Mr. Atul Sabharwal reports

SNIPP INTERACTIVE INC. REPORTS Q2 2016 FINANCIAL RESULTS

Snipp Interactive Inc. has released its financial results for the three and six months ended June 30, 2016. All results are reported under international financial reporting standards and in U.S. dollars. A copy of the complete unaudited interim financial statements and management's discussion and analysis are available on SEDAR.

First half 2016 corporate highlights:

• Record 165 deals sold in the first half of 2016, the highest number in the company's history;
• 86 continuing programs were run concurrently during the first half of 2016, reflecting the scalability of the company's platform and operations;
• Completed integration activities related to acquisitions carried out in 2015 that have put Snipp on the path to accrue over $2.0-million in annual savings. The full benefit of these cost reductions will begin accruing to the company in third quarter 2016;
• In Q2 2016 the company completed the cross-training process between the former Hip Digital and Snipp sales forces;
• Snipp continued development work on extensions to its product offerings, with a particular emphasis on the SnippLoyalty solution and SnippInsights, the company's much-anticipated data-mining solution.

Three and six months ended June 30, 2016, financial summary:

• Revenue for Q2 2016 was $2.8-million with a gross margin of 71 per cent. This was 34 per cent higher than revenue in first quarter 2016 ($2.8-million versus $2.1-million) and 4 per cent higher than the comparable period in 2015.
• Revenue for the first half of 2016 was $4.9-million with a gross margin of 73 per cent. This was 23 per cent lower than the first half of 2015 but at a significantly higher gross margin.
• Gross margin was 33 per cent higher for the first half of 2016 compared with the first half of 2015 (40 per cent). There was a 4-per-cent reduction in Q2 2016 margin when compared with Q1 2016. The company defines gross margin as revenue less campaign infrastructure costs.
• Sales bookings for Q2 2016 were $2.6-million with estimated margins of over 70 per cent.
• Sales bookings for the first half of 2016 totalled $7.2-million in comparison with $2.7-million for the first half of 2015, an increase of 167 per cent.
• The current bookings backlog stands at $6.0-million.
• The current sales pipeline stands at $25.2-million as of Aug. 29, 2016.
• The company reduced its salaries and compensation costs by 12 per cent ($406,000), and general and administrative costs by 18 per cent ($68,000), compared with Q1 2016.
• The company had $6.8-million of current assets at the end of Q2 with no outstanding bank debt.

"Q2 2016 represented another solid quarter for the company," said Atul Sabharwal, chief executive officer of Snipp. "We continue to grow our revenues quarter over quarter and have taken the steps necessary to reduce our costs as we drive towards profitability. This quarter allowed us to finally consolidate all of our operations and complete the integration of our past acquisitions, putting us on a strong footing to continue to be a disruptive force in the industries we serve. We are off to a great start to Q3 2016 and look forward to delivering continued growth as we execute on our plan for the remainder of 2016."

Non-generally accepted accounting principles measures

Snipp uses certain performance measures throughout this document that are not recognizable under Canadian generally accepted accounting principles or international financial reporting standards. These performance measures include gross margin. Management believes that these measures provide supplemental financial information that is useful in the evaluation of the company's operations.

Investors should be cautioned, however, that these measures should not be construed as alternatives to measures determined in accordance with GAAP and IFRS as an indicator of Snipp's performance. The company's method of calculating these measures may differ from that of other organizations, and, accordingly, these may not be comparable.

Gross margin

Snipp defines gross margin as revenue less campaign infrastructure. The company's calculation of gross margin is not a financial measure that is recognized under GAAP. Investors should be cautioned that the company's defined gross margin should not be construed as an alternative measure to other measures determined in accordance with GAAP.

The table contains calculations of gross margin.

                          GROSS MARGIN CALCULATIONS

                    Three months ended June 30,   Six months ended June 30,    
                            2016          2015          2016          2015

Revenue               $2,824,293    $2,709,288    $4,931,723    $6,415,088  
Less
campaign                                                                    
infrastructure          $815,130      $295,868    $1,340,086    $3,854,515 
                      ----------    ----------    ----------    ---------- 
Gross margin          $2,009,163    $2,413,420    $3,591,637    $2,560,573
                      ==========    ==========    ==========    ==========            

For more information

In conjunction with this announcement, Snipp management will be holding a conference call on Tuesday, Aug. 30, 2016, at 12 p.m. ET to discuss the company's quarterly results for Q2 2016.

Q2 2016 quarter-end conference call details:

Date:  Tuesday, Aug. 30, 2016

Time:  12 p.m. ET

International dial-in number:  719-325-2323

North American toll-free dial-in number:  888-417-8525

Conference ID:  5277533

A live and archived webcast of the conference call will be accessible on the investors section of the company's website under presentations. To access the live webcast, please log in 15 minutes prior to the start of the call to download and install any necessary audio software.

We seek Safe Harbor.