Snap (NYSE:SNAP) Issues Earnings Results

Snap (NYSE:SNAP) posted its quarterly earnings results on Wednesday. The company reported $0.03 EPS for the quarter, FiscalAI reports. Snap had a negative net margin of 4.90% and a negative return on equity of 14.61%. The business had revenue of $1.72 billion during the quarter, compared to analyst estimates of $1.73 billion. During the same quarter in the previous year, the business posted ($0.06) EPS. The company’s quarterly revenue was up 14.3% compared to the same quarter last year.

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 Price Performance

NYSE:SNAP traded up $0.33 during midday trading on Wednesday, reaching $5.92. 78,639,640 shares of the stock traded hands, compared to its average volume of 40,733,936. Snap has a 12-month low of $3.81 and a 12-month high of $9.13. The business has a 50-day moving average of $5.76 and a two-hundred day moving average of $5.42. The company has a current ratio of 2.94, a quick ratio of 2.94 and a debt-to-equity ratio of 1.75.

Insider Activity

In other Snap news, CFO Douglas Hott sold 131,884 shares of Snap stock in a transaction on Monday, August 17th. The shares were sold at an average price of $5.20, for a total value of $685,796.80. Following the transaction, the chief financial officer directly owned 2,324,563 shares of the company’s stock, valued at approximately $12,087,727.60. The trade was a 5.37% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, insider Ajit Mohan sold 6,797 shares of the company’s stock in a transaction on Wednesday, September 16th. The stock was sold at an average price of $5.82, for a total value of $39,558.54. Following the transaction, the insider directly owned 4,965,300 shares in the company, valued at approximately $28,898,046. The trade was a 0.14% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 445,926 shares of company stock valued at $2,326,930 in the last ninety days. 22.68% of the stock is currently owned by insiders.

Analyst Ratings Changes

A number of research firms have weighed in on SNAP. Weiss Ratings restated a “sell (e+)” rating on shares of Snap in a report on Thursday, October 15th. Rosenblatt Securities cut their price target on Snap from $6.40 to $6.00 and set a “neutral” rating on the stock in a report on Tuesday, August 4th. Barclays boosted their price target on Snap from $15.00 to $16.00 and gave the stock an “overweight” rating in a research report on Tuesday, August 4th. Freedom Capital raised Snap from a “hold” rating to a “strong-buy” rating in a research report on Tuesday, August 4th. Finally, BMO Capital Markets restated an “outperform” rating on shares of Snap in a research note on Tuesday, August 4th. One equities research analyst has rated the stock with a Strong Buy rating, eleven have given a Buy rating, twenty-two have assigned a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat, Snap presently has a consensus rating of “Hold” and a consensus price target of $7.71.

Snap Company Profile

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.