Snap Inc. (SNAP) Earnings Call Transcript & Summary

Thank you, everyone, for joining us. I hope it's been a productive conference so far. My name is Brian Nowak. I'm the Head of U.S. Internet Research here at Morgan Stanley. We're really thrilled today to have Derek Andersen, the CFO of Snap, with us to have a fireside discussion. Before we get started, I have to do the obligatory disclosures. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at www.morganstanley.com/researchdisclosures. Some of the statements made today by Snap may be considered forward-looking. These statements involve a number of risks and uncertainties that could make actual results to differ materially. Any forward-looking statements made today by Derek and Snap are based on assumptions as of today, and Snap undertakes no obligation to update them. Please refer to Snap's official SEC filings for a discussion of risk factors that may affect actual results. We're really thrilled to have Derek with us. Derek, you've been the CFO of Snap since May of 2019. Previously, you were Vice President of Finance at Snap starting in 2018. Before your life at Snap, you worked at Amazon from 2011 to 2018, serving a variety of roles, including Vice President of Finance, supporting the digital video business. I know you worked at Fox Interactive Media. Years and years of experience in digital media, e-commerce, video. So we're thrilled to have you here today.

Brian, thanks for having me. Appreciate it. Excited to be here and thanks, everyone, who's joined us.

So a lot to talk about. There's always a lot of things going on with Snap, with the advertising ecosystem, et cetera. So maybe let me start with a couple of high-level questions just about the evolution of Snapchat. Here we are in year 10 of the company. It's been transformed a lot. You have over 300 million daily active users opening the app 30 times a day, a lot of engagement, 5 billion snaps created every day. We keep getting these new products and these new use cases from communications, to camera, to stories, et cetera. Maybe just talk to us a little bit about how has consumer behavior and how people are using the platform, how has that changed sort of throughout shelter-in and sort of where do you see that evolving to as the world continues to reopen?

Sure. Thanks for the question. First, I'd say the metrics you shared are exciting just because of the level of engagement we're seeing on the platform and the momentum that we've established and the growth of the community over the last number of years is really exciting. So fundamentally, just the growth in the global audience has been really exciting to see accelerate and growing on some of the highest rates we've seen in more than 4 years over the last couple of quarters. So just that fundamental engagement that we're seeing from the audience is exciting. I think when you're thinking about those sort of 3 core platforms or the 3 sort of screens that were there before we moved to the 5, I'd start with the camera. The camera is really literally and figuratively the center of the application. We open to the camera. And we really pioneered talking with pictures or using the camera to communicate expressively with your friends and your family. And I think if there's anything that's changing there, what we're really seeing over time is the camera is becoming more and more of a utility. We're building more functionality, more capability around the camera. And so where some of like the AR capability, as an example, may have started with things that were designed to reduce the friction of visual communication to make it more fun to communicate visually. You're seeing more and more utility coming to the camera that are causing people to open the camera so many times every day and use it in different aspects of their life. If you go to the left of the camera and our communications platform or chat, as people refer to it, I think we're finding new ways to build utility and help people communicate and have fun together. We've launched the Games platform and the Minis platforms, which are helping people move beyond just visual communication or chatting but into playing games together and finding new ways to have fun. And of course, the Minis are helping people plan to do things together and new ways to organize themselves with their friends and plan to do things, which is exciting. And then the Stories platform to the right of the camera, one, that's our original content platform. And of course, it starts with the stories that you share with your close group of friends, which is, one, very high-intent viewing but also not something that's typically cross-pollinated into other platforms. So really exclusive to the platform and unique. But I think what's interesting over time as we think about how that platform has evolved is what we've done to build Discover on that. So where your friends' stories might be the hook that brings you into that tab, we've really invested heavily and evolved the Discover platform on that page to give you a whole other variety of options. And that's started to evolve into more premium content, really curated set of publishers that cover a much wider array of publishers and more diversity over time in terms of the geos covered and the interests that are covered. And you've seen us over the years bring more original content there. And then there's been some innovation around really interesting content formats that leverage our unique IP, whether that's around cameos or Bitmoji in that tab. And that's really started to evolve the nature of the content there in ways that are sort of exciting and new so. And of course, we'll talk about, I'm sure, some of the newer platforms over time, but that Stories format really helps and the camera really helps in terms of seeding some of our newer platforms like Spotlight. So there's a lot going on and it's been exciting to see the pace of innovation really accelerate over the last several years and then the overall level of engagement in the community grow in response to that.

