Snap Shares Fall Over 10% as Q3 Revenue and Users Miss Forecasts

Snap shares fell more than 10% in after-hours trading on Wednesday after its third-quarter revenue and daily active users missed analysts’ forecasts. The Snapchat owner reported $1.72 billion in sales, compared with the $1.73 billion expected by analysts polled by LSEG, while daily active users reached 495 million against the 499 million estimate tracked by StreetAccount, according to CNBC’s report on the results.

The miss was narrow, and it should not obscure the fact that Snap’s sales rose 14% from a year earlier. The company also reported $56 million in net income, reversing a $104 million loss in the corresponding quarter of 2025. Investors nevertheless focused on the gap between actual revenue and audience growth and what the market had expected.

Snap has spent the past year working to improve the advertising business and develop subscription and other direct sources of revenue. The earnings show that these efforts can coexist with an immediate market disappointment. Adjusted earnings before interest, tax, depreciation and amortisation were $383 million, above the $337 million analyst estimate cited by CNBC. That is a non-GAAP measure, however, and should not be confused with the $56 million net income figure.

For the fourth quarter, Snap expects revenue between $1.95 billion and $1.99 billion. The midpoint is above the $1.95 billion estimate cited by CNBC. It expects adjusted earnings on the same non-GAAP basis of $490 million to $525 million, against an analyst estimate of $498 million. These forecasts suggest management expects further growth, but they are projections rather than realised results.

A key question for advertisers is whether Snap can continue increasing the value of its audience even if daily usage grows more slowly than expected. The company said it had 977 million monthly active users in the quarter. It plans to make monthly active users its primary audience measure from the first quarter of 2027. Snap argues that optimising for daily use alone could undermine the longer-term value of its product and safety decisions. Investors will still want to see how the new headline metric relates to engagement and advertising revenue.

A monthly user figure captures people who may not open Snapchat every day, giving a broader view of reach. Daily active users, by contrast, help show how habitually people return. Neither measure by itself proves that advertisers are obtaining better results. Snap will need to make the connection between audience size, engagement and monetisation clear as it changes the metric it emphasises.

The earnings also come as Snap invests beyond the phone. TechBooky recently examined its AI upgrade for Specs glasses, a much longer-term bet than its current advertising and subscription business. Tonight’s share move suggests investors remain most sensitive to the near-term numbers, even while Snap asks them to consider a broader future for its camera and augmented-reality technology.

Snap’s investor relations page carries the earnings event and related materials. The market reaction may change as trading continues, so the more durable story is the combination of a small revenue miss, stronger profit and a forthcoming change in how Snap reports its audience.