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]

Financial Data and Key Metrics Changes - Total revenue increased by 10% year-over-year to $1.51 billion, driven by improved advertising demand and the expansion of direct revenue streams [5][30] - Advertising revenue reached $1.32 billion, up 5% year-over-year, with direct response advertising revenue increasing by 8% year-over-year [30][31] - Net loss reduced by more than 30% year-over-year to $104 million, reflecting progress toward sustained profitability [7][36] - Adjusted EBITDA was $182 million, with adjusted EBITDA margins expanding to 12% [7][35] Business Line Data and Key Metrics Changes - Other revenue, including Snapchat Plus subscription revenue, increased by 54% year-over-year to $190 million [5][30] - Direct response advertising revenue growth was driven by strong demand for pixel purchase and app purchase optimizations, particularly from small and medium-sized business clients [30][31] - The North America large client solutions business experienced a modest decline, while the SMB advertising business grew over 25% [31][64] Market Data and Key Metrics Changes - Advertising revenue growth accelerated in Europe and the rest of the world, with Europe growing by 12% and the rest of the world by 13% year-over-year [31][32] - North America accounted for approximately 43% of total global revenue, decreasing as a share of total revenue by roughly 10 percentage points over the past two years [32] - Global impression volume grew approximately 22% year-over-year, although total eCPMs decreased by about 13% due to increased inventory from Sponsored Snaps [33] Company Strategy and Development Direction - The company aims to reach 1 billion monthly active users globally, with a focus on enhancing user engagement through new features and conversation starters [4][15] - Investments in augmented reality and generative AI are central to the company's long-term strategy, with significant user engagement in AR experiences [15][16] - The company is recalibrating investments in community growth and cost structures to improve financial efficiency [12][13] Management's Comments on Operating Environment and Future Outlook - Management anticipates potential declines in daily active users in Q4 due to internal and external factors, including regulatory changes and age verification initiatives [15][56] - The company remains committed to improving monetization efficiency and ensuring compliance with evolving regulations [15][56] - Management expressed confidence in the long-term growth potential, supported by a robust balance sheet and cash flow generation [37] Other Important Information - The company has authorized a new share repurchase program of $500 million to manage share count for long-term shareholders [40] - A partnership with Perplexity AI will integrate conversational search into Snapchat, expected to enhance user experience and generate revenue starting in 2026 [29][44] Q&A Session Summary Question: On the Perplexity partnership, is the cash stock split already determined? - Management indicated that the cash and stock split for the Perplexity partnership is not finalized and will depend on future developments [42][44] Question: How do you see Snap's role evolving as a distribution channel? - Management highlighted the opportunity to distribute AI agents through the chat interface and Sponsored Snaps, enhancing customer experiences [50][52] Question: Can you provide an update on direct response advertising growth? - Direct response revenue grew by 8% year-over-year, with strong performance in Europe and the rest of the world, while North America lagged [60][63] Question: What is the conviction level on keeping infrastructure costs flat next year? - Management expressed confidence in maintaining flat infrastructure costs through improved capacity utilization and cost structure optimization [66][67] Question: What is the latest thinking on Spectacles and potential financial partners? - Management did not provide specific updates on financial partnerships but emphasized the advanced AR software stack and its potential [69]

Financial Data and Key Metrics Changes - In Q3 2025, total revenue increased by 10% year-over-year to $1.51 billion, driven by improved advertising demand and the expansion of direct revenue streams [5][29] - Advertising revenue reached $1.32 billion, up 5% year-over-year, primarily due to growth in direct response advertising revenue, which increased by 8% year-over-year [29][30] - Adjusted EBITDA was $182 million, an improvement of $50 million compared to the prior year, with a net loss reduced by over 30% year-over-year to $104 million [6][36] - Free cash flow was $93 million in Q3, with a total of $414 million over the trailing 12 months [6][37] Business Line Data and Key Metrics Changes - Direct response advertising revenue increased by 8% year-over-year, with strong demand from small and medium-sized business customers [5][29] - Other revenue, including Snapchat Plus subscription revenue, surged by 54% year-over-year to $190 million [5][29] - The community reached 477 million daily active users, an increase of 34 million or 8% year-over-year [4] Market Data and Key Metrics Changes - Advertising revenue growth in Europe accelerated to 12% year-over-year, while the rest of the world saw a 13% increase [30] - North America advertising revenue grew only 1% year-over-year, with the SMB segment growing over 25% [30][31] - Global impression volume grew approximately 22% year-over-year, although total eCPMs decreased by about 13% due to increased inventory [32] Company Strategy and Development Direction - The company aims to reach 1 billion monthly active users globally and is focusing on enhancing user engagement through new features and conversation starters [4][7] - Investments in augmented reality and AI are prioritized, with plans to introduce new monetization tools and premium offerings [5][20] - The strategy includes recalibrating investments in community growth and optimizing cost structures to improve financial efficiency [11][12] Management's Comments on Operating Environment and Future Outlook - Management anticipates potential declines in daily active users in Q4 due to regulatory changes and internal initiatives [13] - The company remains committed to long-term growth despite short-term engagement headwinds, focusing on monetization efficiency and compliance with regulations [12][13] - Future revenue guidance for Q4 is set between $1.68 billion and $1.71 billion, implying year-over-year growth of 8%-10% [37] Other Important Information - The company has approximately $3 billion in cash and marketable securities, providing financial flexibility for future investments [6][37] - A new share repurchase program of $500 million has been authorized to manage share count for long-term shareholders [39] Q&A Session Questions and Answers Question: On the Perplexity partnership, is the cash stock split already determined? - Management expressed excitement about the Perplexity partnership, emphasizing its potential to enhance Snapchat's role as a messaging service and the unique opportunity to distribute AI agents through the chat interface [41][43] Question: Should we presume that the reason for the leverage in cost of revenue is due to not paying out to content owners? - Management clarified that the improvement in gross margins is attributed to a mix shift towards higher-margin ad formats like Sponsored Snaps and Spotlight, which have lower associated costs [42][46] Question: How do you see Snap's role evolving as a distribution channel? - Management highlighted the opportunity to open up the chat interface to more AI agents and conversational commerce experiences, indicating a strategic focus on enhancing customer engagement through these channels [47][49] Question: Could you talk about your conviction level on keeping infrastructure costs flat next year? - Management indicated a strong focus on improving capacity utilization and efficiency in infrastructure costs, aiming to maintain flat costs into 2026 [60][61] Question: What is the latest thinking on Spectacles and potential financial partners? - Management is preparing for the public release of Spectacles and is considering various options to accelerate technical leadership in the AR space, including establishing a standalone subsidiary for better flexibility [63]

Q3 2025 Earnings Slides November 5, 2025 Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements regarding guidance, our future results of operations or financial condition, future stock repurchase programs or stock dividends, business strategy and plans, user growth and ...

Core Viewpoint - Snap has officially launched a comprehensive advertising product and solution specifically designed for app advertisers, named App Power Pack, aimed at enhancing ad efficiency and investment returns for outbound enterprises on Snapchat [1] Group 1: Product Features - App Power Pack can be seamlessly integrated into existing or new advertising campaigns with minimal additional effort required from advertisers [1] - The solution includes innovative ad formats and improved performance, supporting both SKAdNetwork (SKAN) and non-SKAN advertising campaigns [1] - Data indicates that products related to App Power Pack can increase app installation rates by over 25% [1]