,tobein
effectontheclosingofthisoffering.
10.11+ SnapInc.2017EmployeeStockPurchasePlan.
10.12+ FormofIndemnificationAgreement,tobeenteredintobyandbetweenSnapInc.andeachdirectorandexecutiveofficer.
10.13+ AmendedandRestatedOfferLetter,byandbetweenSnapInc.andEvanSpiegel,datedOctober27,2016.
10.14+ AmendedandRestatedOfferLetter,byandbetweenSnapInc.andRobertMurphy,datedOctober27,2016.
10.15+ AmendedandRestatedOfferLetter,byandbetweenSnapInc.andAndrewVollero,datedOctober27,2016.
10.16+ AmendedandRestatedOfferLetter,byandbetweenSnapInc.andImranKhan,datedOctober27,2016.
10.17+ AmendedandRestatedOfferLetter,byandbetweenSnapInc.andChrisHandman,datedOctober27,2016.
10.18+ AmendedandRestatedOfferLetter,byandbetweenSnapInc.andTimothySehn,datedOctober27,2016.
10.19+ AmendedandRestatedOfferLetter,byandbetweenSnapInc.andStevenHorowitz,datedOctober27,2016.
10.20# GoogleCloudPlatformLicenseAgreement,byandbetweenSnapInc.andGoogleInc.,dated.

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Exhibit
Number Description
10.21 Revolving Credit Agreement, by and among Snap Inc., Morgan Stanley Senior Funding, Inc., Deutsche Bank AG
Cayman Islands Branch, Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Barclays Bank PLC, and Credit
SuisseAG,CaymanIslandsBranch,datedJuly29,2016.
16.1 LetterfromPricewaterhouseCoopersLLPtotheSecuritiesandExchangeCommission.
21.1 ListofSubsidiaries.
23.1 ConsentofErnst&Young,LLP,independentregisteredpublicaccountingfirm.
23.2* ConsentofCooleyLLP(includedinExhibit5.1).
24.1 PowerofAttorney(seesignaturepages).

* Tobefiledbyamendment.Allotherexhibitsaresubmittedherewith.
+ Indicatesmanagementcontractorcompensatoryplan.
# Confidentialtreatmenthasbeenrequestedforportionsofthisexhibit.

II8

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S-1 1 d270216ds1.htm S-1

Lossfromoperations (381,729) (520,385)

Lossbeforeincometaxes (380,482) (521,723)

Lossfromoperations (381,729) (520,385)

Lossbeforeincometaxes (380,482) (521,723)

FreeCashFlow $(325,827) $(677,686)

Lossfromoperations (381,729) (520,385)

Lossbeforeincometaxes (380,482) (521,723)

AdjustedEBITDA(1) $ (292,898) $ (459,428)

Lossfromoperations 651 129

Lossbeforeincometaxes 649 129

Revenue $58,663 $404,482 $345,819 NM

CostofRevenue $182,341 $451,660 $269,319 148%

ResearchandDevelopmentExpenses $82,235 $183,676 $101,441 123%

SalesandMarketingExpenses $27,216 $124,371 $97,155 357%

GeneralandAdministrativeExpenses $148,600 $165,160 $16,560 11%

InterestIncome $1,399 $4,654 $3,255 233%

InterestExpense $ $(1,424) $(1,424) NM

OtherIncome(Expense),Net $(152) $(4,568) $(4,416) NM

IncomeTaxBenefit(Expense) $7,589 $7,080 $ (509) (7)%

NetLoss $(372,893) $(514,643) $(141,750) 38%

Interestincome 194 332 475 398 359 871 1,938 1,486

Lossbeforeincometaxes (98,612) (87,535) (96,656) (97,679) (104,455) (115,927) (131,099) (170,242)

Total $ 51,662 $ 6,036 $

AdjustedEBITDA $ (43,986) $(77,903) $

FreeCashFlow $ (41,625) $(75,091) $

Netloss 2,516% 1,506%

Netcashusedinoperatingactivities $(306,622) $ (611,245)

FreeCashFlow(1) $(325,827) $ (677,686)

Operatingleases $379,497 $ 32,631 $ 89,101 $100,467 $157,298

Totalcurrentassets 692,564 1,179,985 1,179,985

Totalcurrentliabilities 156,258 156,744 343,936

Lossfromoperations (381,729) (520,385)

Lossbeforeincometaxes (380,482) (521,723)

Netcashprovidedbyfinancingactivities 650,366 1,141,890

Changeincashandcashequivalents 242,802 (490,689)

Computerhardwareandsoftware $15,055 $ 22,606

Total 50,806 118,395

Propertyandequipment,net $44,079 $100,585

Domainnames 3.8$ 5,000$ 1,167$ 3,833

Domestic $(380,216) $(520,482)

Lossbeforeincometaxes $(380,482) $(521,723)

Totaldeferredtaxassets $ 173,305 $ 108,563

Totaldeferredtaxliabilities (8,219) (167)

OutstandingatJanuary1,2015 27,960 19 $ 2.74 8.88$530,629

ExercisableatDecember31,2016 15,931 13 $ 1.75 6.77$492,906

Costofrevenue $ 488$ 532

Convertiblevotingpreferredstock,SeriesA,A1andB 146,962 146,962

Reallocationofnetlossduetoproformaadjustments 52,119 (122,232) (113,720) 45,887 137,946

/s/EvanSpiegel ChiefExecutiveOfficerandDirector February2,2017

/s/RobertMurphy DirectorandChiefTechnologyOfficer February2,2017

/s/AndrewVollero ChiefFinancialOfficer February2,2017

/s/JoannaColes Director February2,2017

/s/A.G.Lafley Director February2,2017

/s/MitchellLasky Director February2,2017

Signature Title Date

/s/MichaelLynton Director February2,2017

/s/StanleyMeresman Director February2,2017

/s/ScottD.Miller Director February2,2017

/s/ChristopherYoung Director February2,2017

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