TLDR
- Snap stock fell about 11% after hours Wednesday after Q3 revenue and daily users missed.
- Revenue was $1.72 billion, up 14%, and net income was $56 million.
- Daily users reached 495 million, below the roughly 499 million expected.
- Monthly users become Snap’s main audience metric starting in Q1 2027.
- Specs smart glasses cost $2,195 and are open for preorder.
Snap (SNAP) stock fell about 11% in after-hours trading Wednesday, down 65 cents. The drop followed a third-quarter report that landed light on revenue and daily users.
The stock had closed the regular session up 5.9%. It was still down 27% for the year heading into the report.
Revenue came in at $1.72 billion, a hair under the $1.73 billion analysts wanted. Sales still grew 14% from a year ago.
Profit told a better story. Snap earned $56 million in net income, a big swing from a $104 million loss last year.
Adjusted earnings hit $383 million, beating the $337 million analysts expected. Average revenue per user was $3.48, right on target.
A New Scoreboard for Users
Daily active users reached 495 million. Analysts had expected about 499 million.
Snap says monthly active users will become its primary audience metric. The switch starts in the first quarter of 2027.
The company counted 977 million monthly users in the third quarter. Its investor letter said Snap does not want to optimize around daily use “at the expense of long-term value.”
The letter added that a longer view fits better with the company’s product and safety decisions. The daily user miss and the metric change showed up in the same report.
Ad Spending and the Specs Bet
Chief commercial officer Ronan Harris blamed softer spending from consumer packaged goods brands. He pointed to “macro pressures in the U.S. and also the Middle East.”
Harris said U.S. financial services advertisers are showing “very positive signs of growth.” Snap plans to look for traction outside CPG.
CEO Evan Spiegel said advertising revenue growth “remains below our ambitions.” He added that advertisers are seeing gains from Snap’s performance upgrades.
Specs smart glasses start at $2,195 and are open for preorder. Shipping is expected to begin this fall.
They come with an AI helper called Specs Intelligence. It can connect to a user’s email and calendar.
Meta’s glasses lead the market and are lighter, though they have no display. Snap is still pushing Specs as its next product.
For the fourth quarter, Snap guided revenue to $1.95 billion to $1.99 billion, against estimates of about $1.96 billion. It also guided adjusted earnings of $490 million to $525 million, compared with $498 million expected.
