Snap's Q2 2025 Earnings Call: Unraveling Contradictions in Ad Growth, User Engagement, and Monetization Strategies

Advertising revenue growth and impact of auction pricing change, Spotlight monetization and user engagement, North America DAU trends and engagement, Sponsored Snaps rollout and impact, small and medium-sized advertisers growth strategy are the key contradictions discussed in Snap's latest 2025Q2 earnings call.



User Growth and Engagement:
- Snap Inc. achieved 932 million Monthly Active Users in Q2, an increase of 64 million or 7% year-over-year, moving closer to their goal of 1 billion Snapchatters.
- The growth was driven by continuous innovation, new features, and enhancing relationships between friends and family.

Revenue and Subscription Expansion:
- Revenue increased 9% year-over-year to reach $1.34 billion in Q2, driven primarily by the growth of small and medium customers and delivery against lower funnel objectives.
- Snapchat+ approached 16 million subscribers in Q2, growing 64% year-over-year to an annualized run rate of nearly $700 million.
- This expansion was supported by the introduction of Lens+, a new subscription tier offering exclusive AI video lenses and early access to new features.

Augmented Reality and Developer Ecosystem:
- Snapchatters engaged with AR lenses more than 8 billion times a day, and over 400,000 creators have built more than 4 million lenses.
- The company's investment in AR, including a full-stack AR platform and developer tools, has fostered a global AR creator community, enhancing user engagement and fueling innovation.

Advertising Platform and Performance:
- Advertising revenue reached $1.174 billion in Q2, up 4% year-over-year, driven by growth in DR advertising revenue, which increased 5% year-over-year.
- The growth was supported by strong demand for Pixel purchase and app purchase optimizations and improved performance with Sponsored Snaps and AI-driven advancements in ad platform capabilities.