Snap’s Q2 result
New Delhi, India – August 7, 2025- Snap Inc., the parent company of Snapchat, reported on Tuesday that its revenue growth slowed to the weakest rate in over a year. The company pointed to a temporary glitch in its advertising system and rising competition from larger rivals like Meta as key reasons behind the disappointing results. Following the update, Snap’s shares dropped more than 16% in after-hours trading.
The glitch allowed some ads to run at lower prices than expected, reducing revenue during a critical period. Snap resolved the issue but admitted the mistake had a clear impact on quarterly earnings. At the same time, many advertisers shifted their budgets toward platforms like Facebook and Instagram, as Meta owns both platforms, especially as companies trimmed marketing costs due to ongoing economic uncertainty.
Industry experts noted that while Meta and Reddit posted strong earnings in the same quarter, Snap did not enjoy similar gains. Jasmine Enberg, a senior analyst at eMarketer, remarked that other companies felt the ad boost was only a “light breeze” for Snap. She emphasized that in today’s market, companies like Snap have little room for error.
For the second quarter, Snap reported revenue of $1.34 billion—an 8.7% increase from the same period last year. While the figure met market expectations, it fell short of the double-digit growth the company had seen over the previous five quarters. Snap’s net loss grew to $263 million, up from $249 million a year earlier.
Seasonal and global factors added to the pressure. The timing of Ramadan altered advertising activity in key markets. In addition, the end of a U.S. duty-free import rule led several Chinese advertisers to scale back their spending. Snap’s ad revenue dipped by about 1% in April but recovered through May.
To drive engagement, the company expanded its Sponsored Snaps format in June. These video ads now appear in users’ inboxes across the U.S. and other global markets. According to Chief Financial Officer Derek Andersen, users interacted more with ad content after the rollout
Snap also saw strong user growth. Daily active users rose 9% year-over-year to reach 469 million, slightly above analyst forecasts. Its subscription service, Snapchat+, played a key role in diversifying revenue beyond advertising. The paid service grew 42%, reaching nearly 16 million subscribers by the end of June.
Looking ahead, Snap expects third-quarter revenue to fall between $1.48 billion and $1.51 billion. The projection matches average analyst estimates and reflects cautious optimism.
These results underline the tough reality for smaller digital platforms competing for ad dollars. While Snapchat remains a popular app, Snap must continue to innovate and avoid technical issues to hold advertiser trust.
As market conditions shift, all eyes will be on how Snap balances user growth, new products, and financial performance in the quarters ahead.
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