Now you've done such an incredible job at building all those different use cases for engagement, giving more users more reasons to use the platform, et cetera. And I would say, it's sort of engagement plus innovation equals monetization. Let's talk about monetization, though, because I know this year has been a tricky year to navigate, in particular with IDFA. So I wanted to sort of dive into IDFA a bit for more specifics. So maybe the first one on IDFA, just talk to us and give us some color about how the IDFA challenges impacted the business and how has that evolved over the course of the year and sort of as you look into 2022?

Yes, sure. Well, I think, first, we've really been preparing for these changes for a year now. It's been more than a year since the changes were first announced. But the changes themselves were delayed several times, so the impacts of that on the business itself came much later than we originally anticipated. And then in addition, the specifics around the changes weren't clear at the time that they were announced more than a year ago. And they evolved over time as we move closer to implementation stage. So the whole industry was really managing against a moving target over the course of the last year leading up to launch, which is challenging. In addition, I think what was helpful is that we did anticipate right from the outset that we would have to make significant changes to both our targeting and our optimization in order to build capabilities that would work in sort of the go-forward world post changes. And we could make some estimates about what was likely to change there. So we got to work early on that front. And the good news there is that we were, because we got started early on those aspects of the changes, we were able to largely close the gap on our targeting and optimization capabilities prior to the launch of these changes. So not completely, but we made a ton of progress, and we were able to see that in our own side. So the measurement gap there was much more challenging to close. Early on, we worked with our advertising partners to adopt SKAdNetwork or SKAN as a potential measurement solution. And advertisers were initially excited about SKAN as a solution. And for good reason, one, SKAdNetwork continues to be the only solution that has access to the legacy signals for the entire audience, but also SKAdNetwork has the ability to look across platform, which is particularly important for a business like ours where we still have a relatively small share of the overall digital advertising ecosystem. So we saw some early promising results with some advertisers spending up against SKAdNetwork early in the going. But it was challenging to know how to evaluate that because advertisers still at that point had access to a lot of their legacy signals to calibrate their spending. As we moved through Q3, though, we saw the adoption of newer versions of iOS accelerate and the limitations of SKAdNetwork became far more apparent as we moved through that period. One, each advertiser has their own parameters that they like to measure their advertising on. And many advertisers have really landed on those parameters after years of testing. SKAdNetwork landed on a set of default parameters for measuring advertising. And this is things like view-through times and look-back periods that weren't necessarily industry standard, but more importantly, don't give advertisers the flexibility to adjust in the way that they might prefer. Many advertisers also run many combinations of campaign and creative that can add up to dozens of combinations. And SKAdNetwork has set a relatively high threshold to return any data about the performance of a campaign creative combination which makes it really difficult for smaller advertisers, people who are running multiple combos, but especially on further down-funnel actions to clear those thresholds. And I think the last thing I would share here that was another limitation that became apparent was that advertisers are used to having historically fairly real-time results on the performance of their campaign so they can tweak and optimize what creatives they're using and where they're putting their budgets. And the time lines for getting results back on that SKAN had been 48 hours or more in many cases. And so it became pretty clear over time that from advertisers, that was not going to be the only solution and may not be the reliable solution for a lot of partners. And fortunately, we rolled out Advanced Conversions, which is one of our newer privacy safe measurement solutions in Q2. And as these limitations became more apparent, advertisers have become much more open to the concept of first-party measurement solutions from the platforms they're running advertising on, which is helpful. So we're already seeing some advertisers find success with our new privacy safe solutions, but it remains early in the adoption curve. And we've got a lot of work to do to help advertisers build their confidence in those solutions so that they can spend to max budgets and max bids over time. So we're encouraged by some early results here, cautiously optimistic, but there's work to do to help advertisers through this process.

