Snap (NYSE:SNAP) Announces Earnings Results

Snap (NYSE:SNAP) posted its quarterly earnings results on Wednesday. The company reported $0.03 earnings per share for the quarter, FiscalAI reports. The firm had revenue of $1.72 billion during the quarter, compared to the consensus estimate of $1.73 billion. Snap had a negative net margin of 2.30% and a negative return on equity of 7.21%. The business’s revenue was up 14.3% compared to the same quarter last year. During the same period in the previous year, the firm posted ($0.06) earnings per share.

Here are the key takeaways from Snap’s conference call:

• Q3 revenue rose 14% year over year to $1.72 billion, while net income reached $56 million and adjusted EBITDA increased to $383 million. Gross margin expanded about 7 percentage points, and free cash flow rose 76% to $164 million.
• Advertising revenue grew just 4%, as declining upper-funnel brand spending—particularly from U.S. and Middle East consumer packaged goods advertisers—offset stronger direct-response growth. Management said direct response now represents about 77% of revenue and expects brand improvements to take hold over 2027.
• Direct-response campaigns showed improved results: app-purchase campaign revenue grew more than 54% as purchase volume more than doubled, while web-purchase campaign revenue increased 11%. Snap is betting that AI-powered ad tools, better measurement, and new placements will help turn these gains into larger advertiser budgets.
• For Q4, Snap guided to revenue of $1.950 billion–$1.985 billion and adjusted EBITDA of $490 million–$525 million. Other revenue, led by subscriptions, grew 84% in Q3, and Snap surpassed 30 million paid subscribers.
• Snap warned that evolving youth-related regulation could bring product changes, higher compliance and legal costs, and harm to user growth or engagement. It will also make global monthly active users, rather than daily active users, its primary audience metric starting in Q1 2027.

Snap Stock Down 2.3%

SNAP traded down $0.12 during mid-day trading on Friday, reaching $4.97. 40,471,399 shares of the stock were exchanged, compared to its average volume of 45,585,438. Snap has a 1 year low of $3.81 and a 1 year high of $9.13. The company has a debt-to-equity ratio of 1.75, a quick ratio of 2.94 and a current ratio of 2.94. The stock has a market capitalization of $8.41 billion, a PE ratio of -55.23 and a beta of 1.23. The company has a 50 day moving average price of $5.75 and a two-hundred day moving average price of $5.41.

Key Headlines Impacting Snap

Here are the key news stories impacting Snap this week:

• Positive Sentiment: Snapchat+ surpassed 30 million paid subscribers, adding 5 million since February and providing a growing source of subscription revenue beyond advertising. Snapchat surpasses 30M paid subscribers
• Positive Sentiment: Snap reportedly beat adjusted earnings expectations, while revenue grew 14.3% year over year. That improvement was not enough to offset the top-line miss. Snap Shares Fall More Than 10% as Revenue and User Growth Miss Forecasts Despite Higher Earnings
• Neutral Sentiment: Unusually high call-option activity—105,767 contracts, about 51% above typical volume—may signal bullish positioning, but options trading can be speculative and does not establish a change in fundamentals. Traders Purchase High Volume of Call Options on Snap
• Negative Sentiment: Third-quarter revenue was $1.72 billion, below the $1.73 billion estimate, and daily active users also missed forecasts. The shortfalls raised concerns about user momentum and the pace of an advertising recovery. Snap shares fall as revenue and daily users miss estimates
• Negative Sentiment: Several firms cut price targets: JPMorgan lowered its target to $5 and assigned an underweight rating; Cantor Fitzgerald cut to $5 and kept a neutral rating; UBS reduced its target to $6 and stayed neutral. Barclays also halved its target to $8, though it retained an overweight rating. The cluster of reductions underscores lowered expectations. JPMorgan analyst recommendations

Insider Activity

In other Snap news, CAO Rebecca Morrow sold 20,000 shares of the company’s stock in a transaction dated Wednesday, September 9th. The shares were sold at an average price of $5.35, for a total value of $107,000.00. Following the completion of the sale, the chief accounting officer directly owned 578,105 shares of the company’s stock, valued at approximately $3,092,861.75. This represents a 3.34% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, General Counsel Zachary M. Briers sold 11,257 shares of the stock in a transaction dated Thursday, September 3rd. The shares were sold at an average price of $6.00, for a total transaction of $67,542.00. Following the completion of the sale, the general counsel owned 2,345,534 shares of the company’s stock, valued at approximately $14,073,204. This trade represents a 0.48% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last three months, insiders have sold 445,926 shares of company stock worth $2,326,930. Company insiders own 22.68% of the company’s stock.

Analysts Set New Price Targets

SNAP has been the topic of a number of research reports. Piper Sandler reaffirmed a “neutral” rating on shares of Snap in a research note on Tuesday, August 4th. DA Davidson raised their price objective on Snap from $5.00 to $5.25 and gave the company a “neutral” rating in a research note on Tuesday, August 4th. Stifel Nicolaus set a $7.50 price objective on Snap in a report on Tuesday, August 4th. Wall Street Zen lowered Snap from a “buy” rating to a “hold” rating in a research report on Saturday, September 12th. Finally, Citizens Jmp reaffirmed a “market perform” rating on shares of Snap in a research report on Tuesday, August 4th. One analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating, twenty-three have assigned a Hold rating and two have assigned a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of “Hold” and an average price target of $7.31.

About Snap

Snap Inc is a technology and social media company best known for Snapchat, a visual messaging and social networking application. Snapchat enables users to communicate through photos, videos, messages and Stories, while offering creative tools such as augmented reality (AR) Lenses and filters. The platform also includes features such as Snap Map, Spotlight and content from publishers and creators.

Snap generates most of its revenue from digital advertising, including video, augmented reality and other advertising formats delivered across Snapchat.