Quote:
Originally Posted by TrustySam
Have been reading up to see if how much/little potential there might be for Snap to possibly turn a profit in the future - and a couple of articles were saying that they're struggling to turn a profit because cloud storage is so expensive ... guess Google cloud storage is costing them $400mil/yr?
Probably better to buy Google instead?
yeah, i took a look through the S-1 and they spend a large, and increasing, amount google cloud services. from Q1 2015 through Q4 2016 (quarterly basis, globally, DAUs are in millions):
endQ----DAUs--CoR/DAU--Rev/DAU
Mar’15-----81-----0.26-----0.05
June’15-----89-----0.46-----0.06
Sept’15-----99-----0.57-----0.17
Dec’15-----110-----0.59-----0.30
Mar’16-----130-----0.58-----0.30
June’16-----148-----0.64-----0.49
Sept’16-----154-----0.83-----0.83
Dec’16-----161-----0.95-----1.03
cost of revenue (CoR above) is their line item expense that is primarily attributable to those costs*. obviously a big part of whatever $XXB valuation they get is going to be pricing in scenarios where they have yuge revenue growth, but they also are going to have to solve this growing cost/DAU problem. i have absolutely no idea how feasible that part of this is/what reasonable cost paths look like on that side - would be very interested to hear opinions on this.
also curious if people have thoughts on the non voting share issue (and accompanying lack of 13d req filings), or share/control structure wrt being acquired (which could be a realistic bull case here)
*from S-1: "Cost of revenue consists primarily of payments to third-party infrastructure partners for hosting our products. Hosting costs primarily include expenses related to bandwidth, computing, and storage costs. Cost of revenue also includes revenue share payments to our content partners, content creation costs, which include personnel-related costs, and advertising measurement services. In addition, cost of revenue includes inventory costs for Spectacles and facilities and other supporting overhead costs, including depreciation and amortization."
Last edited by jvds; 02-04-2017 at 08:35 PM.
Reason: formatting?