That's helpful. No, the detail on the time line is really helpful. You mentioned Advanced Conversions. I know there's also Estimated Conversions is another product. So I know this is a little bit technical, but I think for investors, it is helpful to hear just because we hear so many buzzwords about products and things. Maybe can you just sort of give us the 80-20 or maybe the 70-30 of what do those 2 products, what are they aiming to do? How does it work? And sort of how should we think about the cadence of those being adopted by more advertisers?

Sure. Well, let's talk about how they work first. And before we do that, the one thing I would say is, it's important to remember that we continue to have deterministic measurement data on a large portion of our audience. So one, we believe our opt-in rates have been better than what we've seen widely reported in the industry. But that said, products like Advanced Conversions and Estimated Conversions are going to be really important for advertisers to be able to fill in the blanks and understand the totality of the impact driven by their campaigns. So Advanced Conversions specifically uses cryptographic techniques to measure the aggregate conversion data without directly connecting off-platform activities such as an app install or visiting a website back to any individual Snapchat user. In order to do that, Advanced Conversions leverages a privacy safe data processing pipeline and then techniques such as cohorting to measure and to match those impression data from Snapchat back to conversion data provided by the advertiser in a way that is privacy safe for individual users so. And then Advanced Conversions, as I mentioned before, is a pretty straightforward product for folks to adopt. They can do that through an API, through installing our pixel or through even integration with a third-party measurement partner. Estimated Conversions is a supplemental product that offers more real-time results. And it's particularly helpful for the use case I was mentioning earlier, where you need to get at those lower volume activities that are either very down-funnel actions or if you're trying to measure campaign creative combination results where you've got lots of different cuts. And so advertisers find that helpful for overcoming those 2 issues they're seeing with SKAN. And so we're excited about these 2 products. These are products that can help our advisers in a privacy safe way that protects our communities, individual data, see the actual impacts that are driven by their campaigns in totality but also have the sort of flexibility of measurement and the real-time feedback that will allow them to measure, optimize and target their campaigns. So it's early in the process of adopting these, but we've got work to do. We'll get through helping people with that. In terms of the time line, I know lots of questions about, well, how long is it going to take people to get through this process? And I think part of what you want to understand here is that a lot has changed for an industry that spent years building up tooling and capabilities and confidence in various measurement solutions. And a lot of that has changed in a very short amount of time. So advertisers in many cases have spent years building up tooling that leverages legacy measurement solutions that they use to handle their internal reporting and optimization. So while I explained earlier, adopting our new measurement solutions is fairly straightforward, the process of people building confidence in those and adapting their tooling could take longer. And when I say building confidence, for many advertisers, that could mean things like doing lift studies so that they can see what's coming back on some of these first-party measurement solutions from their advertising partners like Snap, but then also calibrate that back to what they see in their lift studies which helps them build confidence longer term in the use of those new measurement solutions going forward. So that can take a little bit of time. Different advertisers have different approaches to that. One of the things we see is like larger advertisers are often the ones who have more sort of the sophisticated ways of confirming what they're seeing. And so we have a lot of daily touch points with our largest advertisers. So they might be quicker to adopt the new solutions but then they have more advanced techniques for building their confidence in those, whereas you might see a smaller advertiser will take more time to build their awareness and drive their adoption of some of these new solutions, but the techniques that they use to build their confidence in measurement solutions don't necessarily take as much time as something like a lift study, if that makes sense. So each advertiser has got their own journey here through the arc. And our sales teams are really focused on working with our partners to help them through this step by step.

