Snap Inc. (SNAP): A Bull Case Theory

Core Thesis - Snap Inc. is positioned as a misunderstood yet structurally improving platform with strong user growth and monetization potential, despite market perceptions of it as a declining social media app [2][4]. User Growth - In Q3 2025, Snap Inc. reported daily active users (DAUs) of 477 million and monthly active users (MAUs) of 943 million, reflecting year-over-year growth of 34% and 8% respectively [2]. - Over 180 million users engaged in gaming on the platform in Q3 2025, marking a 100% year-over-year increase, indicating a broadening ecosystem and user stickiness [5]. Monetization - Snap's monetization efforts are robust, with Snapchat+ revenue increasing by 54% year-over-year, achieving an annualized run rate exceeding $750 million [3]. - The company is shifting its focus from pure user growth to monetization strategies, introducing products like Sponsored Snaps and Lens+, aimed at increasing average revenue per user (ARPU) while maintaining user engagement [6]. Augmented Reality (AR) Engagement - Daily engagement with augmented reality (AR) features exceeds 8 billion lens uses, with over 350 million users interacting with AR experiences daily, highlighting the platform's scale and potential as a key differentiator in the AI era [4]. Strategic Direction - Snap is adopting a strategic flexibility akin to the "Costco Algorithm," aiming for higher value per dollar spent, suggesting a phase where sustained profitability and platform expansion can coexist [6]. - The company's fundamentals remain solid, with a focus on evolving its AR platform, which is seen as a critical component of its long-term investment case [7].