Snapchat’s parent company Snap Inc. set in motion what could be the biggest tech flotation in years by revealing it generates over $400 million in annual sales and has 158 million people using its app on a daily basis.
The Los Angeles-based company released the financial details in its filing for an initial public offering on Thursday.
- The company filed for a $3 billion IPO, though that is a placeholder amount and certain to change as the company sets a price on the deal. In the filing, Snap disclosed that Snapchat has 158 million average daily active users as of the fourth quarter of 2016. It had annual revenue of $404.4 million in 2016, up from $58.6 million in 2015. The IPO filing shows Morgan Stanley, Goldman Sachs, JPMorgan, Deutsche Bank, Barclays, Credit Suisse, and Allen & Company are among the banks working on the share sale. It plans to list its shares on the New York Stock Exchange under the ticker SNAP.
Now that its financial statements are public, the company must wait 15 days before holding formal meetings, aka the IPO “roadshow,” with investors. Snap is planning to list shares in March, and could fetch a valuation of as much as $25 billion, people familiar with the matter have said. 
The company’s 26-year-old CEO, Evan Spiegel, will be the focus of the message that management conveys to investors in those meetings, people familiar with Snap’s roadshow planning have said. He will be framed as a visionary, similar to how Facebook CEO Mark Zuckerberg was depicted before that company’s flotation.
Spiegel owns 21.8% of the company’s class A shares, the filing shows, making him the largest shareholder along with cofounder Robert Murphy who owns the same number of shares. They also own class B and class C shares.
That Snap would go public has been a foregone conclusion on Wall Street and in Silicon Valley for months. The company last year added a seasoned IPO specialist to its board and then changed its name from Snapchat to Snap in a move that it said was meant to speak to public investors.
"You can search Snapchat or Spectacles for the fun stuff and leave Snap Inc. for the Wall Street crowd :)" the company said in a blog post in September.
Snap's business is quickly evolving from the chat app that gave it its name. It has increased advertising and added news, and last year it began selling its Spectacles, eyeglasses that can take photos and record video.
Still, as Snap begins to meet with investors, it will need to explain what its total addressable market can be - outside of the millennial demographic it's already popular with. It will also have to lay out a vision for how revenue can grow from less than $1 billion to many billions.
The company did report meteoric growth in sales, which comes from advertising on the platform. Annual revenue of $404 million is up from just $58.6 million in 2015, the filings show. It grew daily active users by almost 50% in the past year.
Still, its losses are also growing - to $514 million in 2016, from almost $373 million a year earlier. And the angle Snap chooses in pitching itself to Wall Street will be important. The company's recent foray into hardware and its new identity as a "camera company" could cause investors to value it differently than a pure-play internet company, where profit margins are typically higher.
"We believe that reinventing the camera represents our greatest opportunity to improve the way that people live and communicate," the filing reads. "Our products empower people to express themselves, live in the moment, learn about the world, and have fun together."
Snap said it plans to use the IPO proceeds for "general corporate purposes" and that it may use a portion for acquisitions. It doesn't have any deals in place right now.
Alex Heath contributed reporting.