Snap Inc. (NYSE:SNAP) Q4 2023 Earnings Conference Call February 6, 2024 6:00 PM ET

Company Participants

David Ometer - Head of Investor Relations

Evan Spiegel - Chief Executive Officer & Co-Founder

Derek Andersen - Chief Financial Officer

Conference Call Participants

Ross Sandler - Barclays

Doug Anmuth - JPMorgan

Eric Sheridan - Goldman Sachs

Mark Shmulik - Bernstein

Rich Greenfield - LightShed Partners

James Heaney - Jefferies

Justin Post - Bank of America

Stephen Ju - UBS

Mark Mahaney - Evercore

Operator

Good afternoon, everyone and welcome to Snap Inc.'s Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to David Ometer, Head of Investor Relations.

David Ometer

Thank you and good afternoon, everyone. Welcome to Snap's fourth quarter 2023 earnings conference call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder; and Derek Andersen, Chief Financial Officer. Please refer to our Investor Relations website at investor.snap.com to find today's press release, slides, investor letter and investor presentation.

This conference call includes forward-looking statements which are based on our assumptions as of today. Actual results may differ materially from those expressed in these forward-looking statements and we make no obligation to update our disclosures. For more information about factors that may cause actual results to differ materially from these forward-looking statements, please refer to the press release we issued today as well as risks described in our most recent Form 10-Q, particularly in the section titled Risk Factors. Today's call will include both GAAP and non-GAAP measures. Reconciliations between the two can be found in today's press release. Please note that when we discuss all of our expense figures, they will exclude stock-based compensation and related payroll taxes as well as depreciation and amortization and certain other items. Please refer to our filings with the SEC to understand how we calculate any of the metrics discussed on today's call.

With that, I'd like to turn the call over to Evan.

Evan Spiegel

Hi, everyone and thank you all for joining us. In Q4, we continued to make progress on our core priorities of growing our community and improving depth of engagement, driving top line growth and diversifying our revenue sources and carving a path to adjusted EBITDA profitability and positive free cash flow.

Monthly active users increased more than 8% year-over-year and surpassed the 800 million milestone in Q4, demonstrating progress towards our goal of 1 billion monthly active users. Daily active users reached 414 million in Q4, an increase of 10% year-over-year and we continue to deepen engagement with our content platform, with the number of viewers and total time spent watching content growing year-over-year. Revenue grew 5% year-over-year in Q4 to reach $1.361 billion as we remain focused on investing in our Direct Response business to deliver increased return on ad spend for our advertising partners. Adjusted gross margins expanded 1 percentage point quarter-over-quarter. Adjusted operating expenses declined by 2% year-over-year. And we delivered adjusted EBITDA of $159 million and free cash flow of $111 million in Q4.