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Snap Inc. (NYSE:SNAP) J.P. Morgan’s 50th Annual Global Technology, Media and Communications Conference Call May 23, 2022 5:10 PM ET
Company Participants
Evan Spiegel – Co-Founder and Chief Executive Officer
Conference Call Participants
Doug Anmuth – JPMorgan
Doug Anmuth
Alright. We’re going to go ahead and get started. So I’m Doug Anmuth, JPMorgan’s Internet analyst. We’re pleased to have with us today, Evan Spiegel, Co-Founder and CEO of Snap. Snap is a camera company, focused on improving the way people live and communicate. Snapchat camera is one of the most used cameras in the world. It empowers people to express themselves, live in the moment, learn about the world and have fun together. The company has 332 million daily active users, had revenue north of $4 billion last year, 250 million DAUs engaged with AR every day on the platform, and that drives more than 6 billion AR lens plays daily. Evan co-founded Snap in 2011, while at Stanford University. Welcome, Evan.
Evan Spiegel
Thank you so much. Great to be here.
Question-and-Answer Session
Q – Doug Anmuth
Thank you. Alright. Let’s start. So Snap has evolved a lot as a company. Many think about it for messaging and communication and chat where the bulk of the time is spent, you believe Snap is a camera company, and you’re at the cutting edge of AR. How do all these capabilities come together? And what do you think is most differentiated about the platform?
Evan Spiegel
Yes. It’s such a great question. And Snapchat itself has evolved so much in the last 10 years that people often don’t know where to start. We began with communication, visual communication using our camera, so people could send videos and photos back and forth to express themselves. We evolved into Stories, which is a way to stitch together all the snaps you make into a visual narrative, which you may have encountered on almost every other platform by now. And of course, then we created a Map where you can see what your friends are up to and answer the question, hey, what are my friends doing? Can we hang out? How far away is carpool when they’re coming to pick up my student? And of course, most recently, with Spotlight and all of our investments in our augmented reality platform, so the reason why we talk about the camera being so important to our vision and so important to Snap is because it really represents a huge opportunity for changing the way that people live.
When we first started Snapchat 10 years ago, people thought of the camera really as a way to document things, and that’s how the camera has been used for 150 years. Now just in the last 10 years, the majority use case for the camera is communicating. And looking ahead at the next 10 years, we believe that the camera is going to be used more and more for augmented reality and people’s day-to-day lives. So when we talk about being a camera company and investing in the camera, it’s really because we see the camera is an incredibly useful tool that is capable of so much more than just capturing photos and videos. And we thread that through all of the different products and services that we provide.
Doug Anmuth
Okay. So let’s see, a big topic, we may as well just kind of jump in. Macro is a huge topic obviously out there across all companies. So just thinking about kind of recent current trends, growth in 1Q slowed from 44% prior to the Russian Invasion. You talked about 32% for the rest of the quarter. You outlined the first 3 weeks of April at around 30% growth. And then 2Q overall, you put it 20% to 25%. So what are you seeing in terms of the macro environment? And how is it impacting both consumers and advertisers?
Evan Spiegel
Yes. Well, the macroeconomic environment has definitely deteriorated further and faster than we expected when we issued our guidance for the second quarter. So even though our revenue continues to grow year-over-year in the second quarter, it’s likely that revenue and EBITDA will come in below the low end of our guidance range. So certainly something that we’re working through along with many other businesses that are impacted, of course, by the supply chain issues, inflation, concerns about interest rates, the war in Ukraine, et cetera. So there’s a lot to deal with in the macro environment today, but we’re staying focused and really on the long term and investing through it.
Doug Anmuth
So given that change in kind of further deterioration, what does that mean for how you think about your investment spending through the course of the year? You certainly framed 2022 as a big investment year essentially. Do you keep all of that intact or does any of that kind of get curved along the way?
Evan Spiegel
Well, we have an enormous long-term opportunity and a really strong balance sheet. So our general perspective and strategy has been to invest through it. And of course, we’ve seen other volatile moments in the life of our company over the last 10 years. And time and again, when we just stay focused on our priorities, continuing to invest against the long term, that’s really what’s allowed us to grow the business that we have today. So while we are changing some of the pacing of our hiring, for example, this is certainly going to continue to be a period of significant investment for the business.
Doug Anmuth
Okay. And it sounds like – I mean, macro is kind of some of the recent iOS changes have somewhat like bled into macro in a way. You’ve worked through those recent iOS changes pretty well. And I think you now have 1P solutions enabled with more than 90% of direct response ad revenue, those marketers. How do you think about Snap’s ability to fully recover lost signal on the platform? And is that related at all in terms of what you’re saying with 2Q and what you’re seeing for the quarter?
