Snap Inc - Class A
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: −0.06%.
Did SNAP Beat Earnings? Q4 2025 Results
Snap delivered a decisive beat to close out fiscal 2025, swinging to a profit that few on Wall Street had anticipated. The company posted Q4 earnings per share of $0.03 against a consensus estimate of -$0.03, a 200.00% positive surprise, while revenue climbed 10.2% year over year to $1.72 billion, edging past the $1.70 billion analyst forecast. The clearest driver behind the profitability milestone was a combination of gross margin expansion to 59% and the rapid scaling of Snapchat+, which surpassed 24 million subscribers, up 71% year over year, helping push Other Revenue 62% higher and diversifying the company away from pure advertising dependence. Adjusted EBITDA reached $357.75 million, with more than half of incremental revenue converting to that metric. Some analysts have flagged ongoing concerns about Snap's monetization efficiency relative to larger rivals, context that makes the SMB ad revenue growth, now a sixth consecutive quarter of majority contribution, particularly meaningful. Looking ahead, Snap guided Q1 2026 revenue of $1.50 billion to $1.53 billion and targets exceeding 60% gross margins for the full year.
- Revenue from In-App Optimizations grew 89% year-over-year
- Revenue from Dynamic Product Ads increased 19% year-over-year
- Other Revenue increased 62% year-over-year driven by Snapchat+ subscribers growing 71% to 24 million
- SMBs contributed the majority of advertising revenue growth for the sixth consecutive quarter
- Total active advertisers increased 28% year-over-year
- Adjusted Gross Margin expanded to 59% from 55% in Q3 and 57% in Q4 2024
- Adjusted EBITDA flow-through of 51% in Q4
- Global impression volume increased approximately 14% year-over-year
“Our Q4 results began to reflect the impact of our strategic pivot toward profitable growth, translating into revenue diversification and meaningful margin expansion.”
Snap CEO, on the earnings call
Forward Guidance & Outlook
For Q1 2026, Snap guides revenue of $1.50 billion to $1.53 billion (excluding potential Perplexity integration revenue) and Adjusted EBITDA of $170 million to $190 million. For full year 2026, the company targets infrastructure costs of $1.6 billion to $1.65 billion (flat YoY at the low end), remaining Adjusted Cost of Revenue at 16-17% of revenue per quarter (a 1-2 percentage point improvement over 2025), Adjusted Operating Expenses of approximately $3.0 billion, and SBC and related expenses of approximately $1.2 billion. Headcount growth is expected to be roughly in line with the 7% growth seen in Q4 2025. The company expects to exceed its 60% gross margin goal in 2026, driven by calibrated infrastructure costs, higher-margin ad placements, and growing subscription scale. Management is focused on achieving meaningful Net Income profitability over the medium term while continuing to invest in the consumer launch of Specs later in 2026.
SNAP YoY Financials
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SNAP Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.