Snapchat Is Still Losing Money 15 Years Later Despite 971 Million Monthly Average Users

Growth investors are OK with trading off profits for high revenue growth as long as losses get smaller over time. That setup implies that a company can eventually become profitable.

However, if a company remains unprofitable for 15 years, it's best to stay on the sidelines. Snapchat (NYSE: SNAP) fits that category. It's still unprofitable despite having 971 million monthly active users (MAUs). The stock is down by more than 30% year to date.

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Margins have been improving, but it's also been too long

Snapchat delivered second-quarter results that revealed 19% year-over-year revenue growth and narrowing losses. It's a good combination for any growth stock, but investors have every right to be impatient with a company that has remained unprofitable for 15 years.

Still, net losses came in at $164 million compared to $1.6 billion in revenue. That's a negative net profit margin of roughly 10%. It's still not growing as fast as Meta Platforms (NASDAQ: META), which delivered 28% year-over-year revenue growth in Q2 2026.

Snapchat anticipates $300 million to $350 million in adjusted EBITDA in the third quarter. That doesn't translate into positive net income, though it's an improvement from the $250 million in adjusted EBITDA during the second quarter. Leadership anticipates positive net income in 2027. A "multi-year dilution management program" beginning in 2027 may undo some of the benefits of positive net income.

The company has done a good job of keeping costs in control as other tech companies scramble to increase their AI spending. Snapchat may fall behind on compelling long-term opportunities because of that decision, but it's a prudent one given the company's financials.

User activity is declining in key regions

One of Snapchat's strengths and weaknesses is its 971 million monthly active users. It's a large user base Snapchat can tap into for additional revenue growth, but that also means the company has fewer opportunities to meaningfully grow its user base.

For instance, Snapchat's 971 million MAUs represent a 4% year-over-year growth rate. It's also adding users at a slower rate. Between Q1 2025 and Q2 2025, Snapchat added 19 million MAUs. Looking at Q1 and Q2 2026, Snapchat added only 15 million MAUs.

The positive year-over-year growth rate also masks declining growth rates in North America and Europe, two of Snapchat's most critical markets. Its daily active users in North America are down by 6% year over year and have been steadily declining for multiple quarters. European DAUs are down by 2% year over year and have been flat for multiple quarters.

The U.S. accounted for 59% of Snapchat's Q2 revenue, and Europe made up 22% of total revenue. Sure, DAUs across the rest of the world continue to grow, but ARPU remains much lower than in the U.S. and Europe. The ARPU for non-U.S. and non-European regions is only $1, while the ARPU is $10.26 in the U.S.

This long-term trend does not look good for Snapchat, and if it's not reversed, potential profits in 2027 may not last for long.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.