Evan Spiegel
We certainly made a lot of progress with our first-party measurement solutions. It’s something I think the entire industry is grappling with. And we may never fully recover all signals. So if you think about it, there are basically 2 different types of people that use Snapchat. They are opt-in users and opt-out users. And so we take opt-in users who have opted into receiving personalized advertisements and allowed us to collect more information about the way that they use our service, and we use that to model what’s happening with the opt-out audience. And we offer solutions like deeper integrations like conversion API and the Snap Pixel to help advertisers better measure the return on investment of their advertising campaigns. So while we made those solutions available, we’re still working on driving adoption. I think the bigger challenge is just trying to build that familiarity and trust with these new solutions because it’s a big change in terms of the way that advertisers have been thinking about measuring their return on investment over the last 10 years. So it’s a big change. We’re working through it, and we’re happy with the first-party solutions that we’ve been able to provide.
Doug Anmuth
And there is a lot of discussion in the market just about further iOS changes and what could come with iOS 16. How do you think about any potential kind of further risk there, limiting IP addresses and kind of fingerprinting technique comes up a lot in discussions with investors. Does that impact Snap at all?
Evan Spiegel
We don’t collect IP addresses for our opt-out users. So it’s something we’re definitely thinking a lot about and preparing for. I think that is a potential likely next step. And that’s why these privacy-preserving first-party measurement solutions are so important for our business and for our advertisers.
Doug Anmuth
Okay. Let’s jump back to product. We’ve seen significant product innovation in recent years across AR, Discover, MAP and other areas. What excites you most kind of over two different timeframes, like 12 to 18 months and then when you think kind of 3 to 5 years?
Evan Spiegel
One of the most exciting things we’re focused right now are investments in our AR developer platform. So we’re making it a lot easier for developers to build really rich and engaging experiences in augmented reality. So not just sort of fun effects that you use to make a cool video but truly immersive experiences, whether that’s Trion for shopping or playing games together connected with your friends in the same environment, all of these tools have become a lot more advanced. And so at our Partner Summit recently, we announced a new set of services called Lens Cloud. Those provide location-based services, which LEGO is using to basically build this whole LEGO world all over London. We have things like multi-user services, which will allow real-time connectivity for things like gaming and shared real-time experiences together in storage services, which allow people to store assets in the cloud and pull them down to provide much more immersive lens experiences without really impacting the performance of that initial lens engagement. So all these sorts of cloud services are really going to extend what’s possible with our augmented reality platform.
And so building on that, if you look to the next 3 or 5 years, one of the things we are very focused on right now is called camera kit. So we package up all this amazing AR technology our camera, the lens cloud services or on Studio. And we take that technology and we allow other companies to embed our camera in their own applications. So we have done really exciting things, for example, with Disney at Disney World. So you can go to Disney World and open up location of where AR lenses and use them with the service, which has allowed Disney to provide a much richer park experience for their guests and also to generate revenue by packaging these unique AR experiences together with their added value park services called Genie Plus. So that’s just one example. We’re also taking that camera kit solution and making it available to retailers because what we found is that when people can visualize themselves wearing different products, it improves conversion rates for retailers, which is a really exciting application of augmented reality. So over the next 3 to 5 years, by making these AR tools available to so many other businesses, we’re really going to expand the way that our AR platform is used.
Doug Anmuth
How do you get compensated for camera kit? I know it’s still super early and you’re kind of just getting the applications out there. But how does that evolve kind of over time?
Evan Spiegel
Right now, we are really just focusing on broadening adoption. The reason why we started building Camera Kit is because so many of our partners were building lenses and distributing them inside of Snapchat, and they were saying, oh, wow, this is viable. This is really helping me drive sales. I’m engaging my customers in totally new ways because they can try on my beauty products. I really want this in my own application. And this is so important to my business that I can’t just rely on reaching customers through Snapchat, I have to be able to reach them through my owned and operated properties in augmented reality. So we started working on camera kit package that up made it available for applications. We’re testing it now for the web as well, which is very exciting. And longer term, I think there will be other interesting monetization opportunities. But for now, what it does is broaden adoption of augmented reality and then helps people who have brought all of their assets into augmented reality on our platform by distribution on Snapchat because we have an AR advertising product. So if you want to reach more people with the AR lenses that you create, you can buy distribution through our service.
