Financial Data and Key Metrics Changes - Revenue increased by 9% year over year to reach $1,340,000,000 in Q2, driven primarily by growth from small and medium customers and lower funnel objectives [7][28] - Adjusted EBITDA was $41,000,000 in Q2 compared to $55,000,000 in Q2 of the prior year, with a net loss of $263,000,000 in Q2 compared to a net loss of $249,000,000 in the prior year [32][33] - Free cash flow was $24,000,000 in Q2, while operating cash flow was $88,000,000, with trailing twelve months free cash flow at $392,000,000 [33] Business Line Data and Key Metrics Changes - Advertising revenue reached $1,174,000,000 in Q2, up 4% year over year, primarily driven by growth in Doctor advertising revenue, which increased by 5% year over year [28][29] - Other revenue increased by 64% year over year to reach $171,000,000, with Snapchat Plus subscribers approaching 16,000,000, marking a 42% year-over-year increase [31] - Time spent on Spotlight grew by 23% year over year, contributing more than 48% of total time spent watching content [13] Market Data and Key Metrics Changes - Monthly active users (MAU) reached 932,000,000 in Q2, an increase of 64,000,000 or 7% year over year [6] - Daily active users (DAU) reached 469,000,000, an increase of 37,000,000 or 9% year over year [27] - North America MAU was flat year over year at 159,000,000, while unique SNAP senders grew by 2% year over year [27] Company Strategy and Development Direction - The company is focused on growing its community, enhancing value for advertisers, and investing in augmented reality (AR) [6][10] - A new distributed structure for engineering teams aims to better align technology investments with business priorities [10] - The introduction of Lens Plus, a new subscription tier, aims to enhance user engagement and drive revenue growth [8][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in Q2 related to ad platform changes and the timing of Ramadan, but expressed optimism about recovery and growth in advertising revenue [28][42] - The company anticipates continued growth in DAU and revenue, with Q3 guidance for revenue set between $1,475,000,000 and $1,505,000,000 [34] - Management emphasized the importance of building demand for new ad units like sponsored snaps, which are expected to contribute significantly to revenue growth [30][72] Other Important Information - The company has committed over $3,000,000,000 to develop a vertically integrated AR platform over the past eleven years [9] - Snapchatters engage with AR Lenses more than 8,000,000,000 times each day, highlighting the platform's strong engagement [15] - The company repurchased 30,000,000 shares at a cost of $243,000,000 in Q2 to manage the impact of stock-based compensation on share count [33] Q&A Session Summary Question: Insights on sponsored snaps and auction pricing issue - Management highlighted that sponsored snaps have driven significant growth in reach and conversions for advertisers, with early signs of positive engagement [40] - The auction pricing issue in Q2 was attributed to changes in the ad platform, which have since been reverted, leading to improved ad revenue growth [42][45] Question: Brand advertising performance - Brand advertising revenue was flat in Q2, with the majority of deceleration observed in Doctor advertising revenue [50] Question: Long-term vision for AR and specs - The company is committed to reinventing computing through AR, with a fully integrated stack that differentiates it from competitors [52][54] Question: Growth of small and medium customer base - The small and medium customer segment was the largest contributor to ad revenue growth in Q2, with improvements in ad products and automation driving strong results [81] Question: Reception of Lens Plus and growth potential - Early reception of Lens Plus is positive, with expectations that exclusive Lenses will drive significant growth [86]

Group 1 - Snap shares fell 17% after market close due to slower revenue growth in Q2, partly caused by a pricing mistake for advertisers [1] - Q2 revenue grew 39% year-over-year to $1.34 billion, with advertising revenue of $1.174 billion rising 4% [3] - Daily active users increased by 9% year-over-year to 469 million [2] Group 2 - The timing of Ramadan affected advertising revenue comparisons, as the holiday occurred earlier in Q1 this year [3] - The company expects Q3 revenue to be between $1.475 billion and $1.505 billion, with daily active users projected at 476 million [4] - Snap delivered adjusted EBITDA of $41 million and $24 million in free cash flow [4] Group 3 - Time spent on Spotlight grew 23% year-over-year in Q2, now accounting for over 40% of total content viewing time [5] - Snapchat+ subscribers approached 16 million in Q2 [5] - Snap plans to launch standalone lightweight AR glasses in 2026, aiming to enhance its position in augmented reality [5] Group 4 - Sponsored Snaps initiative has shown effectiveness, delivering up to a 22% increase in conversions when included in campaigns [6] - Snapchat introduced Sponsored Snaps from creators, allowing advertisers to send messages directly from creators to users [6]

Financial Performance - Snap reported second-quarter revenue of $1.345 billion, reflecting a 9% year-over-year increase, surpassing the Street consensus estimate of $1.344 billion [1] - The company incurred a loss of 16 cents per share, which aligned with analyst expectations [1] User Growth - Snap ended the quarter with 932 million monthly active users, marking a 7% increase year-over-year [2] - The number of daily active users reached 469 million, up 9% year-over-year [2] Product and Feature Development - CEO Evan Spiegel highlighted the growth in the global community and emphasized investments in AI and augmented reality [3] - Spotlight achieved over 550 million monthly active users on average, with time spent on Spotlight increasing by 23% year-over-year, now accounting for over 40% of total content time spent [3] - Snap Map also grew to more than 400 million monthly active users during the quarter [4] Future Outlook - The company is focusing on diversifying revenue growth through improvements in its ad platform, aided by advancements in AI [5] - Snap plans to launch its first consumer-ready Specs AR glasses in 2026, which is seen as a significant milestone for the company [5] Stock Performance - Following the earnings report, Snap's stock declined by 14.48% to $8.03 in after-hours trading, within a 52-week trading range of $7.08 to $13.28 [6]

Product & Technology - Snap has been investing in glasses for over 11 years, even before Snapchat had a chat feature, seeing a huge opportunity to help people experience the world and technology simultaneously [1] - The company's vision for AR glasses is to make computers wearable, integrating technology into people's lives without forcing them to choose between technology and living in the moment [2][3] - Specs are positioned as a wearable computer with smartphone capabilities, differentiating them from feature phone smart glasses which are more like AirPods with a camera [5] Market Positioning & Pricing - The company acknowledges the need to help people try and experience specs, as they represent a fundamentally new type of computing experience [4] - Specs will be more expensive than Meta smart glasses and Ray-Ban smart glasses, but offer significantly more capabilities [6] - The company aims to address consumer exhaustion from looking at screens and offer a new and different computing experience [4] Challenges & Opportunities - A key challenge is positioning specs against existing smart glasses, which are not as capable [5] - The company sees an opportunity to differentiate specs by highlighting their smartphone-like capabilities compared to the limited functionality of smart glasses [5]