Grim picture: Snapchat is losing a lot of money, leaked documents show

Mike Dempsey of venture capital analytics firm CB Insights describes this red ink as “big for 11 months, but not outrageous”, adding that “if Snapchat is at a similar point right now in its business lifecycle as 2012-2013 Twitter, the new funding probably gives them a multi-year runway”. Uber’s financials were recently leaked by Gawker and it too is severely unprofitable which led the company to release a statement: “Shock, horror, Uber makes a loss.”

Snapchat lost $128 million in the first 10 months of 2014, according to documents obtained by Gawker. The largest expenses, excluding payroll, were $47 million spent on product and $13 million for a line item titled “outside services”.

To be somewhat fair to Snapchat, the company only started selling advertising in October, so the $3 million figure only covers a short period, but as Gawker correctly notes “even if we round generously in Snapchat’s favor and call it $3 million per month in ad income, that that wouldn’t come close to overcoming Snapchat’s costs”. The company is spending hardly anything on marketing – about $600,000.

The period also doesn’t cover the roll out of Snapchat’s curated content feature Discover, which we panned when it launched, and has not been performing particularly well for the company given it was forced to put the feature front and center on the app given many users simply weren’t using it. It also reports the company is aiming for million in revenue this year and more than $200 million in 2016.

Snapchat’s media partners say traffic to the new Discover page in the Snapchat app started strong when it was introduced in January and fell off dramatically after the initial surge of interest. It has had a lot of turnover on its business side, losing key executives like former Instagram chief Emily White as its COO. The startup now has more than $US320 million in cash, according to Biddle’s document.

Fortunately, Snapchat is doing a good job of managing its cash.

For starters, Snapchat wasn’t bringing in revenue for the vast majority of the year, so it’s no surprise it spent a lot more than it brought in.

Snapchat did not immediately respond to Breitbart News’ request for comment.