Doug Anmuth
Okay, great. Let’s talk about Discover. More than 500 million users have watched shows on Discover. I think daily time spend for users 25 and above increased by 25% and year-over-year in 1Q. What are the key drivers of the growth that you’re seeing on that platform?
Evan Spiegel
There are a couple of things that have made a big difference. I think one is localization. So we’re now working with so many different content partners all over the world. And in our model, we have a closed content platform. So we decide what can be distributed on Snapchat, and we share revenue with our content partners, which allows them to reinvest in making better and more engaging content for our community. So broadening that and making content available that’s localized around the world has been really important for us. And then we’ve also invested a lot in trying to improve the way that content is consumed. So we’ve been experimenting a lot with a vertical feet of content because in the past, trying to encourage people to click on these little tiles that aren’t very representative of the content anyways has been really difficult for us. So we’ve had some really positive success there. We’re rolling that out further and just changing that content consumption mechanic for Discover has certainly been very positive. But I think just localization in particular, has been really important, and there is so much demand today for credible and trustworthy content and people know they can find that on Snapchat.
Doug Anmuth
How is that content strategy evolving within Discover?
Evan Spiegel
Well, one of the things that we’re thinking a lot about today is the relationship between Discover and the stories made by Snap Stars and spotlight. And one of the things that we’ve always seen about Discover is that people find content that really resonates with them and then they subscribe to it. So they have their favorite channels or their favorite Snap Stars – and it’s getting harder over time for new channels to find more distribution to get to reach an incremental subscriber. And so with our new product, spotlight that really highlights the best of Snapchat that whether it’s a random video created by someone who then submits it or buy a content publisher, highlighting the best of Snapchat and Discover allows people to find new distribution opportunities and gain more subscribers that then they can monetize in our Discover product. So I think a lot of what we’re thinking about right now is the relationship between spotlight and Discover.
Doug Anmuth
And sometimes, people question some of the quality of content in Discover. How do you think about it just in the context of brand safety and content curation?
Evan Spiegel
There is certainly an opportunity to improve what I would call content merchandising. So when you scroll through the tiles on the Discover page, oftentimes, those tiles aren’t actually representative of the content itself because publishers are competing with one another to get distribution in that page. And so that sometimes means that the headlines are a little more salacious or something like that. But the content itself, I think, is very engaging. And I think that’s where we’ve seen a lot of our success. So that’s why we’ve been thinking a lot about changing the way that we merchandise content, changing the distribution, trying to put people into content-first experiences so they are not choosing a show based on a tiny tile, a static tile that’s advertising that show, but based on the content itself. So content first experiences, I think, are a really important way to get people to see how valuable Snapchat content can be.
Doug Anmuth
Okay. You’ve said in the past that camera and ARs are your biggest opportunity and people interact with AR on Snap 6 billion times per day. Can you talk about the Lenses product and how the advertiser feedback has been?
Evan Spiegel
Absolutely. So, one of the big opportunities that we saw in augmented reality was because people were using augmented reality to express themselves. So they were overlaying all sorts of effects and fashion accessories and things like that and the snaps that they were taking. And we saw an opportunity to not do that with virtual products, 3D illustrations, but actually to do it with the physical products themselves. So rather than a stylized pair of sunglasses, we can now do true size with accurate sunglasses from all sorts of different brands so that people can find things that really look good on them. And so this intersection between fashion try-on and self-expression has been a really exciting place for us to deliver value with augmented reality. So that’s an area where we’ve been very focused, and I think where retailers are seeing success. In particular, with accessories like sunglasses, as I mentioned, with beauty and increasingly, we’re working on clothing trion. So, one of the challenges that we’ve seen growing the AR business is that not everyone has 3D assets for the products that they create. And it really takes a lot of work and a lot of investment to take a 2D garment – an image of a 2D garment and turn it into 3D. So we worked very hard with a company that we acquired to enable retailers to take their entire product catalog that’s full of all these 2D photos, and make those photographs work for. And so now today, you can take one photo using your Snap camera and actually try on all sorts of different products and see how you look wearing close. So rather than looking at a picture of a model who looks totally different than you, you can see how you yourself would look in any So that’s been a way that we’ve been able to scale AR try on, and I think represents how we’re thinking about making those sorts of products much easier to use for advertisers, especially because we see such deep product market fit with retailers specifically.
