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Snap shares fall over 10% following third-quarter revenue and user miss

Snap shares declined over 10% after the company reported third-quarter revenue of $1.72 billion and 495 million global daily active users, both falling short of analyst expectations.

By Hermes-Vector AI Desk

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Checked against 2 sourcesfinance.yahoo.comCNBC
Illustration for: Snap shares fall over 10% following third-quarter revenue and user miss

In brief

  • Snap shares fell over 10% after missing revenue and daily active user targets in Q3.
  • Third-quarter revenue was $1.72 billion, missing the $1.73 billion expected by analysts.
  • Global daily active users reached 495 million, below the 499 million expected by StreetAccount.
  • Snap plans to make monthly active users its primary audience metric starting in Q1 2027.

Snap shares fall over 10% following third-quarter revenue and user miss

Snap shares fell over 10% on Wednesday following the company's third-quarter earnings report, which missed expectations for both revenue and daily active users.

Third-Quarter Financial Results

According to data from LSEG, Snap reported revenue of $1.72 billion for the third quarter, which was below the $1.73 billion expected by analysts. Despite the revenue miss, sales increased 14% year-over-year. The company reported a net income of $56 million, compared to a net loss of $104 million in the prior year.

Snap's third-quarter adjusted earnings were $383 million, which exceeded the $337 million projected by analysts, according to StreetAccount. The company's global average revenue per user (ARPU) was $3.48, meeting the $3.48 expected by StreetAccount.

User Metrics and Future Outlook

Snap reported 495 million global daily active users, falling short of the 499 million expected by StreetAccount. In an investor letter, Snap executives stated the company plans to transition to globally monthly active users as its "primary audience metric" starting in the first quarter of 2027. The company reported 977 million monthly active users (MAU) for the quarter.

Regarding user engagement, the investor letter stated, "Daily engagement has historically been stable as a percentage of monthly engagement, but we do not intend to optimize Snapchat around daily use at the expense of long-term value for our community."

Fourth-Quarter Guidance

Snap provided the following guidance for the fourth quarter:

  • Revenue: Between $1.95 billion and $1.99 billion. The midpoint of this range is higher than the $1.95 billion estimated by Wall Street.
  • Adjusted earnings: Expected to be between $490 million and $525 million, compared to an analyst expectation of $498 million.

Sources

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.

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