Snap (NYSE:SNAP) Issues Earnings Results, Misses Expectations By $0.14 EPS

Key Points

• Snap reported EPS of -$0.05, missing consensus by $0.14; revenue was in line at $1.53B but the company still posted a GAAP loss and negative margins.
• User and monetization trends improved with DAUs 483M and MAUs 956M (both +5% YoY), Q1 revenue up ~12% YoY, adjusted EBITDA of $233M, free cash flow of $286M, and an adjusted gross margin of 57% as ad AI automation (~70% of spend) and DPA growth help drive monetization.
• Near-term headwinds persist: total eCPMs fell ~12%, the ~$400M Perplexity deal was ended (no Q2 contribution), the Middle East conflict cut March results by ~$20–25M, and management expects $95–130M of Q2 restructuring charges despite plans to cut >$500M of annualized costs by H2‑2026.

Snap (NYSE:SNAP - Get Free Report) posted its quarterly earnings data on Wednesday. The company reported ($0.05) EPS for the quarter, missing analysts' consensus estimates of $0.09 by ($0.14), FiscalAI reports. The company had revenue of $1.53 billion for the quarter, compared to the consensus estimate of $1.53 billion. Snap had a negative return on equity of 20.72% and a negative net margin of 7.76%.

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

• Snap reported a return to user growth and higher engagement, with DAUs at 483M and MAUs at 956M (both +5% YoY) driven by Spotlight, AR Lenses, Games and Snap Map improvements.
• Financials showed meaningful progress — Q1 revenue $1.53B (+12% YoY), other revenue +87%, adjusted EBITDA $233M, free cash flow $286M, and adjusted gross margin expanded to 57%, moving toward the 60% FY goal.
• Ad product and measurement gains are accelerating monetization: AI automation is used on ~70% of ad spend, DPA revenue +30% YoY, app ad conversions improved, and third‑party measurement (Measured) showed median iROAS up ~104% in recent tests; new inventory like Sponsored Snaps and Promoted Places show promising early performance.
• Near-term headwinds remain — large North America advertisers are still pressured, total eCPMs declined ~12%, the Middle East conflict caused a ~$20–25M impact in March, the Perplexity relationship ended (no Q2 contribution), and Snap expects $95–130M of Q2 restructuring charges despite a plan to cut >$500M of annualized costs H2‑2026.

Snap Trading Up 0.6%

NYSE SNAP traded up $0.04 during mid-day trading on Wednesday, reaching $6.15. 73,297,005 shares of the stock were exchanged, compared to its average volume of 53,174,938. Snap has a one year low of $3.81 and a one year high of $10.41. The stock has a 50 day simple moving average of $5.09 and a 200-day simple moving average of $6.60. The stock has a market cap of $10.38 billion, a P/E ratio of -22.77 and a beta of 1.05. The company has a debt-to-equity ratio of 1.53, a current ratio of 3.56 and a quick ratio of 3.56.

Insider Buying and Selling at Snap

In related news, CAO Rebecca Morrow sold 16,499 shares of Snap stock in a transaction on Tuesday, February 17th. The shares were sold at an average price of $4.70, for a total value of $77,545.30. Following the completion of the sale, the chief accounting officer owned 466,682 shares of the company's stock, valued at approximately $2,193,405.40. This trade represents a 3.41% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, CTO Robert C. Murphy sold 1,000,000 shares of Snap stock in a transaction on Tuesday, February 10th. The shares were sold at an average price of $5.36, for a total transaction of $5,360,000.00. Following the completion of the sale, the chief technology officer directly owned 49,313,775 shares of the company's stock, valued at approximately $264,321,834. The trade was a 1.99% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders have sold 2,565,573 shares of company stock valued at $13,329,781.

