Snap Q2 Earnings Miss Expectations, Shares Plummet 15%

Snap's Q2 earnings missed expectations, with a loss per share of $0.16, wider than last year's loss of $0.15, and adjusted EBITDA of $41 million, down from $55 million. Revenue increased 9% YoY to $1.36 billion, but average revenue per user of $2.87 missed estimates of $2.90. Monthly active users rose 7% YoY to 932 million, while daily active users increased 9% to 469 million. Shares fell 14.4% to $8 post-earnings.

Snap Inc. (NYSE: SNAP) released its second-quarter 2025 financial results on August 5, 2025, reporting a 9% year-over-year (YoY) increase in revenue to $1.345 billion. Despite the revenue growth, the company missed profit expectations, posting a net loss of $262.57 million and an adjusted EBITDA of $41 million, down from $55 million in the prior year. The company's average revenue per user (ARPU) of $2.87 also fell short of expectations of $2.90. Monthly active users (MAUs) rose 7% YoY to 932 million, while daily active users (DAUs) increased 9% to 469 million. Shares of Snap Inc. fell 14.4% to $8 post-earnings.

The quarter's results highlight Snap's continued growth in user base, driven by a 7% increase in MAUs and a 9% increase in DAUs. The company's focus on AI and augmented reality has contributed to this growth, as noted by CEO Evan Spiegel. However, the company's ability to translate this user growth into top-line acceleration remains a challenge, as evidenced by the missed ARPU expectations.

The company's operating cash flow improved to $88 million from $(21) million in the prior year, and free cash flow increased to $24 million from $(73) million. These improvements suggest that Snap is making progress in managing its cash flow, despite the overall financial performance.

Looking ahead, Snap Inc. faces several challenges. The company's focus on AI and augmented reality is expected to continue, but the ability to monetize these investments effectively will be crucial. Additionally, the company's reliance on advertising revenue exposes it to shifts in consumer behavior and market conditions.

In conclusion, Snap Inc.'s Q2 2025 earnings report highlights the company's continued user growth, but also underscores the challenges it faces in translating this growth into profitability. The company's focus on AI and augmented reality is a positive development, but the ability to monetize these investments effectively will be key to Snap's long-term success.

Reference List:
[1] https://investor.snap.com/news/news-details/2025/Snap-Inc--Announces-Second-Quarter-2025-Financial-Results/default.aspx
[2] https://www.nasdaq.com/articles/organon-ogn-fiscal-q2-revenue-beats-1