SNAP Earnings Meet Estimates in Q3, Revenues Increase Y/Y

Core Insights - Snap (SNAP) reported a Q3 2025 loss of 6 cents per share, meeting the Zacks Consensus Estimate, compared to a loss of 9 cents per share in the same period last year [1][10] - Revenues increased by 10% year-over-year to $1.51 billion, surpassing the Zacks Consensus Estimate by 1% [1][10] Revenue Breakdown - North America, accounting for 60% of total revenues, saw a 5% year-over-year increase to $898 million [2] - Europe, representing 20% of revenues, experienced a 20% rise to $298 million [2] - Revenues from the Rest of World (ROW), making up 21% of revenues, reached $311 million, up 17% year-over-year [2] User Engagement and Growth - Snap's global daily active users (DAU) reached 477 million, an 8% increase year-over-year, with an addition of 8 million DAU quarter-over-quarter [4][10] - North America's DAU was 98 million, down 3% year-over-year, while Europe's DAU was 100 million, up 1% year-over-year; ROW's DAU was 280 million, up 15% year-over-year [5][10] - Monthly active users reached 943 million, reflecting a 7% year-over-year growth [5] Subscription and Other Revenues - Other revenues, primarily from Snapchat+ subscriptions, surged 54% year-over-year to $190 million, with an annualized run rate exceeding $750 million [3] - Snapchat+ subscribers approached 17 million, marking a 35% year-over-year growth [3][6] Advertising Performance - Direct response advertising revenue increased by 8% year-over-year, driven by strong demand from small and medium-sized business advertisers [8] - Purchase-related ad revenue grew over 30% year-over-year, aided by improved campaign performance [8] - Sponsored Snaps platform showed significant effectiveness, achieving up to 22% higher conversions and 19% lower cost per action [9][11] Financial Metrics - Adjusted cost of revenues rose 5% year-over-year to $671 million, while adjusted operating expenses increased by 8% to $654 million [12] - Adjusted EBITDA was $182 million, up 38% from the previous year, with an adjusted EBITDA margin expanding by 2 percentage points to 12% [13] Cash Flow and Balance Sheet - As of September 30, 2025, cash, cash equivalents, and marketable securities totaled $3 billion, up from $2.9 billion as of June 30, 2025 [14] - Operating cash flow was $146.49 million, compared to $115.87 million in the prior year, while free cash flow increased to $93 million from $72 million [14] Guidance - Snap anticipates a decline in daily active users in Q4, with projected revenues between $1.68 billion and $1.71 billion, indicating 8-10% year-over-year growth [15] - Adjusted EBITDA is expected to range between $280 million and $310 million, reflecting improved cost discipline [15][16]