Institutional Investors Weigh In On Snap

Large investors have recently made changes to their positions in the business. Alyeska Investment Group L.P. purchased a new position in shares of Snap in the 3rd quarter worth about $176,697,000. Voloridge Investment Management LLC increased its holdings in Snap by 53.3% during the third quarter. Voloridge Investment Management LLC now owns 10,300,911 shares of the company's stock worth $79,420,000 after buying an additional 3,582,223 shares during the last quarter. AQR Capital Management LLC raised its position in Snap by 874.3% in the fourth quarter. AQR Capital Management LLC now owns 10,066,852 shares of the company's stock worth $81,239,000 after acquiring an additional 9,033,644 shares during the period. Charles Schwab Investment Management Inc. raised its position in Snap by 3.3% in the fourth quarter. Charles Schwab Investment Management Inc. now owns 7,423,369 shares of the company's stock worth $59,907,000 after acquiring an additional 235,955 shares during the period. Finally, Dimensional Fund Advisors LP boosted its stake in Snap by 27.9% in the third quarter. Dimensional Fund Advisors LP now owns 6,117,858 shares of the company's stock valued at $47,224,000 after acquiring an additional 1,335,830 shares during the last quarter. 47.52% of the stock is owned by hedge funds and other institutional investors.

More Snap News

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Q1 revenue and DAU recovery — Snap reported first-quarter revenue of $1.53B (up ~12% YoY) and said daily active users returned to growth outside North America/Europe, a clear sign advertising demand and user engagement are improving. Snap's quarterly revenue rises, daily active users return to growth
• Positive Sentiment: AI-driven ad partnerships — Snap’s AI ad push continues: a partnership with Experian to bring financial data into AI-powered ads could enhance ad targeting and CPMs if adoption scales. A Peek Into Snap Inc (SNAP)’s AI-Driven Advertising Strategy
• Positive Sentiment: Elevated bullish options activity — Unusually high call buying (roughly 183k calls, ~47% above average) signals short-term speculative bullish positioning that can amplify upside momentum.
• Neutral Sentiment: Wall Street repositioning ahead of results — Several analyst teams updated forecasts and price targets ahead of Q1, reflecting differing views on Snap’s ad recovery and AI monetization timeline; keep an eye on consensus revisions. Top Wall Street Forecasters Revamp Snap Expectations Ahead Of Q1 Earnings
• Neutral Sentiment: Analyst metric scrutiny — Commentary from research outlets highlights focus on metrics beyond revenue/EPS (ARPU, ad pricing, retention), meaning headline numbers may be less important than underlying trend lines. Exploring Analyst Estimates for Snap (SNAP) Q1 Earnings
• Negative Sentiment: Perplexity deal ended — Snap disclosed the previously announced ~$400M integration deal with generative-AI startup Perplexity was “amicably ended,” and management’s guidance assumes no contribution from Perplexity, removing a potential near-term revenue/AI-product catalyst. Snap says its $400M deal with Perplexity ‘amicably ended'
• Negative Sentiment: Mixed/soft bottom-line and cautious guidance — Though revenue met expectations, reported GAAP loss per share was worse than some estimates and management issued cautious sales guidance citing geopolitical uncertainty and no Perplexity contribution; that tempered investor reaction. Snap NYSE: SNAP Reports Q1 CY2026 In Line With Expectations But Stock Drops
• Negative Sentiment: Activist pressure — Randian Capital’s campaign urging a Specs review, governance changes and board refresh introduces near-term strategic uncertainty that could be disruptive even if it aims to unlock value. Randian Activist Push Puts Snap Specs Review And Valuation In Focus

Analysts Set New Price Targets

A number of research analysts recently issued reports on SNAP shares. Loop Capital set a $8.00 price objective on shares of Snap in a research note on Monday, February 23rd. JPMorgan Chase & Co. decreased their price objective on shares of Snap from $8.00 to $7.00 and set an "underweight" rating on the stock in a research note on Thursday, February 5th. B. Riley Financial raised shares of Snap from a "neutral" rating to a "buy" rating and set a $10.00 price objective on the stock in a research note on Thursday, February 5th. Citigroup lifted their price objective on shares of Snap from $6.00 to $7.00 and gave the company a "neutral" rating in a research note on Wednesday, April 15th. Finally, Sanford C. Bernstein cut shares of Snap from a "market perform" rating to a "market perform" rating in a report on Monday, April 27th. One investment analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating, twenty have assigned a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat.com, Snap has a consensus rating of "Hold" and a consensus price target of $7.93.

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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