Facebook spent only 8.3 percent of revenue on G&A in the quarter before its IPO in 2012, and spent almost twice as much on R&D and sales and marketing. G&A accounted for 13 percent of Twitter's sales just prior to its IPO, while R&D made up over half.
Among other internet companies, Yelp spent 21 percent on G&A before going public, while Pandora and LinkedIn each spent 14 percent. Winding the clock way back, Google spent only 3.7 percent of revenue on G&A prior to its 2004 IPO.
Snap didn't provide much clarity in its prospectus. It said G&A consists of personnel-related costs, "including salaries, benefits, and stock-based compensation expense for our executives, finance, legal, information technology, human resources, and other administrative teams, including facilities and supporting overhead costs, and depreciation and amortization."
Headcount in G&A increased 220 percent in 2016, slightly faster than the company's overall employee base, which jumped 210 percent to 1,859. To accommodate all those new bodies, Snap has been opening offices in the U.S., Europe, Asia and Australia.
A spokesperson for the company declined to comment beyond the filing.
Perhaps some of the high costs were tied to the launch of Spectacles, the sunglasses-camera combo that Snap introduced late last year. And there were also accounting and legal expenses related to IPO preparation. But G&A was consistently high even before that.
One important factor is that Snap is going public at a very young age. The company was founded in 2011 by two Stanford University students, Evan Spiegel and Bobby Murphy, and as recently as early 2015 was generating just a few milliondollars in revenue per quarter.