Company Reports

Snap reported second-quarter results, including sales of $1.60 billion, up 19%, and an adjusted EBITDA margin of 16%, up 13 percentage points. The firm's digital advertising business got a boost from the World Cup this summer. Shares rose sharply after the earnings report.

Snap kicked off fiscal 2026 with mixed results. While revenue growth remained healthy at 12%, the firm's daily active users in highly monetized geographies, including North America and Europe, continued to decline, likely leading to a nearly 10% after-hours selloff in shares.

Snap is the parent company of Snapchat, a widely used social media app with over 450 million daily active users. While the application is free to use, Snap makes money by allowing advertisers to promote their products via ads on its platform. While the firm’s ad inventory has steadily increased over time, with advertisers able to promote their products through photos, videos, and augmented reality features, Snap has been unable to effectively monetize its user base, and we believe its ad-targeting and user-engagement algorithms are less potent than larger social media players such as Meta and TikTok.

Snap is the parent company of Snapchat, a widely used social media app with over 450 million daily active users. While the application is free to use, Snap makes money by allowing advertisers to promote their products via ads on its platform. While the firm’s ad inventory has steadily increased over time, with advertisers able to promote their products through photos, videos, and augmented reality features, Snap has been unable to effectively monetize its user base, and we believe its ad-targeting and user-engagement algorithms are less potent than larger social media players such as Meta and TikTok.

Snap reported fourth-quarter revenue of $1.72 billion, up 10% year over year, largely due to strength in average revenue per user. Adjusted EBITDA margin came in at 21%, up 300 basis points from the prior year, owing to growing operating leverage and a favorable sales mix.

Snap reported third-quarter revenue of $1.507 billion, up 10% year over year, due to strength in international markets. Adjusted EBITDA margin came in at 12%, up 200 basis points from a year ago, due to cost efficiencies and a greater mix of high-margin products like Sponsored Snaps and Spotlight.

Snap is the parent company of Snapchat, a widely used social media app with over 450 million daily active users. While the application is free to use, Snap makes money by allowing advertisers to promote their products via ads on its platform. While the firm’s ad inventory has steadily increased over time, with advertisers able to promote their products through photos, videos, and augmented reality features, Snap has been unable to effectively monetize its user base, and we believe its ad-targeting and user-engagement algorithms are less potent than larger social media players such as Meta and TikTok.

Snap reported second-quarter revenue of $1.3 billion, up 9% year over year, largely due to strength in European markets. Adjusted EBITDA margin was 3.1%, down 130 basis points year over year due to greater infrastructure, legal, and personnel costs, and weaker monetization.

Snap is the parent company of Snapchat, a widely used social media app with over 450 million daily active users. While the application is free to use, Snap makes money by allowing advertisers to promote their products via ads on its platform. While the firm’s ad inventory has steadily increased over time, with advertisers able to promote their products through photos, videos, and augmented reality features, Snap has been unable to effectively monetize its user base, and we believe its ad-targeting and user-engagement algorithms are less potent than larger social media players such as Meta and TikTok.

Snap is the parent company of Snapchat, a widely used social media app with over 450 million daily active users. While the application is free to use, Snap makes money by allowing advertisers to promote their products via ads on its platform. While the firm’s ad inventory has steadily increased over time, with advertisers able to promote their products through photos, videos, and augmented reality features, Snap has been unable to effectively monetize its user base, and we believe its ad-targeting and user-engagement algorithms are less potent than larger social media players such as Meta and TikTok.

Snap reported solid first-quarter 2025 results, driven by strong user growth and rising average revenue per user. However, management’s decision to withhold guidance due to demand uncertainty suggests weaker near-term growth prospects amid a volatile macro environment.

Snap is the parent company of Snapchat, a widely used social media app with over 450 million daily active users. While the application is free to use, Snap makes money by allowing advertisers to promote their products via ads on its platform. While the firm’s ad inventory has steadily increased over time, with advertisers able to promote their products through photos, videos, and augmented reality features, Snap has been unable to effectively monetize its user base, and we believe its ad-targeting and user-engagement algorithms are less potent than larger social media players such as Meta and TikTok.

Snapchat reported solid fourth-quarter results, with strong user growth and expanding average revenue per user. While Snap's top-line growth was broad-based, international markets led the way as the firm continues to tap developing markets to attract new users to its platform.

Snap reported decent third-quarter earnings that included a mixture of strong user growth and improving monetization, as measured by average revenue per user. Growth in both users and ARPU was broad-based, showing up across all of Snap's three geographic end-markets.

We continue to view Snap as a solid social media platform, with a large user base consisting of more than 400 million daily active users. Despite the firm's scale, the monetization of its user base has consistently lagged behind larger peers like Meta, creating a drag on profitability.

Snap is the parent company of Snapchat, a widely used social media app with over 400 million daily active users. While the application is free to use, Snap makes money by allowing advertisers to promote their products via ads on its platform. While the firm’s ad inventory has steadily increased over time, with advertisers able to promote their products through photos, videos, and augmented reality features, Snap has been unable to effectively monetize its user base, and we believe its ad-targeting and user-engagement algorithms are less potent than larger social media players such as Meta and TikTok.

After posting surprisingly strong revenue and providing an upbeat forecast last quarter, no-moat Snap did the opposite this time, sending its shares sharply lower. Results were particularly disappointing relative to the solid digital advertising demand giants Meta and Alphabet have generally seen. Our growth outlook for Snap was already conservative, and, as with last quarter, we’re maintaining our $14 fair value estimate.

No-moat Snap posted positive first-quarter results, improving on a difficult fourth quarter on the back of improved user monetization. Revenue per user increased year over year for the first time since early 2022, reflecting the strength in the broader advertising market and Snap’s efforts to revive growth. We maintain our $14 per share fair value estimate.

Snap is the maker of one of the most popular social networking apps, Snapchat, which has captured 414 million global daily users as of the end of 2023, most of whom are between the ages of 18 and 24. We believe that Snap and its users benefit from a network effect and that the firm is starting to attract the attention (and dollars) of advertisers. However, there is no guarantee that Snap will effectively monetize these users consistently. In turn, we are not yet convinced about the firm’s ability to generate excess returns on capital over the next decade.

Snap is the maker of one of the most popular social networking apps, Snapchat, which has captured 406 million global daily users to date, most of whom are between the ages of 18 and 24. We believe that Snap and its users benefit from a network effect among its customer base and is starting to attract the attention (and dollars) of advertisers with a growth trajectory toward over $7 billion in revenue by 2027. However, there is no guarantee that Snap will effectively monetize these users consistently. In turn, we are not yet convinced about the firm’s ability to generate excess returns on capital over the next decade.