Snap Inc. Q2 2026 Earnings Recap

Snap’s shares surged 23.5% following an encouraging quarter marked by strong user growth and accelerating revenue, driven notably by rapid expansion in Snap’s other revenue streams and improving advertising momentum.

Key Takeaways

• Monthly active users grew to 971 million, and daily active users reached 493 million, underscoring ongoing scale expansion.
• Total revenue increased 19% year-over-year to $1.6 billion; advertising revenue rose 9% to $1.28 billion while other revenue soared 85% to $316 million.
• Gross margin improved to 58%, supported by AI-driven efficiencies in ad delivery and internal operations.
• Operating cash flow was positive at $176 million, with free cash flow of $121 million, now the company’s primary financial metric.
• AI enhancements drove notable gains in advertiser outcomes: cost per install down 8%, cost per purchase down 18%, and app purchase volume up 128%, benefiting advertiser retention and spend.