Snap 2025 Q2 Earnings Misses Targets, Wider Net Loss

Snap (SNAP) reported its fiscal 2025 Q2 earnings on August 5, 2025. The company fell short of revenue expectations and posted a wider-than-expected net loss. It did not provide forward-looking guidance in its SEC filing, and its stock price declined following the report.

Revenue
Snap reported total revenue of $1.34 billion for Q2 2025, representing an 8.7% year-over-year increase compared to $1.24 billion in Q2 2024. This growth reflects continued expansion in its core advertising and platform services.

Earnings/Net Income
Snap’s net loss widened to $262.57 million, or $0.16 per share, in Q2 2025, marking a 5.6% increase from a $248.62 million, or $0.15 per share, loss in the same period the previous year. The continued net loss highlights the company's ongoing challenges in achieving profitability. The deteriorating earnings per share indicate an unfavorable performance in this key financial metric.

Price Action
Snap’s stock edged down 1.05% during the latest trading day, rose 0.64% in the most recent full trading week, and climbed 1.29% month-to-date.

Post Earnings Price Action Review
A strategy of buying Snap shares after a revenue increase quarter-over-quarter and holding for 30 days has yielded no return over the past three years. The approach has generated a compound annual growth rate of 0.00%, with no excess returns or Sharpe ratio. This indicates that the investment strategy has failed to deliver meaningful or risk-adjusted returns.

CEO Commentary
CEO Evan Spiegel highlighted a 9% year-over-year revenue increase to $1.345 billion and a 7% rise in monthly active users to 932 million. He emphasized growth in inventory and conversions, particularly through the broader rollout of Sponsored Snaps. Spiegel expressed optimism about leveraging improved advertiser performance to accelerate revenue and underscored ongoing investments in AI and augmented reality, as well as confidence in the platform’s long-term engagement and monetization strategies.

Guidance
Snap did not provide explicit forward-looking guidance in its SEC 8-K filing. The company referenced the potential of Sponsored Snaps and AI advancements to drive future growth but did not include specific quantitative expectations for upcoming quarters.

Additional News
Snap reported a significant slowdown in Q2 advertising growth, with ad revenue increasing at just 4%—far below its previous 9% growth in Q1—due to an unexpected system error in its ad-buying tools. This issue allowed marketers to purchase ads at significantly lower prices, temporarily depressing ad revenue. The company stated the problem has been resolved and that ad revenue growth has since improved. Snap also emphasized the potential of Sponsored Snaps, which place branded content directly into user inboxes, as a new source of ad inventory. Meanwhile, the company is expanding its subscription offering, Snapchat+, which saw its paid users grow to nearly 16 million, up from 15 million in the prior quarter and exceeding analyst expectations. Additionally, CEO Evan Spiegel announced a reorganization of the engineering team, including the departure of senior engineering executive Eric Yang, in an effort to align the department more closely with the company’s business priorities.