Yes. That's interesting. The larger advertisers that are more sophisticated, they can adopt the new tools faster, but then they want more lift studies and more sort of proof that it's working. And then the small advertisers, it just takes more time. So it still kind of seems like it's more like quarters than months in sort of like fixing this, if you will. At the Analyst Day earlier this year, I know you talked about the next few years of having a 50-plus percent revenue growth. Given sort of everything that's happened with IDFA and all the steps and the blocking tech that you just talked about, maybe just talk to us about how do you think about that 50%-plus growth now and where you end up in '23 or '24 versus where you thought in the spring?

Yes, sure. I think the first answer is, I believe that our longer-term opportunity remains intact here. Specifically, when I think about where we expect the business to be in 2023 and 2024, we believe all the building blocks of that path remain in place. And then if you think specifically about those building blocks and the path to that level of monetization that we talked about at our Investor Day, the big pieces of that were, one, the growth in our community. And our community is growing at the fastest rates that we've seen in 4 years. And in fact, the level of growth that we're seeing in the community has actually accelerated from what we saw at the beginning of the year. We continue to have really deep penetration in the most attractive advertising markets in the world. And you remember back from the Investor Day, that's a really big part of the story is about us capturing share of wallet in these very large mature advertising markets where we already reach really deep penetration of Gen Z and millennial audiences. And then the other thing that we were talking about there in great detail was about our ability to expand our monetization across the platform, including beginning to monetize at scale areas of the app that are either monetized very little or not at all at this point. And so we continue to see, obviously, Spotlight is a natural extension of our already large content business. The Map is something that we haven't really monetized to date and of course, is a natural on-ramp to a whole new set of advertisers for us that we don't really have a deep penetration with today. And of course, we continue to believe the camera is our largest long-term opportunity. And because our app opens to the camera and how frequently our audience is engaging with the camera and the fact that the vast majority of Snapchatters are using our AR on the camera every day, the audience potential and the inventory potential there is already immense. So the building blocks of us getting to where we need to be in 2023 and 2024 remain intact. And if anything, the audience is growing faster and we've had more progress with Spotlight and continue to have really solid engagement in these different spots that we need to monetize over time. I think it's important to understand that the path to getting to that longer-term ARPU opportunity hasn't been in the past and isn't expected to be over time a completely straight line. I think if you look back over the last 2 years, we put up about a 55% CAGR over the last 2 years, but you've got individual quarters where the year-over-year growth was as low as 17% and as high as 116%. As you're building a business, it's natural that you're going to run into some headwinds along the way. And if you think back to, say, early 2020, all of us, all of our communities, our team and our business faced a lot of challenges associated with the pandemic. And one of the things that we did there was to continue to invest against our long-term strategy, continue to hire, continue to build the business, continue to build out the products. And having that long-term focus and staying focused on that during that period really served us well. And you can see it in the momentum that we have with product innovation and with the growth in the community today. And so you're going to see us do the same thing through this period. We're going to continue to invest in the business, stay focused on the long-term strategy and keep building towards that longer-term opportunity that we articulated earlier this year.

Great. It's a very important point about the path there is not always linear and there are quarters that are not going to be there, but you still feel great about it. So that's good color. You talked about Spotlight. And Spotlight really has by a lot of the metrics, our survey data, your data you shared, pretty impressive adoption. Even you mentioned it's sort of, it's done better than you might have thought at one point earlier in the year. So maybe a couple of questions for you. One, what are sort of the latest data that you're willing to talk about from a Spotlight user or time spent perspective? And then the second one that I often get asked is, how do you think about Spotlight driving incremental time spent on the platform as opposed to it cannibalizing other use cases on the platform?

