Snap registers for its IPO

Snapchat Is in the Money Burning Business

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In its IPO registration form, filed with the SEC on Thursday, Snapchat’s parent company Snap granted us a first look at the financials behind one of the most-hyped messaging apps of the past years. Ironically, the company that rose to fame offering a way to send disappearing messages seems to be just as good at making money disappear.

In 2016, Snap lost $515 million, a sharp increase from the $373 million it had lost the previous year. In all fairness, the company did an impressive job at building its advertising business from scratch. Revenue increased nearly seven-fold between 2015 and 2016, with ad sales accounting for 96 percent of Snap's $404 million haul in 2016.

While it is not unusual for young tech companies to lose money, Snap was surprisingly candid about its financial prospects. In the section describing its business risks, the company states: “We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability”.



Infographic: Snapchat Is in the Money Burning Business | Statista
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