Snap Inc, owner of the popular messaging app, Snapchat, has made an array of its financial details public for the first time on Thursday, ahead of its impending $3 billion initial public offering ("IPO"). The Los Angeles-based company reported that it generated $404.5 million in sales in 2016, up from $58.7 million in 2015. It had a net loss of $514.6 million in 2016, up from a net loss of $372.9 million in 2015.
Snapchat's valuation has reportedly grown in the last few years as the company added advertising and sponsored contents to its messaging service. The company has told investors to expect $1 billion in advertising revenue in 2017, according to sources familiar with the matter.
According to reports, Snap is slated to go public in as early as March and is expected to be valued at between $20 billion and $25 billion. That would give the company the largest valuation in the U.S. since Chinese e-commerce giant Alibaba Group Holding went public in 2014. Snap said it will list on the New York Stock Exchange under the ticker "SNAP.”
The financial reports come on the heels of Snap Inc. being named in a lawsuit by a former employee who claims the company inflated growth metrics ahead of its IPO. According to Anthony Pompliano's complaint, which was filed in January in Los Angeles County Superior Court, he was lured from Facebook in 2015 to Snapchat to focus on user growth and engagement and was fired after he refused to go along with inflated figures to make the company look better.
Pompliano says he was recruited from Facebook based on the false metrics, and when he urged Snapchat to correct them, he was fired after only three weeks on the job, according to the complaint. He also believes he was hired so Snap would receive confidential information about Facebook, which he refused to give, he said. The incident has prevented him from finding employment elsewhere, he says.