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1. Company Snapshot

1.a. Company Description

Snap Inc.operates as a camera company in North America, Europe, and internationally.The company offers Snapchat, a camera application with various functionalities, such as Camera, Communication, Snap Map, Stories, and Spotlight that enable people to communicate visually through short videos and images.


It also provides Spectacles, an eyewear product that connects with Snapchat and captures photos and video from a human perspective; and advertising products, including AR ads and Snap ads comprises a single image or video ads, story ads, collection ads, dynamic ads, and commercials.The company was formerly known as Snapchat, Inc.and changed its name to Snap Inc.


in September 2016.Snap Inc.was founded in 2010 and is headquartered in Santa Monica, California.

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1.b. Last Insights on SNAP

Snap's recent performance was driven by its Q3 earnings report, which beat expectations on both top and bottom lines. The company's revenue rose 10% year-over-year, fueled by gains in subscriptions and global ad impressions. A $500 million stock buyback plan also contributed to the positive momentum. Additionally, a $400 million AI partnership with Perplexity AI provided near-term revenue upside. Despite weak user growth and ARPU trends, international revenue trends and prospects continue to evolve. (Source: Snap's Q3 earnings report)

1.c. Company Highlights

2. Snap Inc. Delivers Mixed Q3 2025 Results Amidst Evolving Ad Landscape

Snap Inc.'s Q3 2025 financial performance was marked by a 10% year-over-year increase in revenue to $1.51 billion, driven primarily by growth in direct response advertising revenue and the rapid expansion of its direct revenue streams. The company's adjusted EBITDA was $182 million, and it generated $93 million in free cash flow. However, the net loss was $104 million, a reduction of more than 30% year-over-year. The actual EPS came out at -$0.06, missing estimates of $0.06. The company's cash and marketable securities stood at approximately $3 billion.

Publication Date: Nov -06

📋 Highlights
  • DAU/MAU Growth:: 477M DAU (+8% YoY) and 943M MAU (+7% YoY) with Q4 DAU expected to decline due to engagement headwinds.
  • Revenue Breakdown:: Total revenue $1.51B (+10% YoY), driven by $1.32B advertising (+5% YoY) and $190M other revenue (+54% YoY, Snapchat+ subscribers ~17M).
  • Adjusted EBITDA/FCF:: $182M adjusted EBITDA and $93M free cash flow, with net loss reduced by >30% YoY to $104M.
  • Snapchat+ Growth:: Subscription revenue surged to $190M (+54% YoY), achieving $750M+ annualized run rate with 35% YoY subscriber growth.
  • Perplexity AI Partnership:: $400M partnership (cash/equity) to integrate search into Snapchat, expected to contribute revenue starting 2026.

Advertising Revenue Growth

Direct response advertising revenue grew 8% year-over-year in Q3, accelerating from the prior quarter. Strength was seen in pixel purchase demand, app optimizations, and the small and medium-sized business segment. Europe and the rest of the world showed strong results, while North America lagged behind, although the SMB segment in this region grew over 25% year-over-year. The company's investments in AI and machine learning are delivering measurable gains for advertisers, with dynamic product ads driving over 4x higher conversion rates for certain campaigns.

Operational Highlights

The company continued to innovate on its core product experience, including efforts to address ongoing engagement headwinds. Snap is navigating evolving factors that may influence community growth and engagement in the near term, including regulation and government policy actions. The company expects overall DAU may decline in Q4 given these internal and external factors. However, Snap remains committed to its goal of serving 1 billion global monthly active users.

Valuation Metrics

Using the current valuation metrics, Snap's P/S Ratio stands at 2.19, and the EV/EBITDA is -52.38. The company's ROE is -24.17%, and the ROIC is -10.92%. With analysts estimating next year's revenue growth at 10.6%, the current valuation may be justified if the company can achieve its growth targets. However, the negative EPS and high valuation multiples indicate that the stock may be sensitive to any misses in its growth expectations.

Outlook

Snap's Q4 revenue guidance range is $1.68 billion to $1.71 billion, implying year-over-year revenue growth of 8% to 10%. The company has authorized a new share repurchase program in the amount of $500 million. With its strong cash position and commitment to innovation, Snap is well-positioned to continue investing in its long-term growth. The partnership with Perplexity AI is expected to contribute to revenue in 2026, and the company is exploring ways to expand its gross margins by improving top-line growth and becoming more efficient on cost of sales.