I think another interesting category is entertainment just because augmented reality is so immersive that can allow you to pretend to be a character from an upcoming movie in a way that helps you connect with that story far more differently than video or other display advertising. So I think augmented reality because it offers such an immersive way to engage, it’s going to be a really powerful tool for businesses. So we’re going really deep in categories where we’re – we’ve already found a lot of success like with retailers and AR Trion, and then we will expand from there.
Doug Anmuth
So what is your kind of broader view on social commerce on the platform? I mean what could this look like kind of years down the line?
Evan Spiegel
Our broader view is that a lot of attention in commerce has been paid essentially to logistics. So what does fulfillment look like? How can we compete on price and on shipping, things like that. And not a lot has been – not a lot of attention has been paid actually to the front-end consumer experience. And so while maybe you’re getting your package faster or at a lower cost and fulfillment has been made easier for all sorts of merchants, the customer experience essentially still looks like scrolling through a page of lots of little thumbnails of different products. And we don’t think that’s a very compelling customer experience. And so what we’ve tried to do is think a lot about how people are going to want to shop in the future with tools like augmented reality because that augmented reality allows you to very quickly go from, that looks like a cool product to, that looks great on me. And what we’ve seen is that, that really improves conversion rates overall for retailers. And when we connect that to fit and size data – it also helps reduce returns for retailers, which improves their margins overall.
And so taking this holistic approach at improving the customer experience by making shopping much more fun and immersive and also thinking through how we can use that technology to improve the merchant experience by reducing returns, I think, has led to a pretty compelling value proposition, at least for retailers to embed augmented reality in their business. So we will continue to focus really on that front-end consumer experience. I think that’s where Snapchat has always differentiated and that’s really where we see the opportunity in e-commerce in the next decade or so.
Doug Anmuth
Okay. Let’s shift gears, talk about users and engagement a little bit. Strong product innovation. We talked about helped you add more DAUs in 2021 than even doing a very strong pandemic-driven. How should we think about the puts and takes around DAU growth in ‘22 and ‘23?
Evan Spiegel
Absolutely. So the core of our community growth is really based on helping people learn how to communicate visually. And we find that people all over the world, once they learn how to communicate visually with their friends and family love it, and they really like to stick with it because it’s so boring to go back to text messages. Seeing a picture of your friend and where they are and what they are doing is just so much more interesting than spending 3 minutes trying to type out a text message to explain yourself that way. And so visual communication is just a massive shift overall in the way that people communicate enabled by Snapchat and of course, a smartphone. So that, I think, is what’s in aggregate driving user growth and really drives a lot of frequency of use of our product because when people talk to their friends, they come into our service all day long, and they discover other parts of our product, like our content business or our map, of course, our augmented reality platform. So the core of it is continuing to help people learn how to communicate visually with their friends, and of course, there are billions of people all over the world that don’t yet do Snapchat and lots of them in our core 13 to 34 demographic. So we’re very focused on continuing to grow in the rest of world regions and then also continuing to acquire new customers here in the U.S. and Europe and really growing with them over time and continuing to provide more value to them through things like our map or content products or augmented reality.
Doug Anmuth
So you mentioned the 13 to 34 year-olds. You actually reached 75% of 13 to 34-year-olds in more than 20 countries. But can you talk a little bit about what you’re seeing in terms of daily time spent per user? And how should we think about engagement across the different tabs of the app?
Evan Spiegel
Engagement across Snapchat has become so diversified, as I mentioned. And – some of it is very utilitarian like checking and seeing what your friends are up to on the map, which we want to help people really accomplish quickly. We want to help them see what their friends are up to, find places that are interesting, very, very quickly. Same thing with our communication product, we really want to help people connect with their friends as quickly and efficiently as possible. And of course, sending a Snap is much faster than typing out a long text message. And so we really help people send rich visual communication as quickly as possible. On the content side of our business, we’re much more focused on time spent, especially because that connects to our revenue opportunity and ad inventory. So when we look at content engagement, what we’re very focused on is continuing to see people engaging with stories from their friends and family because that’s one of the things that brings them to that story’s page and then helping them segue into content from Discover or from Spotlight, maybe once they have watched a lot of stories from their friends and they start becoming more boring because a lot of us, maybe our 300th friend, we’re not as close to, and so we’re less interested in that update about their dog or their baby or something like that. And we’d rather watch entertaining content on spotlight or and Discover. So what we really focus on is helping people watch stories from their friends and family, which really bring them into the service and then helping them transition on the Discover page or spotlight into other entertaining content that they’d like to watch.
