Snap (NYSE:SNAP) Announces Earnings Results, Beats Estimates By $0.02 EPS

Key Points

• Snap beat quarterly earnings expectations, reporting a loss of $0.10 per share versus the $0.12 consensus estimate. Revenue rose 19% year over year to $1.6 billion, while adjusted EBITDA reached $250 million and free cash flow was $121 million.
• Advertising and subscription businesses showed strong momentum: app purchase volume surged 128%, dynamic product ads revenue grew 43%, and other revenue increased 85% to $316 million. Snap expects third-quarter revenue of $1.70 billion-$1.74 billion, broadly in line with expectations.
• Risks remain around profitability, regulation and costs. Snap raised its full-year infrastructure spending outlook to $1.65 billion-$1.70 billion to support AI capacity, while youth-safety litigation and regulatory scrutiny could pressure expenses, user growth and engagement.

Snap (NYSE:SNAP - Get Free Report) released its quarterly earnings data on Monday. The company reported ($0.10) earnings per share for the quarter, topping analysts' consensus estimates of ($0.12) by $0.02, Zacks reports. Snap had a negative return on equity of 18.92% and a negative net margin of 6.72%.

Here are the key takeaways from Snap's conference call:

• Q2 revenue rose 19% year over year to $1.6 billion, while adjusted EBITDA increased to $250 million and free cash flow reached $121 million. Snap said revenue grew faster than costs, supporting expanding margins and operating leverage.
• Advertising momentum improved, with stronger large-advertiser demand in North America, continued SMB strength, and broader adoption of AI-powered Smart Campaigns. App purchase volume increased 128%, while dynamic product ads revenue grew 43%.
• Snap’s second revenue stream continued to expand, as other revenue grew 85% to $316 million, driven by Snapchat+, Memories Storage, and Lens+. With fewer than 3% of monthly active users paying, management sees substantial subscription penetration potential.
• Snap raised its full-year infrastructure cost outlook to $1.65 billion-$1.70 billion, primarily to fund additional AI and machine-learning capacity. Q3 revenue is expected to reach $1.70 billion-$1.74 billion, reflecting normalized World Cup-related spending and tougher year-over-year comparisons.
• Management highlighted regulatory and legal risks, including youth-safety scrutiny and several U.S. trials later this year. Potential outcomes could increase compliance and legal costs, require product changes, and negatively affect user growth and engagement.

Snap Stock Performance

Shares of SNAP traded up $0.36 during mid-day trading on Monday, hitting $5.05. 88,883,540 shares of the company's stock were exchanged, compared to its average volume of 48,508,930. The business's 50 day moving average is $4.97 and its two-hundred day moving average is $5.36. The company has a current ratio of 3.53, a quick ratio of 3.53 and a debt-to-equity ratio of 1.67. The firm has a market capitalization of $8.53 billion, a P/E ratio of -21.04 and a beta of 1.05. Snap has a fifty-two week low of $3.81 and a fifty-two week high of $9.55.

Insider Buying and Selling at Snap

In related news, insider Ajit Mohan sold 6,923 shares of Snap stock in a transaction on Tuesday, June 16th. The shares were sold at an average price of $5.58, for a total value of $38,630.34. Following the transaction, the insider directly owned 5,050,968 shares in the company, valued at $28,184,401.44. This trade represents a 0.14% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CAO Rebecca Morrow sold 16,729 shares of the company's stock in a transaction on Monday, May 18th. The stock was sold at an average price of $5.60, for a total transaction of $93,682.40. Following the transaction, the chief accounting officer owned 512,811 shares of the company's stock, valued at approximately $2,871,741.60. The trade was a 3.16% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last three months, insiders have sold 2,868,059 shares of company stock valued at $15,855,631. Corporate insiders own 22.68% of the company's stock.

Institutional Trading of Snap

Hedge funds and other institutional investors have recently made changes to their positions in the stock. Limestone Investment Advisors LP acquired a new stake in shares of Snap during the 3rd quarter valued at approximately $194,000. Certuity LLC increased its stake in Snap by 41.6% in the 3rd quarter. Certuity LLC now owns 22,996 shares of the company's stock valued at $177,000 after purchasing an additional 6,759 shares in the last quarter. Orion Porfolio Solutions LLC raised its holdings in Snap by 8.3% during the second quarter. Orion Porfolio Solutions LLC now owns 18,913 shares of the company's stock worth $164,000 after purchasing an additional 1,451 shares during the last quarter. Prudential Financial Inc. purchased a new stake in Snap during the second quarter worth $136,000. Finally, HUB Investment Partners LLC acquired a new stake in Snap in the second quarter valued at $117,000. Institutional investors and hedge funds own 47.52% of the company's stock.

Analyst Ratings Changes

Several equities research analysts have recently weighed in on SNAP shares. BNP Paribas Exane downgraded Snap to a "neutral" rating in a report on Monday, April 27th. Royal Bank Of Canada reduced their price objective on Snap from $10.00 to $8.00 and set a "sector perform" rating for the company in a research note on Thursday, May 7th. Weiss Ratings restated a "sell (e+)" rating on shares of Snap in a research report on Friday, July 17th. Cantor Fitzgerald restated a "neutral" rating and set a $5.00 price target on shares of Snap in a report on Monday, July 20th. Finally, Benchmark reissued a "hold" rating on shares of Snap in a research report on Wednesday, June 17th. One equities research analyst has rated the stock with a Strong Buy rating, eight have assigned a Buy rating, twenty-five have issued a Hold rating and two have given a Sell rating to the company's stock. According to MarketBeat, the stock currently has an average rating of "Hold" and an average target price of $7.23.

Trending Headlines about Snap

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Q2 earnings and revenue beat expectations. Snap reported an adjusted loss of $0.10 per share, better than the $0.12 loss analysts expected. Revenue grew 19%, while the company said it expanded margins and generated positive free cash flow. Snap Inc. Announces Second Quarter 2026 Financial Results
• Positive Sentiment: Advertising momentum improved. CEO Evan Spiegel said the advertising business showed improving momentum, supporting investor confidence in Snap’s core revenue stream. The company also highlighted rapid growth in its direct-revenue business. Snap's stock jumps 10% on earnings beat and strong sales forecast
• Positive Sentiment: Third-quarter revenue guidance was consistent with expectations. Snap forecast revenue of approximately $1.7 billion, in line with the analyst consensus. While not an upside surprise, the outlook avoided a negative revision following the earnings report.
• Neutral Sentiment: Options activity indicated elevated short-term trading interest. Investors purchased 119,645 call options, 17% above typical daily call volume. This may reflect bullish positioning, but it does not change Snap’s underlying financial outlook.
• Negative Sentiment: Investors still face user-growth and regulatory risks. Daily active user growth remains an important metric as several countries introduce restrictions on teenagers’ social-media use. Snap also reported a negative net margin and negative return on equity, underscoring that its path to sustained profitability remains incomplete. Snap Earnings Are Up Next. Here's the Number to Watch

Snap Company Profile

Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform.

Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR.

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