Snap’s fourth quarter was marked by strong operational execution, with the company surpassing Wall Street’s revenue and profit expectations. Management attributed these results to rapid growth in subscription products, margin improvement through a shift in advertising mix, and disciplined cost controls. CEO Evan Spiegel highlighted progress in user engagement and monetization, particularly citing the success of Snapchat+ and Memory Storage Plans. The quarter’s results also reflected a deliberate rebalancing toward more profitable geographies and products, as management reduced community growth marketing to better align investments with monetization potential.
Is now the time to buy SNAP? Find out in our full research report (it’s free for active Edge members).
Snap (SNAP) Q4 CY2025 Highlights:
- Revenue: $1.72 billion vs analyst estimates of $1.70 billion (10.2% year-on-year growth, 0.9% beat)
- Adjusted EPS: $0.19 vs analyst estimates of $0.15 (22.8% beat)
- Adjusted EBITDA: $357.7 million vs analyst estimates of $299.2 million (20.8% margin, 19.5% beat)
- Operating Margin: 2.9%, up from -1.7% in the same quarter last year
- Daily Active Users: 474 million, up 21 million year on year
- Market Capitalization: $8.83 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Snap’s Q4 Earnings Call
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Eric Sheridan (Goldman Sachs) asked about the Specs launch’s strategic significance and developer ecosystem. CEO Evan Spiegel emphasized Specs’ potential to reach new audiences and the importance of launching with a strong suite of AR experiences, aiming for “lightweight, affordable and powerful glasses.”
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Ross Sandler (Barclays) questioned drivers behind the Q1 outlook excluding revenue from the perplexity integration. Spiegel explained that growth is expected from scaling SMB advertiser operations and highlighted stable macro conditions but noted ongoing challenges with large North American advertisers.
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Richard Greenfield (LightShed Partners) inquired about subscription acceleration and North American user trends. Spiegel attributed subscription growth to Memory Storage Plans and acknowledged deliberate trade-offs in user growth marketing to prioritize profitability in key regions.
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Daniel Salmon (New Street Research) sought clarification on regulatory risks and age verification impacts. Spiegel responded that while regulatory actions may affect engagement metrics, revenue from under-18 users is not material, and maintaining trust is a long-term priority.
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Benjamin Black (Deutsche Bank) asked about moderating infrastructure spend versus industry peers. Spiegel clarified that AI and machine learning investments would remain robust, but infrastructure cost efficiency is being prioritized to align spend with monetization potential across markets.
Catalysts in Upcoming Quarters
In coming quarters, our analysts will track (1) adoption and monetization of Specs following its launch, (2) continued growth and retention in subscription services, and (3) the pace of gross margin expansion from higher-margin ad products and infrastructure efficiency. We will also monitor regulatory developments and the company’s ability to sustain engagement in core monetizable markets.
Snap currently trades at $5.24, down from $5.91 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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