New York, Feb 5, 2026, 14:59 EST — Regular session
Snap Inc shares dropped roughly 12% to $5.22 Thursday afternoon, moving between $6.38 and $5.19 on heavy volume.
The decline underscores how guidance continues to drive sentiment for ad-focused apps, even if the quarterly results appear strong. Investors are looking for solid progress in performance advertising and fresh revenue streams that don’t rely heavily on a handful of large marketing deals.
Snap has repositioned itself as a company aiming for steadier, more “profitable growth.” Yet, the market is currently pricing the stock like a high-beta ad proxy once more.
Late Wednesday, Snap projected first-quarter revenue between $1.50 billion and $1.53 billion, falling short of analysts’ consensus estimate of $1.55 billion. The company excluded any revenue from its Perplexity integration — a $400 million deal announced last year — since the partners haven’t finalized plans for a wider rollout. Meanwhile, advertisers continue favoring bigger players like Meta and TikTok. Emarketer analyst Max Willens noted Snap’s ad platform “still has a long way to go” before it captures significant enterprise budgets. Snap also forecast adjusted EBITDA of $170 million to $190 million for the quarter. Reuters
Snap reported a 10% rise in revenue for the fourth quarter, reaching $1.716 billion, with net income at $45 million and free cash flow hitting $206 million. Revenue from other sources, including Snapchat+ subscriptions, surged 62% to $232 million. The company also saw a 28% increase in total active advertisers compared to last year. The board approved a $500 million share buyback program set to run over the next 12 months. CEO Evan Spiegel highlighted the quarter as a shift toward “profitable growth,” driven by investments in augmented-reality products and the consumer debut of Specs. Snap Inc.
Adjusted EBITDA measures profit by excluding interest, taxes, depreciation, amortisation, and certain one-off items. Bulls favor it since it highlights operating momentum without the distortion of financing costs or accounting quirks.
Thursday’s analyst response was all over the place. B. Riley’s Naved Khan bumped Snap up to a “buy” from “neutral,” keeping the price target steady at $10. But others weren’t convinced. Canaccord Genuity’s Maria Ripps and Wells Fargo’s Ken Gawrelski both trimmed their targets following the outlook, according to Barron’s.
Traders are focused on whether the company can turn advertiser growth into actual revenue, not just increased activity, especially as budgets shift between apps. The buyback might provide some support, but it won’t resolve the weak top-line guidance.
The risk is straightforward: a turbulent ad market combined with stiffer competition could easily turn a slight guidance miss into yet another stock reset, especially given the already fragile sentiment.
Snap’s first-quarter earnings are due next, with Wall Street Horizon marking April 28 as the tentative date. The site notes, however, that this timing isn’t set in stone. wallstreethorizon.com
