Snap reported second-quarter revenue of $1.3 billion, reflecting a 9% year-over-year increase, especially in European markets. However, adjusted EBITDA margin declined to 3.1%, primarily due to increased costs and weaker monetization. Advertising revenue rose by just 4% year-over-year, impacted by a pricing error and decreased ad spending from Chinese brands. Despite a growing user base, average revenue per user remained flat. New monetization strategies are emerging but have not significantly contributed yet. Long-term profitability appears lower than earlier estimates, with third-quarter revenue expected at $1.49 billion.
Snap's second-quarter revenue reached $1.3 billion, a 9% year-over-year increase, mainly driven by solid performance in European markets despite ongoing geopolitical pressures limiting ad budgets.
Adjusted EBITDA margin fell to 3.1%, down 130 basis points from the previous year, attributed to rising costs in infrastructure, legal expenses, and personnel.
Average revenue per user remained flat, despite growing user base, indicating ongoing challenges with monetization, particularly in light of a pricing error affecting ad revenue.
Management is focusing on AI investments and maintaining guidance for infrastructure and operating expenses, projecting third-quarter revenue of approximately $1.49 billion.
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