Snap vs. Facebook IPO. And the winner is…

The great IPO matchup

Here is a quick visual run through of some key financial and business metrics from the Snap and Facebook S-1's.

First, the income statement. I’m surprised Snap is going public this early. They’ve got amazing top-line growth but are still reporting gross losses (revenue minus cost of revenue) and growing net losses ($370 million net loss in ’15 increased to a $515 million net loss in ‘16). When Facebook IPO’d it had reported net income in the previous year of $1 billion.

Snap S-1 excerpt

Second, lets check the cash flow and balance sheets. Snap is burning a lot of cash but has enough cash on it’s balance sheet to cover the burn. But Facebook was spinning off cash and had way more cash on hand to invest in future growth initiatives.

The cash flow statements…

The balance sheets…

Now, the big user metric: DAU. Snapchat is looking solid at 158 million but Facebook was posting a whopping 483 million daily average users and both companies, at the time of S1, had the same Q0Q DAU growth of 48%! Facebook is clearly the winner here; it was further in it’s growth cycle than Snap but still growing at users at the same rate.

Finally, a look at Snap’s ARPU. This wasn’t in the Facebook S-1 but it’s worth checking out for Snap. They’re growing fast on the back of huge sales & marketing expense increases. Snap’s $1.05 ARPU still leaves a lot of room for growth, especially considering Facebook’s recently reported ARPU is over 3x higher, at $3.32.

Ok, so given all this, it’s a fairly easy decision. Due to higher income and cash flows, a stronger balance sheet, and a higher DAU with the same DAU growth rate, this contest goes to the Zuck — you sir, had much better pre-IPO financials! As if he hasn’t won enough for one lifetime. Congrats Mark!

Mark wins… yet again