HOUSE_OVERSIGHT_014922.jpg

Our $25 PO is based on our DCF model as we do not expect the company to be profitable until mid- to late-2019 and any earnings-based valuation exercise would require discounting back future earnings. Our DCF assumes approximately $28bn revenue by 2027 based on 525mn DAUs and $50+ in ARPU. Our PO implies 15.5x EV / Revenue, above the peer group at 4x, as we believe Snap's early stage of ad monetization and potential future leverage in the business model warrants a premium valuation multiple to the social media group. . Bankof America 36 Internet/e-Commerce | 06 April 2017 Merrill Lynch HOUSE_OVERSIGHT_014922