Snap Inc. Files for Long-Awaited IPO, Warns It ‘May Never Achieve’ Profitability

Snapchat parent Snap Inc. filed for an initial public offering Thursday, describing itself as a camera company and warning investors it may never be profitable.

The company had a net loss of $515 million in 2016, according to its S-1 filing. That’s a bigger loss than the $373 million Snapchat bled in 2015, although its revenue jumped from $59 million to $405 million. But with 158 million daily active users as of December and a demographic sweet spot squarely in often TV-averse teens and tweens, the social network shouldn’t have much trouble attracting investors — even as it warns them it’s not expecting profitability any time soon.

“We have incurred operating losses in the past, expect to incur operating losses in the future, and may never achieve or maintain profitability,” Snap said in the filing.

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Snap also described itself as a “camera company” — not a social network — in the filing.

“In the way that the flashing cursor became the starting point for most products on desktop computers, we believe that the camera screen will be the starting point for most products on smartphones,” the company said in the filing. “This is because images created by smartphone cameras contain more context and richer information than other forms of input like text entered on a keyboard. This means that we are willing to take risks in an attempt to create innovative and different camera products that are better able to reflect and improve our life experiences.”

Aside from the fact that the company doesn’t appear close to turning a profit, Snap’s IPO is also unusual given that founders Evan Spiegel and Bobby Murphy will retain control over all stockholder decisions.

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“Although other U.S.-based companies have publicly traded classes of non-voting stock, to our knowledge, no other company has completed an initial public offering of non-voting stock on a U.S. stock exchange,” Snap said in the filing.

Snap is seeking to raise up to $3 billion in the offering. CEO Spiegel rejected a $3 billion takeover offer from Facebook in 2013.

Sony Entertainment CEO Michael Lynton is stepping down to focus on his role as chairman of Snap’s board, as the company prepares for life as a public company. Snap will trade on the New York Stock Exchange under the ticker symbol SNAP.