Sure. Well, first, we're really pleased with what we're seeing with Spotlight. As you've likely heard, we continue to evolve this product and tweak our Creator Fund over the last year as we continue to evolve the product and try to diversify the content sources and also stimulate the content sources in new markets as we've expanded this product into new countries. And that's really worked for us. We're pleased with what we're seeing. We mentioned in Q3 that we actually saw the submissions double quarter-over-quarter, which is obviously a good validation of what we're doing there to stimulate the creator side of things. Engagements also remained really strong. So we shared that we saw sequential growth in both the number of daily active users on Spotlight but also the depth of time spent per user. And so that's important. This is a product that's coming up on a year old. And so really pleased that we've been able to make that kind of good progress with both engagement and both sides of this platform, the creator side as well as the audience engagement. In terms of how it fits into the overall picture, I would say Spotlight and Discover are really different platforms. Spotlight is increasingly becoming a great way to discover the very best of the billions of snaps that are taken and captured with our camera every day. Discover is really a product that's about your favorite creators and publishers that you're following, catching up with your daily subscriptions. These products are a very different use case. And I think what's interesting and what we're excited about over time is the ability for these things to help one another. You can imagine over time people discovering new creators in Spotlight and then following them and having them start to show up as part of their daily subscriptions on Discover. And so in that way, this is a great example of, as we're able to build our platforms and have connections between them, it makes each of them stronger together. And so that part, I think, is exciting. So it's early with Spotlight, but we're pleased with what we're seeing so far and how it's coming together as a two-sided platform.

Understood. It's early. You're pleased with what you're seeing. You're not alone in this space. You have Facebook with Reels. YouTube has Shorts. TikTok is out there. And I would imagine throughout the 2022 budgeting season, all 3 of those platforms are selling ads around their product. So maybe just talk to us philosophically, how do you guys think about monetization of Spotlight and how should we think about the cadence of that potentially starting to come into the model?

Yes, sure. Well, the first thing I would say is, I'll take you back, if you remember, our Head of Engineering, Jerry Hunter, at our Investor Day gave a presentation about how we've modularized our tech stack over time so that it's quicker for us to be able to build platforms like Spotlight, but also so that we can build connections into the other aspects of our platform right out of the gate. And so this is a great example where from the outset of building Spotlight, we were able to build the connections into our advertising platform right out of the gate. And so the technical work that's required for us to begin testing and then monetize over time is relatively limited. I think at this point, we don't feel the urgency to monetize Spotlight just yet. We continue to be focused on making sure that we get the product experience great and really building that core product experience for the Snapchatter and for our creative community. But that said, we remain really excited about the potential for this platform to add to our ARPU opportunity in the future. And we'll get to it when we're ready, but we don't feel urgency to monetize it in the very near term.

Okay. That's helpful. Let's talk about the areas you are monetizing, Stories, Discover, et cetera. So let's talk about Stories. Stories has been a lot of success, both from an engagement and from a monetization perspective. Maybe talk to us about, in your mind, what have been some of the more material advancements or changes to Stories that have really fueled this engagement and monetization? And what are the areas you're most focused on to continue to improve in the Stories area into 2022?

Sure. Well, one, the Stories format really was the original content experience for our fourth tab. And it remains a really important part of how Snapchatters share their snaps and the stories they've created with their close friends and group that they have established on Snapchat. So that remains a really important part of the experience. I think some of the things that have evolved here that are really critical is, if you go back to the redesign in 2018 and really separating out the friends stories from community content, from celebrities and publishers and so on was really important to that format. So that you've got an experience that is you and the things that you've created and your friends have created that's separate and on its own. That's been really important to the development of that product. And then that's, of course, allowed us to invest behind that and helping develop all kinds of new story formats within Discover, whether that be things that we're doing with your Bitmoji and cameos to create stories that feature you and your friends or whether it's professional publishers and some of the original content that they've developed. So each of those are, all of these things are important to building out that overall Stories platform on the fourth tab. And then, of course, we've continued to innovate around this format and bring what we're seeing from a Stories format into Spotlight and giving a new outlet for people to share what they're seeing, what they're creating and their stories with the broader audience there.

