NEW YORK, August 9, 2026, 17:07 EDT
- Snap ended trading on Friday at $5.33, marking a 13.6% weekly increase. The advance was smaller compared to Tuesday’s close of $5.79.
- Initial estimates show that other revenue accounted for around 57% of the $254 million year-on-year sales growth in Q2.
- North America and Europe accounted for 81.1% of revenue while representing 38.5% of daily users.
Snap’s rally following earnings obscured a subtler change. The bulk of the quarter’s additional sales came from direct revenue. U.S. cash markets did not open on Sunday. Trading on the NYSE is set to begin Monday at 9:30 a.m. EDT.
Other revenue jumped 85% to $316 million. Advertising revenue increased 9% to reach $1.28 billion. Spending related to the World Cup and bigger advertisers in North America contributed positively to advertising operations.
This is significant as direct revenue is less dependent on advertiser spending. Additionally, it still has growth potential. Chief Executive Evan Spiegel noted that under 3% of monthly users currently pay, pointing to “substantial room to grow direct revenue over time.” Q4cdn
A less favorable user mix is evident. North America and Europe contributed 81.1% of second-quarter revenue, but made up just 38.5% of daily active users. Daily user numbers declined in both regions.
The chart revealed a significant earnings gap, followed by some retracement. Shares surged 14.9% on Tuesday, then dropped 7.9% on Wednesday. The stock still closed 13.6% higher than the previous Friday.
| Session | Close | Daily move | Volume |
|---|---|---|---|
| Monday, Aug. 3 | $5.04 | up 7.5% | 91.44 million |
| Tuesday, Aug. 4 | $5.79 | up 14.9% | 88.73 million |
| Wednesday, Aug. 5 | $5.33 | down 7.9% | 75.23 million |
| Thursday, Aug. 6 | $5.22 | down 2.1% | 32.03 million |
| Friday, Aug. 7 | $5.33 | up 2.1% | 42.44 million |
| Week versus July 31 | $5.33 | up 13.6% | — |
This initial mix analysis is based on company data rounded to the nearest value. Minor discrepancies may result from this rounding.
| Revenue stream | Q2 revenue | Year-on-year growth | Share of Q2 sales | Preliminary share of dollar growth |
|---|---|---|---|---|
| Advertising | $1.283 billion | up 9% | 80.2% | 42.9% |
| Other revenue | $316 million | up 85% | 19.8% | 57.1% |
| Total | $1.599 billion | up 19% | 100.0% | 100.0% |
Other revenue accounted for just one-fifth of sales for the quarter, but was responsible for an estimated 57.1% of the annual increase in dollars. Growth was led by Snapchat+, Memories Storage, and Lens+.
Regional filings highlight the limitation. Monetization increased significantly in both regions where daily users declined.
| Region | Q2 daily users | User growth | ARPU | ARPU growth | Q2 revenue | Revenue share |
|---|---|---|---|---|---|---|
| North America | 92 million | -7% | $10.26 | +23% | $942.9 million | 59.0% |
| Europe | 98 million | -2% | $3.62 | +36% | $353.8 million | 22.1% |
| Rest of world | 303 million | +12% | $1.00 | +4% | $302.3 million | 18.9% |
Average revenue per user (ARPU) in North America increased by 23%, while in Europe, ARPU was up 36%. User numbers in the rest of the world rose 12%, though ARPU reached only $1.00—less than one-tenth of the figure in North America.
The company reported stronger cash generation, with free cash flow for the second quarter at $121 million. Free cash flow over the past 12 months totaled $706 million. Adjusted EBITDA increased to $250 million.
Snap forecast third-quarter revenue between $1.70 billion and $1.74 billion, with the midpoint signaling preliminary growth of 14.1%, trailing the 19% seen in Q2. The midpoint of its EBITDA outlook stands at $325 million, pointing to approximately 78.5% growth from a year earlier.
Wall Street sentiment is cautious. According to a FactSet summary cited by WSJ, 33 out of 48 analysts have Hold recommendations. The median price target stands at $6.88, representing a 29.1% premium to Friday’s closing price.
| Current recommendation | Analysts | Share of coverage |
|---|---|---|
| Buy | 8 | 16.7% |
| Overweight | 4 | 8.3% |
| Hold | 33 | 68.8% |
| Underweight | 0 | 0.0% |
| Sell | 3 | 6.3% |
| Consensus | Hold | — |
Jefferies Financial Group Inc. NYSE:JEF analyst James Heaney described the quarter as “early evidence of the ads business improving.” He noted that ongoing momentum in the second half would be required for a significant rerating. Investor’s Business Daily
On Friday, co-founder and chief technology officer Robert Murphy reported selling 4 million shares valued at approximately $21.6 million. He additionally donated 1.22 million shares to charity. The transactions were executed under a previously adopted Rule 10b5-1 trading plan.
Snap’s investor schedule shows no planned event for the upcoming week. The company’s next scheduled catalyst is a Specs launch in Los Angeles on September 16. As a result, short-term trading is expected to focus on post-earnings performance and analyst updates.
Risks: User declines in North America and Europe might persist beyond improvements in ARPU. Snap increased its annual infrastructure cost outlook by $50 million at both ends to support AI projects. Lawsuits and regulations concerning youth could push expenses higher or impact user engagement.
The test can be tracked. Direct revenue should continue to be an outsized driver of expansion. Snap must address user losses, especially in its most valuable segments. Progress on both fronts is likely required before any substantial post-earnings rerating.
Related articles: NYSE:SNAP
