SANTA MONICA, Calif., Feb 4, 2026, 15:45 PST
- Snap reported holiday-quarter revenue of $1.72 billion and a profit of $45 million.
- Snapchat’s parent company projected first-quarter revenue between $1.50 billion and $1.53 billion, falling short of analysts’ expectations.
- Daily active users climbed to 474 million year-over-year but dipped by 3 million compared to the previous quarter.
Snap delivered an unexpected profit in the holiday quarter and exceeded revenue forecasts, yet its first-quarter sales guidance fell short, sending the Snapchat owner’s shares down roughly 3% in after-hours trading.
The report arrives as investors demand Snap prove it can convert ad revenue growth into consistent cash flow, all while continuing to invest in augmented reality hardware. With user growth slowing, the company is also ramping up its focus on subscriptions and fresh ad products.
Snap’s ad business faces stiff competition from larger rivals with wider reach, and advertisers don’t hesitate to shift budgets when results falter. The holiday quarter remains the key gauge for demand, while the following quarter often reveals any vulnerabilities.
Snap reported revenue of roughly $1.72 billion for the quarter ended Dec. 31, up 10% year over year. Net income came in at $45 million. Earnings per share, diluted, were 3 cents, with a gross margin of 59%.
“Our Q4 results started to show the effects of our strategic shift toward profitable growth,” CEO Evan Spiegel said in a statement as Snap rolled out a new $500 million share buyback program. https://investor.snap.com/news/news-detail…
Snap reported a 28% increase in total active advertisers for the quarter, boosted by direct response ads—those aimed at spurring actions like app installs or purchases—and newer offerings like Sponsored Snaps and Promoted Places. Its “other revenue,” which covers Snapchat+ subscriptions, surged 62% to $232 million, while Snapchat+ subscribers climbed 71% to 24 million.
User growth remained uneven. Daily active users climbed 5% year-over-year to 474 million but dropped by 3 million from the previous quarter. Meanwhile, monthly active users neared the 1 billion mark.
Snap projects first-quarter revenue between $1.5 billion and $1.53 billion, with adjusted EBITDA estimated at $170 million to $190 million. This adjusted EBITDA figure excludes interest, taxes, and certain non-cash expenses, offering a clearer view of cash-like earnings. “Q4 was a pivotal quarter for our business,” CFO Derek Andersen told analysts, while also setting 2026 infrastructure cost guidance at $1.6 billion to $1.65 billion. https://www.investing.com/news/transcripts…
Snap’s first-quarter revenue forecast does not factor in any income from its planned Perplexity integration, a $400 million deal revealed last year, as the two companies have yet to settle on a wider rollout strategy.
Advertisers are shifting their focus toward platforms like Meta and TikTok, drawn by their ability to deliver larger audiences at scale. “The ads platform (of Snap) still has a long way to go in attracting big budgets from enterprise advertisers,” said Emarketer analyst Max Willens. https://www.reuters.com/business/snap-fore…
The near-term outlook remains shaky. Snap’s first-quarter revenue forecast came in below expectations, daily user counts fell from the previous period, and the company disclosed it had deleted over 400,000 accounts following the launch of platform-wide age verification in Australia, a move tied to a new law mandating users be at least 16. Heavy investment in Specs and infrastructure risks squeezing margins if ad growth falters.
Before the earnings release, analysts zeroed in on a key tension: can Snap continue shrinking losses even as it pours money into augmented reality glasses via its Specs division, and will growth in non-advertising revenue be enough to boost profits?