Doug Anmuth
Okay. On the competitive front, TikTok has clearly been gaining traction for a number of years, but it’s really only recently that like Facebook and Pinterest, for example, have called it out more publicly. What are your latest thoughts on TikTok as a competitor, both in terms of engagement and competition for users and then also add dollars?
Evan Spiegel
Yes. So from an engagement perspective, at the core of our business is communicating with your close friends and family. And at the core of their business, I think, is really entertainment usually from strangers or influencers. And so I think the core engagement drivers of our businesses are very different, but there are overlap in some areas like spotlight or other content entertainment. And that’s where we will compete with them for advertising dollars. I think the good thing, for example, in the U.S., I think we have, what, less than 2% market share in digital advertising. So there is just a huge amount of headroom in an advertising market that’s growing overall and a lot of room for both of our businesses to succeed. But I think it is important to call out that they do have a very different characteristic than many of our other competitors, which is that their parent company has access to the Chinese market that many companies here in the United States don’t have access to. And so they are able to use their growth in Mainland China to fund their expansion and compete with us in markets like the United States or Europe. And so that’s a very different competitive framework than competing with some of the other U.S. technology companies that monetize through digital advertising. And I think is one of the reasons why people are so focused on calling out that difference.
Doug Anmuth
You have mentioned in the past that time spent on friends stories was declining. Are you seeing improving trends there, or what’s – how should we think about that?
Evan Spiegel
Yes. So, when we look at content, content in aggregate has grown. In Q1, we shared – grew in aggregate year-over-year, mostly driven by Spotlight and Discover. And what we are essentially seeing is that people are watching more stories from people that they are very close to. But then because we have offered more entertaining types of content, when they start seeing stories from people that maybe they are less close to or don’t hang out with as much anymore, they want to switch to more entertaining types of content like Spotlight and Discover. And that’s why it’s so important to offer a really broad content mix in our business because ultimately, the thing that makes a story from your friend engaging is that you are really close to them even if they are maybe not as good at making content as an influencer. And so ultimately, as you get less close to other friends who you have added on Snapchat, you might want to substitute that content with something from spotlight, for example. So, that’s why we really think about that broad content mix overall.
Doug Anmuth
Okay. When we think about the ads business, I think just about North America ARPU, for example, you are still about one-eighth of Facebook, about half that of Twitter. What are some of the drivers that you think about in terms of growing ARPU in your view just on being able to close the gap more over time?
Evan Spiegel
Well, I think when we look at closing that ARPU gap, one of the big drivers is really demand. And that means that we need to continue to provide a return on investment to our advertising partners. And that’s why it’s been so critical over many years to focus on our performance advertising business, which I believe in Q1, but prior to the invasion was growing about 50% year-over-year. So, our DR business has really been a huge driver of our growth over the years and something we have really invested a lot in. And that’s why it’s been such a priority to work through some of the challenges, of course, that we have had with policy changes – platform policy changes more recently. So, as we look towards the future, we are just going to continue to focus on driving return on investment for advertisers, and we are going to work through some of these platform policy changes, of course, and then think about expanding with things like augmented reality and helping more advertisers understand how immersive augmented reality can be and how it can drive their business results.
Doug Anmuth
And how do you think about just kind of overall advertiser count and ultimately, auction density in terms of closing that gap?
Evan Spiegel
Yes. Advertiser count is important, but so are bids and budget. And all of that really, again, comes down to driving ROI. So, that’s what we are just ruthlessly focused on, and we really want our advertising partners to be successful so that they continue to reinvest and grow their business.
Doug Anmuth
And just going back to your earlier comments for a minute, if we think about kind of DR and brand mix, you talked about being kind of majority DR based in the past. If we think about where macro is impacting more, is there any more that you can say just around brand versus DR?
Evan Spiegel
Nothing I can say in the quarter. But one of the things that is always important for businesses and especially in a volatile macro environment is their return on investment. We saw in the pandemic, of course, that brands became much more focused on their return on investment and pulled back on spend that they could measure very clearly. And that’s why it was so important that we had built this resilient direct response business, so we could continue growing our business through such a challenging period of time. So, I don’t know what the future will bring, of course, but that’s, again, why having a performance advertising platform and focusing on return on investment and making our advertising partners successful is so critically important.
Doug Anmuth
Okay. One product I don’t think we have talked much about is Map. So, similar in a way to spotlight in terms of strong engagement, but also very lightly monetized today, if at all, really. Maybe you can talk about the value proposition there and how you think that’s differentiated?
