NEW YORK, July 25, 2026, 14:05 ET — U.S. markets have shut for the day.
Snap shares ended Friday at $4.35, dropping 1.4% for a third consecutive decline. The stock has fallen roughly 4% since the previous Friday. The Nasdaq Composite retreated 2.1%.
The drop intensified focus ahead of second-quarter results. Whether rapid growth in non-ad revenue will continue to balance out sluggish advertising remains in focus. Snap will release earnings after the close on Aug. 3.
Based on Snap’s disclosed first-quarter numbers, roughly 80% of its $166 million sales uptick came from Other Revenue, with advertising making up the rest.
Advertising continued to account for about 81% of overall revenue. Growth is being driven by the newer business segment, but not the entire company.
| Q1 2026 revenue breakdown | Revenue | Annual growth | Sales proportion | Dollar growth share |
|---|---|---|---|---|
| Advertising | About $1.24 billion | 3% | About 81% | About 20% |
| Other Revenue | $285 million | 87% | About 19% | About 80% |
| Total | $1.529 billion | 12% | 100% | 100% |
Segment growth figures are estimates due to rounding. Growth rates are based on Snap’s published results.
This combination shields from fluctuations in advertising cycles. It also highlights that the headline 12% rise was backed by minimal advertising growth.
The company projects second quarter revenue between $1.52 billion and $1.55 billion. The midpoint suggests an approximate 14% increase year-over-year, while sequential growth stands at just 0.4%. These figures represent company projections rather than actual results.
Snap has projected adjusted EBITDA between $175 million and $200 million. The company anticipates restructuring charges ranging from $95 million to $130 million, mainly impacting the second quarter. Snap aims to cut annualized costs by over $500 million in the second half.
CEO Evan Spiegel stated, “In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow.” Snap Inc.
The number of global daily users increased by 5% to 483 million. In North America, user numbers fell, while revenue for the region was up just 2%. Average revenue per user reached $3.17, falling short of the $3.21 analysts had projected.
Ad delivery outpaced growth in advertising spend. Impressions increased by roughly 17%, but effective ad prices dropped approximately 12%. Major North American advertisers continued to weigh on results.
Lloyd Walmsley, an analyst at Mizuho, lowered his price target to $5 from $6 this week while maintaining a Neutral rating. The firm pointed to advertising struggles, challenges with user growth, and uncertain outcomes from Specs.
The $5 price target implies a potential gain of roughly 15% from Friday’s closing price. However, Snap shares have dropped 46% so far this year and are down 55% over the past 12 months.
Two notable indicators arrive next week. Snap’s annual meeting is set for July 30, while Reddit Inc. NYSE:RDDT will announce its Q2 results after markets close that same day, providing a comparable perspective ahead of Snap’s own earnings.
Snap reached a settlement this week with a teenage plaintiff in a lawsuit over social media harm. Details of the agreement were not made public. Wider litigation at both state and federal levels continues in the industry.
Risks are still clustered. Declines in the ad market, user losses in North America, instability in the Middle East, spending on Specs and greater regulatory expenses may counteract gains from subscriptions.
The earnings assessment is straightforward. Investors require accelerated ad revenue growth, while maintaining the cash improvements driving Snap’s recovery.
