Snap Inc. Reports Strong Q4 2025 Earnings with Strategic Growth Focus
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy SNAP?
Source: seekingalpha
- User Growth and Profit Balance: Snap reached 946 million monthly active users in Q4, nearing its goal of 1 billion, with CEO Evan Spiegel emphasizing the need to balance user growth with revenue growth to achieve higher profitability.
- Advertising and Subscription Revenue Growth: Total revenue for Q4 was $1.72 billion, with advertising revenue at $1.48 billion and a 71% year-over-year increase in subscribers to 24 million, showcasing the company's success in diversifying its revenue streams.
- Margin Improvement: Snap achieved a 59% adjusted gross margin in Q4, up from 55% in Q3, with management projecting to exceed the 60% gross margin target in 2026, indicating ongoing improvements in profitability.
- Future Outlook and Cost Control: Management projected Q1 2026 revenue between $1.5 billion and $1.53 billion while planning to keep infrastructure costs between $1.6 billion and $1.65 billion, reflecting confidence in future profitability.
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Analyst Views on SNAP
Wall Street analysts forecast SNAP stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SNAP is 9.57 USD with a low forecast of 7.00 USD and a high forecast of 13.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
28 Analyst Rating
2 Buy
24 Hold
2 Sell
Hold
Current: 6.100
Low
7.00
Averages
9.57
High
13.00
Current: 6.100
Low
7.00
Averages
9.57
High
13.00
About SNAP
Snap Inc. is a technology company. Its flagship product, Snapchat, is a visual messaging application that enhances relationships with friends, family, and the world. Snapchat is the Company's core mobile device application and contains five tabs, complemented by additional tools that function outside the application. Snapchatters can interact with any or all the five tabs. Additionally, it offers Snapchat+, its subscription product that provides subscribers access to exclusive, experimental, and pre-release features. Snapchat+ offers a range of features, from allowing Snapchatters to customize the look and feel of their application, to giving special insights into their friendships. The Company also offers Snapchat for Web, a browser-based product that brings Snapchats calling and messaging capabilities to the Web. Its advertising products include AR Ads and Snap Ads. Snap Ads include Single Image or Video Ads, Story Ads, Collection Ads, Dynamic Ads, Commercials, and Sponsored Snaps.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Snap Inc. Q4 Earnings Preview: Expected Loss and Revenue Growth
- Earnings Release Announcement: Snap Inc. is set to release its Q4 earnings after the market closes on February 4, with analysts predicting a loss of 3 cents per share, a significant decline from a profit of 1 cent per share a year ago, indicating mounting profitability pressures.
- Revenue Growth Expectations: Despite the anticipated loss, Snap's quarterly revenue is expected to reach $1.7 billion, up from $1.56 billion a year earlier, suggesting that the company still has some growth potential in terms of revenue.
- Subsidiary Formation: Snap recently announced the establishment of Specs Inc. as a distinct subsidiary, aimed at preparing for the public launch of AI-powered smart glasses, a strategic move that could open new revenue streams for the company.
- Stock Price Fluctuation: Snap's shares fell 8.4% to close at $6.10 on Tuesday, reflecting market concerns regarding the upcoming earnings report and future outlook, which may impact investor confidence.
See More
Illinois Man Admits Guilt in Snapchat Phishing Scheme
- Phishing Case: Kyle Svara, 26, admitted in federal court to running a phishing scheme impersonating Snapchat support, targeting 571 women and successfully accessing 59 accounts to download unauthorized private images, highlighting significant security vulnerabilities on social media platforms.
- Legal Consequences: Under a plea agreement, prosecutors will recommend a three-year prison sentence for Svara, with sentencing scheduled for May 18, underscoring the severe impact of cybercrime on victims and the legal system's response.
- Coach's Involvement: Svara was hired by former Northeastern University track coach Steve Waithe, who paid about $50 per account for hacking services, revealing potential connections between cybercrime and the sports community, raising public concern.
- Snap Earnings Report: On the same day as Svara's guilty plea, Snap released its fourth-quarter earnings, reporting earnings of 3 cents per share, exceeding expectations, with revenue rising over 10% year-over-year, although daily active users slightly declined, indicating challenges in user growth.
See More
Snap Inc. Reports Strong Q4 2025 Earnings with Strategic Growth Focus
- User Growth and Profit Balance: Snap reached 946 million monthly active users in Q4, nearing its goal of 1 billion, with CEO Evan Spiegel emphasizing the need to balance user growth with revenue growth to achieve higher profitability.
