Snap Stock Plummets Amid Financial Struggles: Q2 Earnings Disappointments and Regulatory Pressures.

Snap's stock has fallen 21.75% after releasing Q2 financial results showing an EPS loss of $0.16 and revenue slightly below expectations at $1.34 billion. Despite surpassing analyst forecasts for daily active users, the average revenue per user fell short, contributing to the negative market reaction. The company faces challenges in the competitive social media landscape, including Apple's privacy changes and the dominance of larger platforms like Meta. Snap has projected Q3 revenue to be between $1.475 billion and $1.505 billion, but its future remains uncertain.

Snap Inc.'s (SNAP) stock tumbled 21.75% after the company released its Q2 2025 financial results, with earnings per share (EPS) showing a loss of $0.16 and revenue slightly below expectations at $1.34 billion. The company's stock has been under pressure, with a 12% drop following its Q1 results in April and a deeper slump in 2022 [1].

Despite surpassing analyst forecasts for daily active users, Snap's average revenue per user (ARPU) fell short, contributing to the negative market reaction. The company's ad platform faced issues during the quarter, leading to some advertisers winning campaign auctions at "substantially reduced prices," according to Snap's letter to investors [1].

Snap's revenue growth of 9% year-over-year was below estimates of $1.350 billion, and the company reported a net loss of $262.6 million, compared to a net loss of $248.6 million in the same quarter last year [2]. The company's adjusted EBITDA for the second quarter came in at $41 million, trailing the $53 million that StreetAccount was projecting [2].

Snap has projected Q3 revenue to be between $1.475 billion and $1.505 billion, ahead of Wall Street estimates of $1.475 billion. However, the company's future remains uncertain, with analysts expressing caution about its ability to grow its direct response business in line with the market [1].

Snap's much-larger rival Meta Platforms (META) posted 22% sales growth for the same period, while the much-smaller Reddit (RDDT) managed to post 78% sales growth for its digital advertising business [1]. Snap's Snapchat+ subscription service reached 16 million users in the second quarter, representing a 42% year-over-year increase [2].

Snap shares were down 13% year-to-date as of Tuesday's close and appear set to tumble further. The stock is more than 80% below record-highs reached late in 2021 [1].

References:
[1] https://www.investors.com/news/technology/snap-stock-tumbles-q2-2025-results/?mod=newsviewer_click&refcode=aflMarketWatch&src=A00619
[2] https://www.cnbc.com/2025/08/05/snap-q2-earnings-report-2025.html