Snap Q2 2025 slides: 9% revenue growth amid mixed regional performance

Introduction & Market Context

Snap Inc . (NYSE:SNAP) released its second quarter 2025 earnings presentation on August 5, 2025, revealing continued revenue and user growth despite ongoing profitability challenges. The social media company reported a 9% year-over-year revenue increase to $1.345 billion, while its global user base expanded to 932 million monthly active users.

In after-hours trading, Snap’s stock edged up 0.63% to $9.53, following a 0.84% decline during regular trading hours. The modest market reaction suggests investors are weighing the company’s user growth against its persistent profitability challenges.

Quarterly Performance Highlights

Snap’s Q2 2025 financial results showed mixed performance across key metrics. While revenue grew 9% year-over-year to $1.345 billion, the company reported a net loss of $263 million, slightly wider than the $249 million loss in the same period last year.

As shown in the following financial summary chart, Snap maintained a steady gross margin while improving its cash flow position compared to the prior year:

Adjusted EBITDA came in at $41 million (3% margin), down from $55 million (4% margin) in Q2 2024. This represents a decline from the $108 million reported in Q1 2025, suggesting some headwinds in maintaining profitability momentum.

The company’s free cash flow showed significant improvement, reaching $24 million compared to negative $73 million in the prior year. Operating cash flow was $88 million, up from negative $21 million in Q2 2024.

User Growth and Engagement

Snap continued to expand its user base, reaching 932 million monthly active users in Q2 2025, a 7% year-over-year increase. Daily active users grew 9% to 469 million, with the strongest growth coming from the Rest of World region at 15% year-over-year.

The following chart illustrates Snap’s consistent monthly active user growth over the past six quarters:

The company’s daily active user base showed varied growth rates across regions, with North America growing 2% to 98 million, Europe up 3% to 100 million, and Rest of World increasing 15% to 271 million:

Engagement metrics were also positive, with Spotlight reaching over 550 million monthly active users and time spent growing 23% year-over-year. The company reported that over 350 million Snapchatters engaged with augmented reality (AR) features daily, and Lens Games reached more than 175 million monthly active users, up over 40% year-over-year.

Regional Performance Analysis

Snap’s revenue growth varied significantly by region, with Europe leading at 15% year-over-year growth to $265 million. North America, still the largest market, grew 7% to $821 million, while Rest of World increased 8% to $259 million.

The following chart shows revenue trends across different geographic regions:

Average Revenue Per User (ARPU) metrics revealed important regional differences in monetization efficiency. While global ARPU remained flat at $2.87, North America saw a 9% increase to $8.33 and Europe grew 13% to $2.65. However, Rest of World ARPU declined 6% to $0.96, highlighting challenges in monetizing the fastest-growing user segment.

Profitability and Cash Flow

Despite revenue growth, Snap continues to face profitability challenges. The company’s net loss margin remained at 20%, unchanged from the prior year. The following chart shows the trend in net income (loss) and Adjusted EBITDA:

Snap’s adjusted gross margin was 52%, down slightly from 53% in the prior year. The company’s infrastructure cost per daily active user was $0.84 in Q2 2025, reflecting ongoing investments in platform capacity.

The company maintained a strong liquidity position with $2.9 billion in cash, cash equivalents, and marketable securities as of June 30, 2025. Snap’s debt maturity profile shows major obligations in 2028, 2030, and 2033.

During the quarter, Snap repurchased 30 million shares at an average price of $8.12, bringing cumulative share repurchases to 208.8 million shares for $2.0 billion at an average price of $9.59.

Strategic Initiatives and Future Outlook

Snap highlighted several strategic initiatives aimed at driving future growth. The company announced plans to launch its first consumer-ready Specs AR glasses in 2026, representing a significant step in its augmented reality strategy.

Advertising platform improvements contributed to a 39% year-over-year increase in purchase volume for commerce advertisers. The company introduced new ad formats including Sponsored Snaps from creators and First Snap, while also launching Snapchat Smart Campaign Solutions.

On the AR front, Snap reported that its community uses AR Lenses 8 billion times per day, with over 400,000 developers having built more than 4 million Lenses. The company introduced a new Lens Studio iOS app and web tool to make AR development more accessible.

The company also launched a new Snapchat app for Apple (NASDAQ:AAPL) Watch and saw Snap Map grow to over 400 million monthly active users. Video chat time spent increased by 30% year-over-year, indicating growing engagement with communication features.

While Snap did not provide specific forward guidance in the presentation, the company’s investments in AR, AI, and creator tools signal its strategic priorities for future growth. The planned launch of consumer AR glasses in 2026 represents a significant product initiative that could open new revenue streams beyond advertising.

Full presentation:

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