- Advertising and Subscription Revenue Growth: Total revenue for Q4 was $1.72 billion, with advertising revenue at $1.48 billion and a 71% year-over-year increase in subscribers to 24 million, showcasing the company's success in diversifying its revenue streams.
- Margin Improvement: Snap achieved a 59% adjusted gross margin in Q4, up from 55% in Q3, with management projecting to exceed the 60% gross margin target in 2026, indicating ongoing improvements in profitability.
- Future Outlook and Cost Control: Management projected Q1 2026 revenue between $1.5 billion and $1.53 billion while planning to keep infrastructure costs between $1.6 billion and $1.65 billion, reflecting confidence in future profitability.
See More
Snap Surprises with Earnings Beat; Boston Scientific Faces Price Target Cut
- Snap's Earnings Surprise: Snap reported a surprise quarterly earnings beat driven by increased advertising spending during the holiday season, with its stock falling over 3% in regular trading but rebounding more than 2% in after-hours, indicating investor confidence in its future prospects.
- Boston Scientific Price Target Cut: BTIG lowered Boston Scientific's price target from $132 to $110, which still implies over 45% upside potential, reflecting market confidence in its product lineup despite recent sales misses, particularly in its electrophysiology segment.
- PayPal's Challenges: PayPal's shares fell over 1.6% in regular trading, hitting a new 52-week low of $39.96, as the market reacted negatively to its latest quarterly results and executive changes, although it managed a slight recovery of 0.3% in after-hours trading.
- Market Sentiment Analysis: Despite the challenges faced by Snap and Boston Scientific, investor sentiment on social media remains 'extremely bullish', indicating confidence in long-term growth potential, particularly with the rise in advertising spending during the holiday season.
See More
U.S. Stocks Close Mixed, Notable Volatility in Tech Sector
- Dow Jones Gains: The Dow Jones Industrial Average rose by 0.53% to close at 49,501.30, indicating ongoing investor interest in blue-chip stocks despite mixed overall market performance.
- Alphabet Stock Decline: Alphabet's Class C shares fell by 2.16% to $333.34, even though it reached an intraday high of $344.25, reflecting cautious sentiment among investors towards tech stocks, which may impact future investment decisions.
- Qualcomm's Modest Rise: Qualcomm's stock increased by 1.16% to $148.89, but sharply dropped by 9.68% to $134.48 in after-hours trading, showcasing a divergence in market sentiment regarding its future outlook.
- Snap's Price Fluctuation: Snap's shares declined by 3.11% to $5.91, although they rebounded by 2.88% to $6.08 in after-hours trading, indicating a mix of concerns over profitability and hopes for a short-term recovery.
See More
Snap Exceeds Q4 Expectations and Approves $500M Buyback
- Earnings Beat: Snap's Q4 earnings report exceeded market expectations, showcasing robust user growth and advertising revenue, which is likely to drive a stock rebound and bolster investor confidence.
- Buyback Plan: The company has approved a $500 million stock buyback program aimed at enhancing earnings per share and rewarding shareholders, reflecting management's confidence in the company's future performance.
- Partnership Strategy: Snap's collaboration with Perplexity signifies a strategic shift, which, while deviating from its core business, may provide new growth avenues in the future.
- Market Reaction: Despite the strong earnings report, Snap's stock declined ahead of the results, indicating market concerns over future uncertainties that could affect short-term investor sentiment.
See More
Snap Inc. Q4 Earnings Preview: Expected Loss and Revenue Growth
- Earnings Release Announcement: Snap Inc. is set to release its Q4 earnings after the market closes on February 4, with analysts predicting a loss of 3 cents per share, a significant decline from a profit of 1 cent per share a year ago, indicating mounting profitability pressures.
- Revenue Growth Expectations: Despite the anticipated loss, Snap's quarterly revenue is expected to reach $1.7 billion, up from $1.56 billion a year earlier, suggesting that the company still has some growth potential in terms of revenue.
- Subsidiary Formation: Snap recently announced the establishment of Specs Inc. as a distinct subsidiary, aimed at preparing for the public launch of AI-powered smart glasses, a strategic move that could open new revenue streams for the company.
- Stock Price Fluctuation: Snap's shares fell 8.4% to close at $6.10 on Tuesday, reflecting market concerns regarding the upcoming earnings report and future outlook, which may impact investor confidence.
See More
Illinois Man Admits Guilt in Snapchat Phishing Scheme
- Phishing Case: Kyle Svara, 26, admitted in federal court to running a phishing scheme impersonating Snapchat support, targeting 571 women and successfully accessing 59 accounts to download unauthorized private images, highlighting significant security vulnerabilities on social media platforms.
