Q2 2026 Snap Inc Earnings Call Transcript
Key Points
- Revenue grew 19% year-over-year to $1.6 billion, with advertising revenue up 9% and other revenue surging 85%.
- Gross margin expanded to 58%, up 7 percentage points year-over-year, and adjusted EBITDA increased to $250 million.
- Free cash flow reached $121 million in Q2, marking the eighth consecutive quarter of positive free cash flow.
- AI-driven improvements boosted ad performance, with cost per purchase down 18% and app purchase volume up 128%.
- Spotlight engagement surged, with U.S. posters up over 115% and daily active viewers up over 20%.
- Other revenue streams like Snapchat+ and Lens+ are growing rapidly, with less than 3% of MAUs as subscribers, indicating significant headroom.
- The company is advancing its Specs product, with a launch event planned for September 16, positioning it as a first mover in the AR glasses market.
- Net loss was $164 million, though improved from the prior year.
- Q3 revenue guidance of $1.70-$1.74 billion implies a slowdown from Q2's 19% growth, partly due to World Cup spending normalization.
- Full-year infrastructure cost guidance was raised to $1.65-$1.70 billion, reflecting increased AI/ML investment.
- North America DAU remained flat at 92 million, with growth only in the 35+ age group.
- The company faces legal and regulatory risks, including youth-related scrutiny and upcoming trials that could impact operations.
- Specs investment is a long-term bet with mass-market adoption not expected until the end of the decade, requiring sustained capital.
- The company's share count has grown ~2% over five years, and dilution management remains a challenge.
Good afternoon, everyone, and welcome to Snap Inc's second quarter 2026 earnings conference call. (Operator Instructions)
I would now like to turn the call over to David Ometer, Head of Investor Relations.
Thank you, and good afternoon, everyone. Welcome to Snap's second quarter 2026 earnings conference Call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder; and Doug Hott, Chief Financial Officer. Please refer to our Investor Relations website at investor.snap.com to find today's press release, earnings slides and investor letter. This conference call includes forward-looking statements, which are based on our assumptions as of today. Actual results may differ materially from those expressed in these forward-looking statements, and we make no obligation to update our disclosures.
For more information about factors that may cause actual results to differ materially from these forward-looking statements, please refer to the press release we issued today as well as risks
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