RE: SBC
As for earnings, if you look at SNAP stock-based comp expense section you can see it is embedded in the COGS, R&D, S&M, and G&A section. The other hit is if equity packages are cash settled so instead of getting stock they just get paid out as cash right at the vesting period.
Aswath Damodaran has taught that SBC is an in-kind expense and thus if you look at FCFE or FCFF you should not be adding this back in as you would essentially be arguing that you can stop paying employees. So unlike D&A which are not real uses of cash and are added back, SBC should not be added.
As for SNAP if we look at the 10-Q from the same period in 2024 the A shares had 1,423,056,065 outstanding (not accounting for dilution) and in recent 10-Q they have 1,465,208,378 - ~3% increase in A shares in one year.
Your analysis of SNAP is indeed correct.
-Sean
EDIT: All this with $500.573M in common repurchases in 2025 - front door buy-backs taking place here. |
