Snap Inc - Class A
Q2 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +0.24%.
Did SNAP Beat Earnings? Q2 2026 Results
Snap Inc. delivered a stronger-than-expected second quarter for fiscal 2026, posting revenue of $1.60 billion, up 18.9% year-over-year and ahead of the $1.53 billion consensus estimate, while an adjusted loss of $0.10 per share beat the $0.12 consensus by 18.30%. The quarter's standout driver was a dramatic improvement in profitability: Adjusted EBITDA surged to $249.62 million from $41.27 million a year ago, as total adjusted costs grew just 4% year-over-year even as the business expanded. AI-powered advertising tools were central to that efficiency story, with Dynamic Product Ads revenue growing 43% and cost-per-purchase falling 18%, helping ad revenue climb 9% to $1.28 billion. Equally notable, the subscription-driven Other Revenue segment jumped 85% to $316.00 million, signaling a maturing second revenue stream. Looking ahead, management guided Q3 revenue of $1.70 billion to $1.74 billion and Adjusted EBITDA of $300 million to $350 million, with a commercial launch of its SPECS augmented reality glasses planned for fall 2026.
- 19% year-over-year revenue growth driven by advertising improvements and direct revenue expansion
- Advertising Revenue grew 9% with improving momentum among large North American advertisers
- Other Revenue grew 85% led by Snapchat+, Memories Storage, and Lens+ subscriptions
- Gross margin expanded seven percentage points year-over-year to 58%
- Total adjusted cost structure increased just 4% year-over-year
- World Cup-related ad spending contributed during the quarter
- Continued strength among small and medium-sized businesses
- Dynamic Product Ads revenue grew 43%
- Cost per install declined 8% and cost per purchase declined 18% for app advertisers
- App purchase volume increased 128%
- ARPU grew 13% year-over-year to $3.25
- North America ARPU grew 23% to $10.26
- US audience broadening led by people aged 35 and older
“Q2 reflects the progress we are making to strengthen our core business and build a more durable financial foundation for Snap. We grew revenue by 19%, expanded margins, and generated positive free cash flow while improving advertising performance and rapidly growing our direct revenue business. We remain focused on serving our 971 million monthly active users, delivering measurable value for advertisers, and investing with discipline to increase free cash flow per share over time.”
Snap CEO, on the earnings call
Forward Guidance & Outlook
For Q3 2026, Snap guided revenue of $1.70 billion to $1.74 billion and Adjusted EBITDA of $300 million to $350 million. Full-year Infrastructure Costs are now expected at $1.65 billion to $1.70 billion (raised from $1.60–$1.65 billion) due to additional AI/ML infrastructure investment. All Other Cost of Revenue (ex-Infrastructure) expected at 16%–17% of revenue for the full year. Full-year Adjusted Operating Expenses expected at approximately $2.75 billion. Stock-based compensation expected at approximately $1.05 billion. Personnel-cost savings from restructuring expected to be more fully reflected starting Q3. Following completion of the current repurchase program in Q4, a new multi-year dilution management program is planned for 2027. Management expects sustained positive net income beginning in 2027, continued gross margin improvement, and further Adjusted EBITDA margin expansion. Direct revenue expected to continue growing materially faster than the overall business. SPECS commercial launch is planned for later in fall 2026, with a launch event scheduled for September 16th in Los Angeles.
SNAP YoY Financials
SNAP Revenue by Segment
SNAP Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.