Snap (SNAP) Q2 2026 earnings summary

Executive summary

• Revenue grew 19% year-over-year to $1.6 billion in Q2 2026, driven by strong advertising, subscription, and direct revenue growth, with ARPU rising to $3.25.

• Net loss narrowed to $164 million from $263 million year-over-year, and Adjusted EBITDA surged to $250 million from $41 million.

• Monthly Active Users reached 971 million, and Daily Active Users rose 5% to 493 million, reflecting strong global community growth.

• Free Cash Flow improved to $121 million in Q2 2026, up from $24 million year-over-year.

• AI-powered product launches, including Spectacles (Specs), and operational efficiencies marked significant milestones.

Financial highlights

• Q2 2026 revenue: $1.6 billion (+19% YoY); advertising revenue: $1.28 billion (+9% YoY); other revenue: $316 million (+85% YoY).

• Gross margin expanded to 58%, up seven percentage points year-over-year; adjusted gross margin reached 59%.

• Net loss for Q2: $164 million, improved by $99 million year-over-year; diluted net loss per share: $(0.10), improved from $(0.16).

• Adjusted EBITDA: $250 million, up from $41 million year-over-year; margin rose to 16%.

• Operating cash flow was $176 million; free cash flow reached $121 million in Q2 and $706 million over the past 12 months.

Outlook and guidance

• Q3 2026 revenue guidance: $1.70–$1.74 billion; Q3 adjusted EBITDA expected between $300 million and $350 million.

• Full-year infrastructure costs expected at $1.65–$1.70 billion, with adjusted operating expenses at $2.75 billion and stock-based compensation at $1.05 billion.

• Sustained positive net income anticipated beginning in 2027.

• Management highlights macroeconomic, geopolitical, and regulatory uncertainties that may impact future results.

• Multi-year dilution management program to launch in 2027, funded by free cash flow.