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SNAP Earnings Miss Estimates in Q2, Revenues Increase Y/Y
SnapSnap(US:SNAP) ZACKSยท2025-08-06 17:57

Core Insights - Snap (SNAP) reported a second-quarter 2025 loss of a penny per share, missing the Zacks Consensus Estimate for earnings of a penny, while revenues rose 8.7% year over year to $1.35 billion, beating estimates by 0.66% [2][9] Revenue Breakdown - Revenues from North America, which account for 61% of total revenues, increased 6.9% year over year to $820.6 million [3] - Revenues from Europe, making up 19.7% of revenues, surged 15.4% to $265.34 million [3] - Revenues from the Rest of the World (ROW) reached $258.99 million, up 8.2% year over year [3] - The average revenue per user (ARPU) rose 0.3% year over year to $2.87, with North America and Europe seeing ARPU increases of 8.6% and 12.3%, respectively, while ROW's ARPU declined by 5.9% [3] User Engagement - Snap's global community reached 469 million daily active users (DAU) in Q2, marking an 8.6% year-over-year increase, with a quarter-over-quarter addition of 9 million DAU [4] - North America's DAU was 98 million, down 2% year over year, while Europe's DAU was 100 million, up 3.1% year over year; ROW's DAU was 271 million, up 15.3% year over year [5] Subscription Growth - Snapchat+ approached 16 million subscribers in Q2, driving a 64% year-over-year surge in other revenue, reaching an annualized run rate of nearly $700 million [6] Advertising Performance - Snap's advertising platform showed significant improvements, with purchase volume for commerce advertisers increasing 39% year over year and total purchase-related advertising revenues growing over 25% [7][9] - The Sponsored Snaps format generated up to 22% higher conversion rates when integrated into broader advertising campaigns [7] Operating Expenses - Adjusted cost of revenues rose 11% year over year to $650.1 million, while adjusted operating expenses increased 2.2% to $631.1 million [8] - Sales and marketing expenses decreased by 2% to $202.2 million, and general and administrative expenses fell 10.5% to $183.8 million; however, research and development expenses rose 18.9% to $245.1 million [8] Financial Metrics - Adjusted EBITDA was $41.3 million, down 24.9% from the previous year, reflecting revenue growth deceleration and increased investment spending [10] - As of June 30, 2025, cash and cash equivalents, and marketable securities totaled $2.9 billion, down from $3.2 billion as of March 31, 2025 [11] Future Guidance - Snap expects third-quarter DAU to reach 476 million and projects revenues between $1.48 billion and $1.51 billion [12] - The company maintained its full-year guidance for infrastructure costs per DAU at 82-87 cents per quarter and anticipates operating in the top half of this range for Q3 [12] - EBITDA is projected to be between $110 million and $135 million in Q3 [12]