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Snap Q2 Earnings Miss: Ad Glitch Hits Revenue, Stock Plunges 15% Amid Weakest Growth in a Year
ByAinvest
Tuesday, Aug 5, 2025 5:17 pm ET1min read
Snap's Q2 2025 earnings show revenue growth of 8.7-9% YoY, but the slowest growth in over a year. A critical ad pricing mistake during the quarter cut into revenue, and the company's Average Revenue Per User (ARPU) fell short of expectations. Despite steady growth in its user base, reaching 469 million DAUs, the market reacted negatively, with Snap's stock dropping 15% in after-hours trading.
Snap Inc. reported its second-quarter (Q2) 2025 financial results, showcasing a 9% year-over-year (YoY) increase in revenue to $1.34 billion, but falling short of analyst expectations. The company's daily active users (DAUs) reached 469 million, marking a 9% YoY increase [1]. Despite these positive metrics, Snap's stock dropped by more than 14% in after-hours trading following the announcement.The quarter's revenue growth was driven by a 9% increase in monthly active users (MAUs) to 932 million. However, the company's average revenue per user (ARPU) fell short of expectations, with global ARPU at $2.87, compared to the $2.90 analysts anticipated [1]. This discrepancy can be attributed to a critical ad pricing mistake during the quarter, which cut into revenue [2].
Snap's operating cash flow improved to $88 million, up from $21 million in the prior year, while free cash flow reached $24 million, compared to a negative $73 million in the prior year. The company's net loss was $263 million, up from $249 million in the prior year, translating to a net loss of 16 cents per share [2].
Evan Spiegel, Snap's co-founder and CEO, emphasized the company's continued investment in AI and augmented reality, highlighting the growth of its community and the success of its AR Lenses. He expressed optimism about the potential for improved advertiser performance to drive topline acceleration [1].
Looking ahead, Snap expects DAUs to reach approximately 476 million in Q3, with revenue guidance ranging from $1.475 billion to $1.505 billion. The company also announced plans to launch its first consumer-ready Specs AR glasses in 2026, which could further enhance its AR capabilities and drive future growth [1].
References:
[1] https://variety.com/2025/digital/news/snap-q2-2025-earnings-results-snapchat-1236478783/
[2] https://www.stocktitan.net/news/SNAP/snap-inc-announces-second-quarter-2025-financial-kgx2mtbubmbd.html
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