Snapchat’s second quarter saw a stronger-than-expected performance, which management attributed to momentum in both its advertising and subscription businesses. CEO Evan Spiegel emphasized that recent investments in ad platform automation and AI-powered tools have started to pay off, citing a 56% year-over-year increase in conversion events and growing adoption of new ad formats like sponsored Snaps. The company also benefited from major sporting events and robust growth among its small and medium-sized business advertisers. Management highlighted that a restructuring of the cost base earlier in the year enabled Snap to scale efficiently and deliver operating leverage, supporting improved margins and cash generation.
Is now the time to buy SNAP? Find out in our full research report (it’s free for active Edge members).
Snap (SNAP) Q2 CY2026 Highlights:
- Revenue: $1.60 billion vs analyst estimates of $1.54 billion (18.9% year-on-year growth, 3.8% beat)
- Adjusted EPS: $0.13 vs analyst estimates of $0.06 (significant beat)
- Adjusted EBITDA: $249.6 million vs analyst estimates of $185.3 million (15.6% margin, 34.7% beat)
- Operating Margin: -10.7%, up from -19.3% in the same quarter last year
- Market Capitalization: $9.01 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Snap’s Q2 Earnings Call
- Douglas Anmuth (JPMorgan) asked about the durability of recent growth. CEO Evan Spiegel pointed to broad improvements in ad platform performance and conversion rates, emphasizing ongoing gains across both large and small advertisers.
- Ross Sandler (Barclays) questioned the investment pacing for Specs and whether a spin-out was considered. Spiegel explained the company’s focus on product quality, ecosystem development, and disciplined investment tied to milestones, and did not rule out alternative structures in the future.
- Daniel Salmon (New Street Research) asked about North America user trends and the impact of regulatory changes. Spiegel highlighted stabilization in daily active users and growing relevance among users over 35, while flagging ongoing monitoring of regulatory risks.
- Richard Greenfield (LightShed Partners) requested insight into Specs preorder volumes and the World Cup’s effect on revenues. Spiegel described strong interest in Specs, while CFO Doug Hott clarified that World Cup-related ad spending benefited Q2 but would normalize in Q3.
- Michael Nathanson (MoffettNathanson) pressed on the financial rationale for Specs investment given larger competitors. Spiegel argued Snap’s integrated technology stack and first-mover advantage position it well, despite the resource gap with larger firms.
Catalysts in Upcoming Quarters
Going forward, the StockStory team will be tracking (1) the commercial rollout and initial user feedback on Specs, (2) sustained growth in subscription revenue and progress toward higher subscriber penetration, and (3) evidence that AI-driven ad products continue to improve advertiser outcomes and platform engagement. Regulatory developments and Snap’s ability to manage infrastructure costs without sacrificing growth will also be important signposts.
Snap currently trades at $5.31, up from $5.04 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.