Snap Reports Q2 2025 Revenue Down 21%, Advertising Decline at 1% YoY.

• Snap Inc. faces shareholder lawsuit over allegedly false revenue growth claims • Class period: April 29, 2025 to August 5, 2025 • Defendants allegedly concealed material adverse facts about revenue growth rate • Lead plaintiff appointment not required to participate in recovery • Gross Law Firm encourages shareholders to contact the firm for possible lead plaintiff appointment

Snap Inc. (SNAP) is facing a shareholder lawsuit alleging that the company misrepresented its revenue growth prospects. The lawsuit, captioned Abdul-Hameed v. Snap Inc., No. 25-cv-07844 (C.D. Cal.), was filed on September 3, 2025, and accuses Snap and its executives of violating the Securities Exchange Act of 1934 [1].

The class action lawsuit, which seeks to represent investors who purchased or otherwise acquired Snap securities between April 29, 2025, and August 5, 2025, alleges that Snap created the false impression of reliable information about its expected advertising revenue and growth prospects. The complaint challenges Snap’s assurances about the benefits of its ad platform improvements as a driver of revenue growth [2].

Investors learned the truth on August 5, 2025, when Snap reported its Q2 2025 financial results. The company missed consensus estimates for its Q2 GAAP EPS and disclosed that its ad revenue growth significantly decelerated from 9% in Q1 to just 1% in April 2025, largely due to issues with its ad platform [1]. This revelation drove the price of Snap shares about 17% lower the next day.

Hagens Berman, a global plaintiffs’ rights complex litigation firm, is investigating when Snap’s management knew about ad platform issues and whether this adverse information should have been disclosed to investors earlier [1]. Robbins Geller Rudman & Dowd LLP has also announced that investors with substantial losses can seek appointment as lead plaintiff of the Snap class action lawsuit [2].

The lead plaintiff appointment is not required to participate in the recovery. Investors who suffered substantial losses and wish to serve as lead plaintiff can provide their information through Robbins Geller’s website [2].

The lawsuit highlights governance risks tied to Snap's 95% founder voting control and undisclosed ad-platform flaws causing operational transparency concerns [3]. It underscores investor demands for board diversification and robust disclosures, reflecting broader trends in tech governance scrutiny amid rising AI-related litigation.

Snap’s alleged failure to disclose a critical issue with its ad platform has led to a significant drop in its stock price and market value, demonstrating the importance of transparent communication and accurate financial reporting.

References:
[1] https://www.globenewswire.com/news-release/2025/09/03/3144133/32716/en/Snap-Inc-SNAP-Faces-Securities-Class-Action-Amid-Impact-of-Ad-Platform-Changes-Hagens-Berman.html
[2] https://www.morningstar.com/news/globe-newswire/9522960/snap-investor-alert-robbins-geller-rudman-dowd-llp-announces-that-snap-inc-investors-with-substantial-losses-have-opportunity-to-lead-investor-class-action-lawsuit
[3] https://www.ainvest.com/news/assessing-legal-market-risks-tech-stocks-snap-case-study-2508/