Snap Inc. (SNAP) share price jumped 7% after-hours on Monday after the social media firm delivered stronger-than-expected second-quarter financial results, powered by a rebound in its core advertising business and rapid growth in consumer subscriptions.
The parent company of Snapchat reported revenue of $1.60 billion for the quarter ended June, a 19% increase compared to the same period last year. The figure topped average analyst forecasts of $1.54 billion.
The company's advertising business grew 9% year-over-year to $1.28 billion, driven by stronger demand from large North American brands and gains in international markets. Meanwhile, Snap’s direct-to-consumer revenues—including Snapchat+, Lens+, and expanded cloud storage for Memories—surged 85% to $316 million.
Audience growth also reaccelerated during the quarter. Global daily active users grew to 493 million, up from 483 million in the prior quarter, beating Wall Street expectations. Monthly active users approached one billion, standing at 971 million.
Chief Executive Officer Evan Spiegel highlighted the company's dual focus on operational efficiency and long-term hardware innovation, specifically the commercial debut of Snap's augmented reality glasses, known as Specs.
"Our objective now is to turn our scale into durable growth and stronger cash generation, while demonstrating the long-term value of our investment in SPECS," Spiegel stated in prepared remarks. "The long-term opportunity to develop the next computing platform is absolutely enormous."
Addressing investor queries regarding the competitive landscape alongside well-funded technology peers, Spiegel emphasized the company's early footprint in augmented reality.
"What's so unique about this opportunity for us is really that we're a first mover," Spiegel said during an investor call. "We are really approaching this investment with a lot of discipline."
The company plans to showcase the product's full capabilities at a dedicated event in Los Angeles on September 16.
For the third quarter of 2026, Snap expects revenue to range between $1.70 billion and $1.74 billion, above average consensus estimates of $1.69 billion.
For the full year 2026, the company raised its infrastructure cost guidance to between $1.65 billion and $1.70 billion (up from $1.60 billion to $1.65 billion previously) to support expanding machine learning and AI operations.
Looking further ahead, management expects continued gross margin improvements and margin expansion to pave the way for sustained net income profitability starting in 2027. Following the completion of its current share repurchase plan in the fourth quarter, Snap intends to launch a new multi-year dilution management program to maintain a stable share count in 2027.
Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes.
However, one user highlighted the fact that the company is not growing at the pace its software peers (like Meta) are growing.
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SNAP stock has lost 35% year-to-date.
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