3. NewsRoom

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Russia blocks Snapchat, RIA reports

Dec -04

Source: reuters.com

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Snap: Perplexing Dip

Dec -03

Source: seekingalpha.com

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Snapchat is nearing 1 billion monthly users: Why can't it turn a profit?

Nov -29

Source: techxplore.com

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Wall Street Analysts See a 30.75% Upside in Snap (SNAP): Can the Stock Really Move This High?

Nov -28

Source: zacks.com

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Recent SNAP Disruptions Highlight Urgent Need for Sustained Action Against Food Insecurity

Nov -26

Source: prnewswire.com

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Snap offers Australians bank-linked age proof tool ahead of teen social media ban

Nov -24

Source: reuters.com

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Meta Allegedly Concealed Evidence Of Social Media Harm, According To Court Filings: Report

Nov -23

Source: feeds.benzinga.com

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Snap Inc. (NYSE:SNAP) Receives Consensus Rating of “Hold” from Brokerages

Nov -22

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.00%)

6. Segments

Snapchat

Expected Growth: 12%

Snapchat's 12% growth driven by increasing user engagement, augmented reality (AR) innovation, and expanding e-commerce integrations. Strong demand for its Discover feature, growing popularity among younger generations, and strategic partnerships with brands and creators also contribute to its growth momentum.

7. Detailed Products

Snapchat

A popular social media platform that allows users to send and receive disappearing photos and videos, as well as text and video chat with friends.

Spectacles

Smart glasses that allow users to capture and share photos and videos from their perspective, with a unique circular format.

Snap Ads

A platform that allows businesses to create and display ads on Snapchat, including video, image, and carousel ads.

Snapchat Lenses

Augmented reality (AR) effects that can be used to transform faces, add virtual objects, and try on virtual try-on experiences.

Snapchat Discover

A feature that allows publishers and creators to share longer-form, curated content, such as news articles, videos, and shows.

Snap Map

A feature that allows users to share their location with friends, and see what's happening in their area.

Bitmoji

A feature that allows users to create and customize their own avatars, which can be used in Snaps, chat, and other areas of the app.

8. Snap Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Snap Inc. faces moderate threat from substitutes as users can switch to other social media platforms like Instagram, Facebook, and TikTok for similar features and experiences.

Bargaining Power Of Customers

Snap Inc. has a large and diverse user base, which reduces the bargaining power of individual customers. Additionally, the company's free services and lack of switching costs make it difficult for customers to negotiate better terms.

Bargaining Power Of Suppliers

Snap Inc. has a diverse supply chain and is not heavily dependent on a single supplier. The company's cloud infrastructure is built on top of Amazon Web Services, Google Cloud, and Microsoft Azure, which reduces its bargaining power.

Threat Of New Entrants

The threat of new entrants is high in the social media and technology industries, where new companies can emerge quickly and disrupt existing business models. Snap Inc. faces competition from new entrants like TikTok, which has gained popularity among younger users.

Intensity Of Rivalry

The social media and technology industries are highly competitive, with multiple players competing for user attention and advertising revenue. Snap Inc. faces intense rivalry from established players like Facebook, Instagram, and Twitter, as well as new entrants like TikTok.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 64.28%
Debt Cost 4.24%
Equity Weight 35.72%
Equity Cost 9.18%
WACC 6.00%
Leverage 179.98%

11. Quality Control: Snap Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Alphabet

A-Score: 5.9/10

Value: 1.8

Growth: 8.3

Quality: 8.4

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Yelp

A-Score: 5.5/10

Value: 6.2

Growth: 7.8

Quality: 8.2

Yield: 0.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Meta

A-Score: 5.3/10

Value: 1.8

Growth: 8.8

Quality: 8.3

Yield: 0.0

Momentum: 7.5

Volatility: 5.7

1-Year Total Return ->

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Stock-Card
DoorDash

A-Score: 5.2/10

Value: 0.2

Growth: 9.1

Quality: 6.3

Yield: 0.0

Momentum: 9.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Pinterest

A-Score: 4.8/10

Value: 2.8

Growth: 8.6

Quality: 8.8

Yield: 0.0

Momentum: 4.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Snap

A-Score: 3.1/10

Value: 5.3

Growth: 6.4

Quality: 3.4

Yield: 0.0

Momentum: 0.5

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

7.76$

Current Price

7.76$

Potential

-0.00%

Expected Cash-Flows