● Covered by 1 source · 1 reportMedium impact1 negative
Snap Shares Drop Over 10% After Missing Q3 Revenue and User Estimates
Key points
- Q3 revenue was $1.72 billion, missing $1.73 billion estimate.
- Global daily active users reached 495 million, below 499 million forecast.
- Net income was $56 million, an improvement from a $104 million net loss year-over-year.
- Snap plans to shift to monthly active users as its primary metric by Q1 2027.
Third-Quarter Performance Overview
Snap, the parent company of Snapchat, reported its third-quarter earnings, showing a revenue of $1.72 billion, which fell short of analysts' expectations of $1.73 billion. Global daily active users (DAU) also missed projections, coming in at 495 million against an expected 499 million. This led to a more than 10% drop in Snap's share price following the announcement.
Financial Highlights and Discrepancies
Despite missing revenue and DAU estimates, Snap's sales increased by 14% year-over-year. The company also reported a net income of $56 million, a significant improvement from the $104 million net loss in the prior year. Adjusted earnings for the quarter were $383 million, exceeding analyst projections of $337 million.
Fourth-Quarter Outlook
For the fourth quarter, Snap projects revenue to be between $1.95 billion and $1.99 billion, with the midpoint exceeding Wall Street's estimate of $1.95 billion. Adjusted earnings are expected to range from $490 million to $525 million, compared to analyst expectations of $498 million.
Shift in Audience Metrics
Snap announced a strategic shift in its primary audience metric, planning to use globally monthly active users (MAU) starting in the first quarter of 2027. The company reported 977 million MAU for the current quarter. This change is intended to better align reported metrics with product and safety decisions that support long-term audience growth and strengthen community relationships.
Factors Impacting Sales
Snap's chief commercial officer, Ronan Harris, indicated that reduced spending from consumer packaged goods (CPG) companies affected third-quarter sales. This reduction was attributed to macroeconomic pressures in the U.S. and the Middle East. Snap is now focusing on diversifying its advertising verticals, noting positive growth signs from sectors like financial services in the U.S.
✨ This summary was generated by AI from the outlets' reporting listed below. It is not independently verified and may contain errors — check the original sources. How BrevFeed works →
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Reporting from
Snap's shares fell over 10% after its third-quarter earnings report revealed a miss on revenue and global daily active users. The company reported $1.72 billion in revenue against an expected $1.73 billion, and 495 million daily active users compared to the 499 million anticipated, leading to investor concern despite a year-over-year sales increase and net income gain.