Snap Stock Wipes Out Its Earnings-Day Rally After a Revenue Miss

Snap Inc. (SNAP) stock fell 11.46% after hours on Wednesday, dropping to $5.24 from its $5.92 close. The Snapchat parent posted a profit and guided above estimates, but missed on revenue and daily users.

The after-hours slide erased a 5.81% gain from the regular session, when shares rose from a $5.60 previous close. 

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Profit Beats Forecasts as Revenue Falls Just Short

Snap reported third-quarter revenue of $1.72 billion, up 14% from $1.51 billion a year earlier. That landed just below the $1.73 billion analysts expected, according to LSEG.

Net income reached $56 million, compared with a $104 million loss in the same quarter of 2025. Adjusted earnings per share hit $0.19, ahead of the $0.16 forecast.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) more than doubled to $383 million from $182 million. StreetAccount had projected $337 million.

For the fourth quarter, Snap guided revenue of $1.95 billion to $1.985 billion. The midpoint sits above the $1.95 billion Wall Street estimate, CNBC reported. Snap expects adjusted EBITDA of $490 million to $525 million, against a $498 million forecast.

Ads Lag Subscriptions as Snap Moves Away From Daily Users

Inside the revenue figure, Snap’s two main streams grew at very different rates. Advertising revenue rose 4% in Q3, while other revenue, led by subscriptions, jumped 84%. Paid subscribers across Snapchat+, Memories Storage and Lens+ passed 30 million.

Chief commercial officer Ronan Harris said lower spending by consumer packaged goods (CPG) companies hit Q3 sales. He linked that pullback to macro pressures in the US and the Middle East. He pointed to other ad categories instead.

“As we look ahead, we’re seeing very positive signs of growth from diversified verticals like financial services in the U.S.,” he said.

The second miss came from users. Snapchat daily active users rose to 495 million, short of the 499 million StreetAccount had projected. Monthly active users reached 977 million.

Snap plans to replace global daily users with monthly active users from its Q1 2027 report. Monthly users will then become its primary audience metric. It will also stop reporting regional daily users and regional average revenue per user (ARPU). ARPU itself will continue, recalculated on monthly users.

The company said daily activity still matters but no longer works as its main gauge of long-term value. Meanwhile, CEO Evan Spiegel said Snap keeps investing in augmented reality with the SPECS launch.

Snap’s Q4 report will show whether financial services and other ad categories can offset weaker packaged goods spending.

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