The Snapchat ghost is displayed during the TechFair LA job fair in Los Angeles, California, U.S., on Thursday, Jan. 26, 2017. Filings for U.S. unemployment benefits rose more than forecast last week amid holiday-related volatility, while remaining low by historical standards. Photographer: Patrick T. Fallon/Bloomberg
SAN FRANCISCO: Snap Inc’s initial public offering filing seemed to show a company with a basic math problem: the company's cost of revenue for 2016 – the amount it had to spend just to keep the messaging service running – was US$47mil (RM208.09mil) higher than its US$405mil (RM1.79bil) in sales.
The high cost of revenue, which in Snap's case consists mainly of payments to Alphabet Inc's Google for hosting the service, means that, on an annual basis, Snap lost money on every one of its 158 million users in 2016, even before accounting for salaries, office rents or anything else.
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
