10-Q · August 3, 2026
Snap delivered a strong Q2 top-line and monetization result: revenue rose 19% to $1.599 billion, DAUs rose 5% to 493 million, and ARPU increased to $3.25. Gross margin improved to 58.2% and year-over-year free cash flow…
Earnings analysis · 10-Q
SNAP earnings analysis
Filed November 5, 2026 · Our reading of the company's report
The latest report
Snap reported Q3 revenue of $1.722 billion, up approximately 7.6% sequentially and 14.1% year over year, with diluted EPS improving to $0.03 from losses of $0.10 in Q2 2026 and $0.06 in Q3 2025. Free cash flow increased…
Read full summary
Snap reported Q3 revenue of $1.722 billion, up approximately 7.6% sequentially and 14.1% year over year, with diluted EPS improving to $0.03 from losses of $0.10 in Q2 2026 and $0.06 in Q3 2025. Free cash flow increased to $164.5 million from $121 million sequentially and $93 million year over year, while disclosed cash, cash equivalents, and marketable securities totaled $2.8 billion. Offsetting positives are heavy advertising dependence, the planned Q1 2027 transition to global MAU reporting, substantial debt including maturities beginning in May 2027, and increasing regulatory and AR hardware execution risks.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.03
What stood out
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Revenue grew sequentially and year over year
Q3 revenue was $1.722 billion, up approximately 7.6% from $1.6 billion in Q2 2026 and 14.1% from $1.51 billion in Q3 2025. Revenue was approximately $4.5 million below consensus.
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Returned to positive diluted EPS
Diluted EPS was $0.03, compared with a $0.10 loss in Q2 2026 and a $0.06 loss in Q3 2025, marking a return to quarterly profitability.
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Free cash flow strengthened materially
Free cash flow was $164.5 million, up from $121 million in Q2 2026 and $93 million in Q3 2025, an increase of approximately 36% sequentially and 77% year over year.
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User scale remains substantial
Snap averaged 495 million Daily Active Users and 977 million Monthly Active Users in the quarter ended September 30, 2026, providing a large base for future monetization.
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Liquidity remains substantial
Cash and cash equivalents were $1.0 billion and marketable securities were $1.8 billion at September 30, 2026, providing $2.8 billion of immediately disclosed liquid investments.
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Expanded AR and AI product initiatives
Snap launched SPECS AR glasses in September 2026 and introduced SPECS Intelligence, an AI-powered service intended to provide personalized assistance across SPECS AR glasses and other devices.
What to watch
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Upcoming user-metric transition
Beginning in Q1 2027, Snap plans to transition its primary audience metric from DAUs to global MAU, while also changing MAU and ARPU definitions. The company had 495 million DAUs and 977 million MAUs in Q3 2026, and the transition may make period-over-period comparisons more difficult.
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Heavy dependence on advertising
Advertising represented approximately 87% of total revenue in 2025, leaving Snap materially exposed to changes in advertiser demand, privacy regulation, mobile operating-system restrictions, and measurement effectiveness.
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Near-term debt maturities
Snap disclosed that the outstanding Notes begin maturing in May 2027, while aggregate debt principal was $3.4 billion at September 30, 2026. Refinancing or repayment could pressure liquidity if operating cash flow or capital-market access weakens.
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AR hardware execution risk
Snap launched SPECS AR glasses in September 2026 and expects continued significant investment in augmented reality. The filing cites risks from inventory obsolescence, warranty claims, manufacturing constraints, regulatory requirements, and uncertain product adoption.
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Increasing regulatory exposure
The European Commission opened formal DSA proceedings in March 2026, and the United Kingdom designated Snapchat a Category 1 service under the Online Safety Act in July 2026. UK non-compliance could result in fines of up to £18 million or 10% of the previous year's global revenues.
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Concentrated voting control
Snap's two co-founders controlled over 99% of voting power as of September 30, 2026, while Class A common stockholders have no voting rights except where required by Delaware law, limiting public-stockholder influence.
Management's outlook
The 10-Q does not provide quantitative revenue or EPS guidance. Management discusses ongoing investments in SPECS AR glasses, AI, and long-term monetization, but no numeric outlook is included.
Earlier filings 4
10-Q · May 6, 2026
Snap Inc. reported a strong Q1 2026 performance with revenues of $1.529 billion, a 12% year-over-year increase, and an improvement in diluted EPS from -$0.08 to -$0.05, exceeding analyst expectations. The firm's…
10-Q · April 30, 2025
Snap reported Q1 2025 revenue of $1,363,217,000 (up from $1,194,773,000 in Q1 2024) with GAAP diluted EPS of $(0.08). Gross margin was ~53.1% and operating loss narrowed to $193,846,000. Operating cash flow was positive…
10-Q · April 26, 2024
Snap reported revenue of $1,194,773,000 in Q1 2024, up from $988,608,000 a year ago, with operating loss narrowing to $(333,232,000) and GAAP diluted EPS improving to $(0.19). Operating cash flow was positive at…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.