Okay. A lot of innovation there to come. Let's talk about Discover. Discover is a product you guys launched 2015, so 5, 6 years ago. There's been a lot of experimentation and evolution of the content on there, third-party content, unscripted shows, scripted content, Snap Originals, et cetera. So they are pretty impressive. I think you have, I think the last stat was 25 different channels having 20 million-plus viewers on them. So you have engagement in these. I want to ask you sort of at a high level, talk about how Snap's video strategy has evolved from a content investment perspective. What's working and what hasn't worked as well? And then how do you think about areas of investment in content into 2022 to sort of keep fueling global Discover engagement and monetization?

Sure. Well, first thing I'd say is that the goal for Discover is to build a sustainable content ecosystem that serves our community with great content, serves our creators with a great outlet with lots of audience and viewership. And then lastly, for our advertising partners to reach an audience at scale. And we're excited because that's part of turning these things into platforms is having the multisided ecosystems that are sustainable. I think what's really important about what we're doing in Discover is that we've taken a curated approach to our content selection. We are bringing in high-quality publishers with community content from verified personalities and having that content really be designed for mobile, whether that's from publishers or from our original formats. And all of that has made Discover a relatively unique proposition in this sort of digital video ecosystem. We're continuing to invest pretty heavily in Discover. One, we've been growing the number of channels and the number of different interests that we serve much broader over time. And we've also been making a lot of investments to grow the number of new markets that we're serving and the variety of content in each of those markets so that the Discover experience really feels unique to the community that you're in, regardless of where you are. And as you mentioned, the engagement has been really robust. As we started to build out lots of new content verticals and categories and markets, we've been able to see a lot of different categories achieve really significant audiences. So in Q3, as an example, we had 15 partners who reached more than 50 million Snapchatters in the period. And there's been a wide variety of interest categories that have drawn really large audiences. So for example, health and fitness has drawn 65 million viewers a month in Q3. The beauty content category has drawn more than 75 million. And the entertainment category has drawn more than 120 million, so really big audiences across a broad set of different categories. And then you mentioned international and the investments we're making to feed the international playbook there. We have more than 400 international content partners now spread across 19 different countries. So the work there to help make Discover richer and deeper for Snapchatters around the world is really starting to take shape.

Got it. That's helpful. I want to talk about monetization on Discover. Based on our agency conversations, the advertisers we talk with, it still sounds like Discover CPMs are in the low double-digit range today. One, any response to that? I'll go on, but that's a pretty big discount versus what we hear about on CPMs versus other video platforms like YouTube or Hulu or Roku, et cetera. I know you rolled out a series of different ad formats and monetization tools around Discover, we think about Snap Select, First Commercial, et cetera. I guess my question is, what are some of the main hurdles that you're encountering from advertisers from adopting Discover at higher rates? How are you trying to solve those? And is there any structural reason that we should be thinking about as to why you couldn't monetize Discover at similar rates to some of those other video platforms?

Yes. Great questions. First, I think the context here of how hard it is getting to reach our audience, the Gen Z and millennial audience with traditional TV, that's just become incredibly hard. And so one of the great things about our video platform is that we really have deep, deep penetration of these audiences in the most compelling advertising markets in the world. And it's getting much harder to reach them in the places that people have traditionally tried to do that. And two, our video ads are full screen. They're more easily targeted than traditional television advertising. And they're also more measurable, frankly, as well. And so we think we're building a great video proposition for our advertising partners. We're also somewhat unique among the ad-supported online video business given that the content that ads appear next to on Discover is curated. Products like Snap Select also can add to that where they give customers to target even more exclusively the content that they're appearing next to, which can give advertisers a lot of confidence about the type of content that their brand is appearing next to and a Discover experience that is curated with our Select publishers and partners. We've also innovated as you mentioned in various ways, including with First Commercial, which is a product that allows advertisers to get that all-important first impression with their commercial product. So to your point, I think when you think about the quality of our video advertising products and the quality and depth of our audience and really hard-to-reach demographics and our ability to grow share of wallet with our advertising partners here, I think we've got a long way to go here in terms of growing the content business itself. We talked earlier about that longer-term journey to monetizing the camera more and eventually monetizing the Map and extending our content business to Spotlight, but it's important to remember, there's still room to go here on our more traditional content business that makes up the majority of things today.

