Snap Q2 revenue falls 23% YoY to $1.1 bln; stock drops 40%.

• Snap Inc. reports decline in ad revenue growth rate • False statements made to investors • Complaint alleges concealment of material facts • Class period: April 29, 2025 to August 5, 2025 • Shareholders encouraged to contact Gross Law Firm for lead plaintiff appointment • Appointment not required for recovery

Snap Inc. (SNAP) has been the subject of a shareholder class action lawsuit, which alleges that the company misled investors about its advertising revenue prospects. The lawsuit, filed on behalf of investors who purchased Snap shares between April 29, 2025, and August 5, 2025, [2] [3] contends that Snap made false statements and concealed material facts regarding its business prospects.

The complaint, filed by Robbins LLP, claims that Snap exaggerated its expected advertising revenue and growth potential, while downplaying operational challenges. Specifically, the lawsuit alleges that Snap attributed a slowdown in ad revenue growth to macroeconomic factors such as Ramadan timing and U.S. tariffs, when in reality, the company was experiencing significant operational issues with its ad platform [2].

These allegations come on the heels of a significant setback for Snap, as the company reported a 17% decline in its stock price following the announcement of its second-quarter financial results. The company attributed the slowdown in ad revenue growth to a combination of factors, including an issue with its ad platform, the timing of Ramadan, and de minimis changes in market conditions [2].

Investors are encouraged to contact the Gross Law Firm to discuss their rights and potential participation in the class action lawsuit. The firm has reminded shareholders that they do not need to serve as the lead plaintiff to be eligible for a recovery, and that they can remain an absent class member if they choose not to participate [3].

Snap's ability to navigate this legal challenge will be critical to rebuilding investor confidence. The company has faced similar issues in the past, including a 2017 settlement over misleading user growth claims [1]. To regain investor trust, Snap must address governance gaps, improve operational resilience, and diversify its revenue streams.

Investors should closely monitor the resolution of this lawsuit and Snap's response to the operational challenges highlighted in the complaint. While the company's innovations and user metrics remain compelling, the incident underscores the need for transparency, operational rigor, and diversified revenue models.

References:
[1] https://www.ainvest.com/news/snap-faces-shareholder-lawsuit-governance-risks-investor-confidence-high-growth-tech-2508/
[2] https://www.globenewswire.com/news-release/2025/08/22/3138073/32719/en/SNAP-Stockholder-Notice-Robbins-LLP-Reminds-Investors-of-the-Class-Action-Lawsuit-Against-Snap-Inc.html
[3] https://www.businesswire.com/news/home/20250821477909/en/SNAP-Investors-Have-Opportunity-to-Lead-Snap-Inc.-Securities-Fraud-Lawsuit-with-the-Schall-Law-Firm