- Legal Consequences: Under a plea agreement, prosecutors will recommend a three-year prison sentence for Svara, with sentencing scheduled for May 18, underscoring the severe impact of cybercrime on victims and the legal system's response.
- Coach's Involvement: Svara was hired by former Northeastern University track coach Steve Waithe, who paid about $50 per account for hacking services, revealing potential connections between cybercrime and the sports community, raising public concern.
- Snap Earnings Report: On the same day as Svara's guilty plea, Snap released its fourth-quarter earnings, reporting earnings of 3 cents per share, exceeding expectations, with revenue rising over 10% year-over-year, although daily active users slightly declined, indicating challenges in user growth.
See More
Snap Inc. Reports Strong Q4 2025 Earnings with Strategic Growth Focus
- User Growth and Profit Balance: Snap reached 946 million monthly active users in Q4, nearing its goal of 1 billion, with CEO Evan Spiegel emphasizing the need to balance user growth with revenue growth to achieve higher profitability.
- Advertising and Subscription Revenue Growth: Total revenue for Q4 was $1.72 billion, with advertising revenue at $1.48 billion and a 71% year-over-year increase in subscribers to 24 million, showcasing the company's success in diversifying its revenue streams.
- Margin Improvement: Snap achieved a 59% adjusted gross margin in Q4, up from 55% in Q3, with management projecting to exceed the 60% gross margin target in 2026, indicating ongoing improvements in profitability.
- Future Outlook and Cost Control: Management projected Q1 2026 revenue between $1.5 billion and $1.53 billion while planning to keep infrastructure costs between $1.6 billion and $1.65 billion, reflecting confidence in future profitability.
See More
Snap Surprises with Earnings Beat; Boston Scientific Faces Price Target Cut
- Snap's Earnings Surprise: Snap reported a surprise quarterly earnings beat driven by increased advertising spending during the holiday season, with its stock falling over 3% in regular trading but rebounding more than 2% in after-hours, indicating investor confidence in its future prospects.
- Boston Scientific Price Target Cut: BTIG lowered Boston Scientific's price target from $132 to $110, which still implies over 45% upside potential, reflecting market confidence in its product lineup despite recent sales misses, particularly in its electrophysiology segment.
- PayPal's Challenges: PayPal's shares fell over 1.6% in regular trading, hitting a new 52-week low of $39.96, as the market reacted negatively to its latest quarterly results and executive changes, although it managed a slight recovery of 0.3% in after-hours trading.
- Market Sentiment Analysis: Despite the challenges faced by Snap and Boston Scientific, investor sentiment on social media remains 'extremely bullish', indicating confidence in long-term growth potential, particularly with the rise in advertising spending during the holiday season.
See More
U.S. Stocks Close Mixed, Notable Volatility in Tech Sector
- Dow Jones Gains: The Dow Jones Industrial Average rose by 0.53% to close at 49,501.30, indicating ongoing investor interest in blue-chip stocks despite mixed overall market performance.
- Alphabet Stock Decline: Alphabet's Class C shares fell by 2.16% to $333.34, even though it reached an intraday high of $344.25, reflecting cautious sentiment among investors towards tech stocks, which may impact future investment decisions.
- Qualcomm's Modest Rise: Qualcomm's stock increased by 1.16% to $148.89, but sharply dropped by 9.68% to $134.48 in after-hours trading, showcasing a divergence in market sentiment regarding its future outlook.
- Snap's Price Fluctuation: Snap's shares declined by 3.11% to $5.91, although they rebounded by 2.88% to $6.08 in after-hours trading, indicating a mix of concerns over profitability and hopes for a short-term recovery.
See More
Snap Exceeds Q4 Expectations and Approves $500M Buyback
- Earnings Beat: Snap's Q4 earnings report exceeded market expectations, showcasing robust user growth and advertising revenue, which is likely to drive a stock rebound and bolster investor confidence.
- Buyback Plan: The company has approved a $500 million stock buyback program aimed at enhancing earnings per share and rewarding shareholders, reflecting management's confidence in the company's future performance.
- Partnership Strategy: Snap's collaboration with Perplexity signifies a strategic shift, which, while deviating from its core business, may provide new growth avenues in the future.
- Market Reaction: Despite the strong earnings report, Snap's stock declined ahead of the results, indicating market concerns over future uncertainties that could affect short-term investor sentiment.
See More
