- Snap forecasts third-quarter revenue between $1.48 billion and $1.51 billion, aligning with estimates of $1.48 billion.
- Adjusted EBITDA for the third quarter is projected between $110 million and $135 million, with the estimate at $116.1 million.
- Daily active users are expected to reach approximately 476 million, closely matching the estimate of 476.43 million.
- For the year, adjusted operating expenses are anticipated to range from $2.65 billion to $2.70 billion.
- In the second quarter, revenue increased by 8.7% year-over-year to $1.34 billion, slightly below the forecasted $1.35 billion.
- North American revenue rose 6.9% year-over-year to $820.6 million, surpassing the $812.6 million estimate.
- European revenue experienced a substantial 15% year-over-year growth, reaching $265.3 million, exceeding the $249.2 million estimate.
- Revenue from the rest of the world grew 8.2% year-over-year, totaling $259.0 million, but fell short of the $290.3 million estimate.
- Adjusted EBITDA decreased by 25% year-over-year to $41.3 million, below the forecast of $48.7 million.
- Daily active users in the second quarter increased by 8.6% year-over-year to 469 million, surpassing the 468.11 million estimate.
- In North America, daily active users declined by 2% year-over-year to 98 million, below the 99.41 million estimate.
- European daily active users increased by 3.1% year-over-year to 100 million, slightly above the 99.45 million estimate.
- Rest of world daily active users grew by 15% year-over-year to reach 271 million, surpassing the 269.42 million estimate.
- Average revenue per user slightly increased by 0.3% year-over-year to $2.87, just under the estimated $2.89.
- North America saw an 8.6% increase in average revenue per user, reaching $8.33, above the $8.20 estimate.
- Europe’s average revenue per user rose by 12% year-over-year to $2.65, exceeding the $2.50 estimate.
- The rest of the world’s average revenue per user decreased by 5.9% year-over-year to 96c, below the forecasted $1.08.
- Snap’s free cash flow improved, totaling $23.8 million compared to a negative $73.4 million in the previous year, falling short of the $65.7 million estimate.
- The company’s workforce increased by 10% year-over-year to 5,206 employees, slightly above the 5,154 estimate.
- Snap attributes ad platform improvements and AI advancements to a 39% year-over-year increase in purchase volume for commerce advertisers and more than 25% growth in purchase-related ad revenue in Q2.
- Challenges impacting growth included ad platform issues, timing of Ramadan, and minor changes, which have since been addressed.
- A significant change aimed at enhancing advertiser performance unintentionally resulted in campaigns clearing at reduced prices but has been reverted, leading to improved advertising revenue growth.
Snap on Smartkarma
Analyst coverage of Snap on Smartkarma by Baptista Research sheds light on the company’s recent financial performance and future prospects. In a report titled “Snap Inc. Pushes Hard On SMB Advertising—60% Growth Proves the Strategy Is Working!” published on Smartkarma, the analysis highlights Snap’s strengths and challenges. Snap’s Q1 2025 earnings showed a 14% year-over-year revenue increase, driven by advancements in direct response advertising and the growth of Snapchat+ subscriptions, which saw a 75% revenue increase year-over-year. This positive momentum underscores the success of Snap’s strategic initiatives.
Furthermore, Baptista Research‘s report “Snap Inc.: Can Its Subscription Business Expansion Strategy Supercharge Growth?” delves into Snap Inc.’s fourth-quarter 2024 earnings. The analysis presents a mixed outlook, showcasing resilient growth alongside areas of concern. Snap reported a significant increase in daily active users, reaching 453 million globally, indicating an expanding reach that could benefit long-term engagement and monetization strategies. This analysis by Baptista Research provides valuable insights for investors evaluating Snap’s performance and growth potential.
A look at Snap Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 1 | |
| Growth | 3 | |
| Resilience | 3 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 2.6 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Analysts at Smartkarma have given Snap a mixed outlook based on their Smart Scores. While the company scored high in momentum, with a score of 4, indicating strong positive price movement and investor interest, it didn’t fare as well in other areas. Snap received a growth score of 3, suggesting moderate growth potential, and a resilience score of 3, pointing to its ability to withstand market fluctuations. However, the company scored lower in value and dividend, with scores of 2 and 1 respectively. This indicates that Snap may not be considered a bargain buy and does not offer significant dividend payouts.
Overall, based on the Smart Scores, Snap’s long-term outlook appears to be a mix of positive momentum and moderate growth potential, but with lower evaluation in terms of value and lack of dividend attractiveness. Investors looking at Snap should consider these factors carefully before making investment decisions in the social media and technology services provider.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
Have feedback on this article? Concerned about the content? Get in touch with us directly.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Analytics and News
- ✓ Events & Webinars
