Snap reports upbeat revenue as holiday season fuels ad sales

Core Insights - Snap exceeded Wall Street estimates for fourth-quarter revenue, driven by increased advertiser engagement during the holiday season, resulting in a share price increase of over 2% in extended trading [1] - Total active advertisers on Snap's platform rose by 28% in the fourth quarter, highlighting the strength of direct response ads and new ad formats [1] - Revenue for the quarter increased by 10% year-over-year to $1.72 billion, surpassing analysts' average estimate of $1.70 billion [2] Revenue Forecast - Snap anticipates first-quarter revenue to be between $1.50 billion and $1.53 billion, slightly below the estimate of $1.55 billion [3] - The forecast does not account for revenue from the Perplexity integration, a $400 million deal that is still under negotiation [3] Customer Segments - Strong growth was observed in the medium-customer segment globally, with North America being the largest contributor to dollar growth in this segment [4] - The company continues to face challenges in its North America large-customer business [4] Financial Performance - Snap's outlook for adjusted EBITDA is between $170 million and $190 million, exceeding estimates of $177.9 million, as the company focuses on profitable growth through cost control [5] - The net income for the fourth quarter was $45 million, up from $9 million a year earlier, while the net loss for 2025 narrowed to $460 million from $698 million in 2024 [5] Product Development - The company is enhancing its augmented reality offerings with the launch of an independent unit, Specs, and is diversifying revenue through its subscription service Snapchat+ [6] - Subscribers for Snapchat+ increased by 71% to 24 million in the fourth quarter, while daily active users rose by 5% year-over-year to 474 million, despite a decline of 3 million from the previous quarter [6]