Yes. The last thing I want to ask about is augmented reality and the lenses. A lot of discussion about the metaverse nowadays. Actually, you've done a lot when it comes to augmented reality with the Lens Creator Kit and sort of getting advertisers to experiment, et cetera. I would be curious to hear on the engagement and the monetization side, where have you made the most progress? And then as you sort of think about the gating factor to more advertisers adopting this, lenses as a way to advertise, how do you think about that? Where do you really have to sort of invest to clear those hurdles? Roblox said yesterday, in the next 3 to 5 years, all brands are going to have a Roblox strategy. What do you have to do for the next 3 to 5 years, all brands have an AR strategy?

Yes, sure. Great questions. First, we believe the greatest long-term opportunity for our business is compute overlaid on the world around you. We've articulated that in some detail at our Investor Day and we talk about it each quarter. But over the long term, that is the greatest opportunity for our business we see. So when I think about the progress that we're making there, one, I'd say we've made a lot of progress on what I would consider 3 of the most basic building blocks here. One is the fundamental AR technology, which is the ability to overlay augmented reality experiences on the world around you, whether that's yourself or the space that you're in. The ability to move 3D objects accurately through that space. And then, of course, Scan, which allows you to understand what's in your space and discover more things about it with the connection back to the Internet. The second is creating a really robust Lens Studio platform and a large creator community using that platform so that we've got lots of creative people creating, building experiences on top of Lens Studio to take advantage of all of that technology. We've already got 200,000 lens creators who have used Lens Studio, and they've created more than 2 million lenses. So you've got a great foundational set of technologies that are constantly being invested in. And then you've got a large creator community and a creation platform for them that's built out in Lens Studio. And then lastly, it's really important that we have a huge amount of engagement to create a feedback loop and make this a multisided camera platform. And so we've got more than 200 million Snapchatters using AR each day. And so those 3 big building blocks are really important, and they feed on one another. I think more recently, we've made a lot of really exciting progress with Camera Kit. And when you think about our goal long term being to have compute overlaid on the world around you, the more that we can get people using our camera, whether that's in our application or beyond your application, that's going to bring us closer and closer to delivering this vision and also driving that flywheel that I just mentioned on the overall camera platform. And so we've already had Camera Kit integrations with companies like Disney and Bumble. And then, of course, separately, we've recently announced our partnership with Google related to the Pixel 6 phone, which creates even easier accessibility to our camera. And this is all about getting the distribution of the camera and the accessibility to our camera platform as broad as possible. So we've been making a lot of investments there. You can see the product road map evolving pretty quickly there. I think in terms of priorities for us to really expand the monetization opportunity, one there, I think a lot of it is about making it easier and cheaper and more accessible to create AR advertising experiences. One, we've made some acquisitions over the last year, including Vertebrae, to help accelerate that process. Vertebrae is a platform that will make it easier for brands to manage and deploy their AR assets but also to develop shopping experiences on Snapchat. And we've also just announced our global creative AR studio, which we've called Arcadia, which is going to further help bring AR experiences for our brand and agency partners. So there's a lot that we've been doing here to make it easier for our partners and cheaper for our partners to bring AR experiences and manage them and deploy them. And so excited about the progress that we're making on that front to really bring forward the road map, both from a Snapchatter perspective and the products that they're engaging with every day, but from an advertiser product and how easy it is for them to bring AR experiences to life. So there's a lot going on in this space. It's one of the areas that we've been really focused on investing in and part of that longer-term focus I mentioned earlier in terms of getting to where we want to be in the years ahead.

Great. There's a lot of innovation on the platform, always a lot going on. We're excited to continue to watch and study everything you guys do. So Derek, thank you so much for taking the time, a very insightful discussion, have an excellent rest of the day. Thank you, everyone, for watching Zoom. Hopefully was a productive hour and enjoy the rest of the conference.

Thanks for having us, much appreciated.