Snap Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue increased 14% year-over-year to $1,722 million for the quarter ended September 30, 2026, compared to $1,507 million in the prior year period.
• Net income was $56 million for the quarter, a significant improvement from a net loss of $104 million in the prior year.
• Adjusted EBITDA rose 110% year-over-year to $383 million, compared to $182 million in the prior year.
• Operating cash flow increased 44% year-over-year to $210 million, up from $146 million in the prior year.
• Free Cash Flow grew 76% year-over-year to $164 million, compared to $93 million in the prior year.
• Operating income turned positive at $77 million for the quarter, reversing an operating loss of $128 million in the prior year.
• Total assets were $7,566 million as of September 30, 2026, down from $7,678 million as of December 31, 2025.
• Total liabilities were $5,336 million as of September 30, 2026, down from $5,396 million as of December 31, 2025.
• Stockholders' equity was $2,230 million as of September 30, 2026, down from $2,281 million as of December 31, 2025.
• Cash, cash equivalents, and restricted cash totaled $1,021 million as of September 30, 2026.
• Short-term debt, net was $106 million, up from $47 million as of December 31, 2025.
• Long-term debt, net was $3,380 million, down from $3,490 million as of December 31, 2025.

Guidance and Future Outlook:

• Snap Inc. stated it will discuss Q4 2026 outlook during its Q3 2026 Earnings Call and in its investor letter available at investor.snap.com.
• Management indicated that AI is becoming a significant advantage for its teams and advertising platform.
• The company continues to invest in its long-term vision for augmented reality with the launch of SPECS.

Business Segments and Product Lines:

• Revenue by region for Q3 2026: North America ($1,014 million, +13% YoY), Europe ($363 million, +22% YoY), and Rest of World ($345 million, +11% YoY).
• North America ARPU was $11.07, up 20% year-over-year.
• Europe ARPU was $3.69, up 23% year-over-year.
• Rest of World ARPU was $1.13, up 2% year-over-year.
• The company operates Snapchat, Specs Inc. (a wholly-owned subsidiary), Bitmoji, Saturn, and other digital services.
• The company plans to transition to global MAU as its primary audience metric starting in Q1 2027, replacing global DAU.
• Beginning Q1 2027, MAU will be calculated using activity during the last 30 days of the quarter.
• Beginning Q1 2027, ARPU will be defined as quarterly revenue divided by global MAU reported for the quarter.

Market and Competitive Landscape:

• Daily Active Users (DAU) averaged 495 million in Q3 2026, up 4% year-over-year.
• Monthly Active Users (MAU) averaged 977 million in Q3 2026, up 4% year-over-year.
• Global ARPU was $3.48 in Q3 2026, up 10% year-over-year.
• The company noted that daily engagement has historically been stable as a percentage of monthly engagement.

Risks and Challenges:

• Forward-looking statements involve risks including macroeconomic uncertainty, geo-political events, and conflicts.
• Risks include the ability to attain and sustain profitability, generate positive cash flow, and attract/retain users, partners, and advertisers.
• Challenges include competition, new market entrants, managing growth and expenses, and compliance with new laws and regulations.
• Risks related to maintaining intellectual property, attracting qualified personnel, and accessing financing are noted.
• Potential adverse impacts from climate change, natural disasters, health epidemics, and war are identified.
• User metric calculations face inherent challenges, including potential inaccuracies in demographic data and technical issues affecting data recording.

Management Commentary and Tone:

• Evan Spiegel, co-founder and CEO, stated, "In Q3, we generated positive net income as revenue grew 14% year-over-year to $1.72 billion, reflecting the progress we are making to build a more profitable business."
• Management highlighted that AI is becoming a significant advantage for their teams and advertising platform.
• The tone reflects confidence in building a more profitable business while investing in long-term AR vision.

Other Key Points:

• Common shares outstanding were 1,718 million as of September 30, 2026, compared to 1,711 million as of September 30, 2025.
• Total common shares outstanding plus shares underlying stock-based awards were 1,932 million as of September 30, 2026, compared to 1,861 million as of September 30, 2025.
• The company incurred $128.5 million in total restructuring charges for the nine months ended September 30, 2026, which were excluded from Adjusted EBITDA.
• Repurchases of Class A non-voting common stock were $601 million for the nine months ended September 30, 2026.
• Repurchases of convertible notes were $1,995 million for the nine months ended September 30, 2025.
• The company hosts a conference call to discuss results at 2:00 p.m. Pacific / 5:00 p.m. Eastern on November 4, 2026.
• The company uses snap.com and investor.snap.com as means of disclosing material non-public information.