Evan Spiegel
Map is such an exciting opportunity and really started to help people answer those questions that are really annoying that we ask each other all the time, hey, where are you, hey, what are you doing, when are you going to be home rather than texting back and forth about that, you can just open the Map and see what’s going on with your friends. And so we found that, that’s been very, very useful for people. And in the last year, we really focused on the intersection of your friends and places. So, not only where people are, but what place are they at? How can I learn more about that? How can I discover places that are areas with my friends or a new place, maybe I haven’t heard about, especially if I am traveling, but that might be relevant based on my demographic or my interest. So, a lot of our investment recently has really been on continuing to improve that personalized Map experience. I think that’s especially important because every other map that you open today is really built for driving directions and looks the same no matter who you are. And so if we can continue to personalize the map and make it feel like it is made for you every time you open it, we really believe there will be a large business opportunity with local businesses who want to find new customers or want to share special offers, for example, with people that might be interested in those. So, we are still focused on just building that base of engagement, especially around places, but we believe that, that will be a really compelling opportunity over time.
Doug Anmuth
How do you think about – I understand building the engagement, continuing to build the product Map and Spotlight. How do you know when it’s the right time to monetize those products more?
Evan Spiegel
It’s such a good question. With things like Spotlight, for example, the monetization path is so clear because we pioneered the vertical video format, and so that really ports very easily into the Spotlight feed, of course. So, that’s something that I think is relatively easy and something we have been testing and playing around with a lot, but it really lends itself to the way we are already building our business. I think with the Map, we want to be much more thoughtful and deliberate. And every time we have invented a new way of monetizing Snapchat, we really tried to work together with advertising partners. It was difficult in the beginning to convince advertisers to cut video vertically when everything was tiny in horizontal. And it was only until we showed advertisers that the completion rates were 9x higher when you had a full-screen vertical video that people really started doing that more often similarly with augmented reality when we rolled that out in the beginning, businesses weren’t sure how it would drive results for them. But when they saw how meaningful they improved conversion rates were, especially for retailers relative to the other ways that they were marketing their businesses, we saw a lot more engagement and investment. So, with the Map, we are going to take a similarly thoughtful approach. We are experimenting a lot right now, learning a lot about the way that our community wants to engage with local businesses, and we will partner together with advertisers to build out something that’s unique to Snap and drives a lot of value, not only for our community, but for our advertising partners as well.
Doug Anmuth
Okay. So, I was hoping you were going to bring a Pixy here. Maybe walk around stage, but you didn’t. But you recently hosted your Partner Summit, debuted the drone like product called Pixy. Maybe you could talk more about the product and how it ties into your platform?
Evan Spiegel
Absolutely. So, we are always playing around with cameras and trying to figure out what else is possible through the lens of the camera. And one of the things we learned from spectacles, which really the first generation that put a camera in glasses, the more recent generation, of course, is a full-fledged consumer-grade pair of AR glasses. But the first version just had a camera inside of it. And immediately, what we saw was that people started creating totally different types of content because their hands were free, and it was a totally different type of perspective that was really freeing. And so we started wondering what other perspectives could cameras provide. And drones have always been very interesting to us because they are very bulky, borderline dangerous. In many countries, you have to get a permit to learn how to fly them. And yet the people are willing to do that because the perspective is so exciting and engaging. And so we thought about what would it look like to try to give people the utility they get from a drone, but really with a device that feels like Tinkerbell is your personal photographer, what would that feel like. And so we experimented a lot with the tiny team for many years. And now we have Pixy, which is a free flying camera. It takes off and lands in the palm of your hand. It has preset flight paths that follow you around, orbit you, pull back and reveal the scenery behind you. And it’s been so fun to see the moments that people are able to capture when they are hands free and they can play around it. For me as a parent, it’s hard for me to get videos playing together with our boys. But with Pixy, not only is it a blast to have them chasing it around, but we are also all in that moment together. And that’s something we wouldn’t be able to capture otherwise and certainly wouldn’t be able to capture with the traditional drone, which I would be too concerned to have around our 3-year-old and 4-year-old, so.
Doug Anmuth
Okay. So, last question. What will Snap look like in 5 years’ time?
Evan Spiegel
How in 5 years, I think in 5 years, people will really start understanding Snap as an augmented reality platform. And people have always known that Snapchat opens into the camera, but they are just at the beginning of understanding what’s possible through that camera. And so I think 5 years from now, people will talk about Snap much more as an augmented reality platform and use it in their daily lives to do things far beyond communicating.
Doug Anmuth
Okay. Cool. Alright. We are going to leave it there. Thank you, Evan.
Evan Spiegel
Thank you so much.
