Snap (NYSE:SNAP) Issues Earnings Results

Snap (NYSE:SNAP) posted its quarterly earnings results on Wednesday. The company reported $0.03 EPS for the quarter, FiscalAI reports. Snap had a negative net margin of 2.30% and a negative return on equity of 7.21%. The company had revenue of $1.72 billion during the quarter, compared to analysts’ expectations of $1.73 billion. During the same quarter in the previous year, the business posted ($0.06) EPS. The firm’s revenue was up 14.3% on a year-over-year basis.

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

• Q3 revenue rose 14% year over year to $1.72 billion, while net income reached $56 million and adjusted EBITDA increased to $383 million. Gross margin expanded about 7 percentage points, and free cash flow rose 76% to $164 million.
• Advertising revenue grew just 4%, as declining upper-funnel brand spending—particularly from U.S. and Middle East consumer packaged goods advertisers—offset stronger direct-response growth. Management said direct response now represents about 77% of revenue and expects brand improvements to take hold over 2027.
• Direct-response campaigns showed improved results: app-purchase campaign revenue grew more than 54% as purchase volume more than doubled, while web-purchase campaign revenue increased 11%. Snap is betting that AI-powered ad tools, better measurement, and new placements will help turn these gains into larger advertiser budgets.
• For Q4, Snap guided to revenue of $1.950 billion–$1.985 billion and adjusted EBITDA of $490 million–$525 million. Other revenue, led by subscriptions, grew 84% in Q3, and Snap surpassed 30 million paid subscribers.
• Snap warned that evolving youth-related regulation could bring product changes, higher compliance and legal costs, and harm to user growth or engagement. It will also make global monthly active users, rather than daily active users, its primary audience metric starting in Q1 2027.

Snap Stock Performance

Shares of NYSE SNAP traded down $0.12 during trading hours on Friday, reaching $4.97. The stock had a trading volume of 29,587,794 shares, compared to its average volume of 45,525,254. The firm has a market cap of $8.41 billion, a price-to-earnings ratio of -55.27 and a beta of 1.23. The company has a current ratio of 2.94, a quick ratio of 2.94 and a debt-to-equity ratio of 1.75. Snap has a fifty-two week low of $3.81 and a fifty-two week high of $9.13. The firm has a 50-day moving average of $5.75 and a 200-day moving average of $5.41.

Snap News Summary

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Snapchat+ surpassed 30 million paid subscribers, up 5 million since February, adding to the company’s subscription-revenue opportunity. Snapchat surpasses 30M paid subscribers
• Positive Sentiment: Snap forecast fourth-quarter revenue of $1.95 billion to $1.99 billion, providing an outlook for continued growth. Snap shares fall over 10% on third-quarter earnings miss
• Neutral Sentiment: Traders bought an unusually high volume of SNAP call options. The activity may reflect bullish positioning, but options trading alone does not establish a change in the company’s fundamentals. Traders Purchase High Volume of Call Options on Snap
• Negative Sentiment: Third-quarter revenue rose 14% year over year to $1.72 billion but missed the $1.73 billion consensus, while daily active users also came in below expectations. The misses raised concerns about user growth and the pace of advertising recovery, weighing on the shares despite better results on some earnings measures. Snap stock falls as revenue and user growth miss estimates
• Negative Sentiment: Several firms cut price targets after the results: JPMorgan lowered its target to $5 and assigned an underweight rating; UBS cut to $6 and kept a neutral rating. Barclays also lowered its target, though it retained an overweight rating. These revisions highlight reduced analyst confidence in near-term upside.

Analyst Upgrades and Downgrades

Several equities research analysts have recently issued reports on the stock. Truist Financial decreased their price objective on shares of Snap from $8.00 to $7.00 and set a “hold” rating for the company in a research report on Tuesday, August 4th. Citizens Jmp reissued a “market perform” rating on shares of Snap in a report on Tuesday, August 4th. Zacks Research raised Snap from a “strong sell” rating to a “hold” rating in a report on Tuesday, September 1st. Rosenblatt Securities cut their price target on Snap from $6.40 to $6.00 and set a “neutral” rating on the stock in a research note on Tuesday, August 4th. Finally, Cantor Fitzgerald decreased their price target on Snap from $6.00 to $5.00 and set a “neutral” rating for the company in a report on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating, twenty-three have given a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus target price of $7.33.

Insider Transactions at Snap

In other Snap news, General Counsel Zachary Briers sold 136,504 shares of the business’s stock in a transaction that occurred on Monday, August 17th. The stock was sold at an average price of $5.20, for a total value of $709,820.80. Following the completion of the sale, the general counsel owned 2,424,331 shares in the company, valued at approximately $12,606,521.20. The trade was a 5.33% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CAO Rebecca Morrow sold 20,000 shares of the stock in a transaction that occurred on Wednesday, September 9th. The shares were sold at an average price of $5.35, for a total value of $107,000.00. Following the completion of the sale, the chief accounting officer directly owned 578,105 shares of the company’s stock, valued at $3,092,861.75. The trade was a 3.34% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders sold 445,926 shares of company stock worth $2,326,930. 22.68% of the stock is currently owned by corporate insiders.

Snap Company Profile

Snap Inc is a technology and social media company best known for Snapchat, a visual messaging and social networking application. Snapchat enables users to communicate through photos, videos, messages and Stories, while offering creative tools such as augmented reality (AR) Lenses and filters. The platform also includes features such as Snap Map, Spotlight and content from publishers and creators.

Snap generates most of its revenue from digital advertising, including video, augmented reality and other advertising formats delivered across Snapchat.