Snap Inc.

Q2 revenue increased 19% year over year to $1.6 billion. Advertising revenue grew 9% to $1.28 billion, and other revenue grew 85% to $316 million. Gross margin was 58%, up 7 percentage points year over year. Net loss improved to $164 million, adjusted EBITDA was $250 million, operating cash flow was $176 million, and free cash flow was $121 million. On the user side, monthly active users reached 971 million and daily active users were 493 million. For Q3, Snap guided to revenue of $1.70 billion to $1.74 billion and adjusted EBITDA of $300 million to $350 million. Full-year infrastructure costs are now expected to be $1.65 billion to $1.70 billion, versus prior guidance of $1.60 billion to $1.65 billion; full-year adjusted operating expenses remain about $2.75 billion and stock-based compensation about $1.05 billion.

Evan Spiegel framed Q2 as a meaningful step toward Snap’s long-term priorities: strengthening engagement, accelerating revenue growth, and building a more cash-generative core business. He said the company is using AI to improve product performance, ad outcomes, and internal efficiency, while keeping Specs as the largest long-term investment opportunity. His tone was confident and strategic, emphasizing that free cash flow will fund growth, dilution management, and a healthier balance sheet.

Doug Hott emphasized operating leverage, saying total adjusted cost structure rose just 4% year over year while revenue grew 19%. He highlighted gross margin of 58%, adjusted EBITDA of $250 million, and 12-month operating cash flow of $919 million and free cash flow of $706 million, alongside $2.7 billion in cash and marketable securities at quarter-end. He also noted the raised infrastructure outlook reflects additional AI and machine-learning investment, while the company plans to keep operating expenses disciplined and use free cash flow for share repurchases and dilution management.

Analysts pressed on whether Q2 marked a durable inflection, and management said the improvement was broad-based across ad products, automation, measurement, and go-to-market execution, with conversions up 56% year over year. Questions on Specs focused on preorder demand, investment pacing, and whether it might be separated into a standalone company; Spiegel said interest has been strong, but the near-term focus is product quality, customer experience, and ecosystem development, with mass-market adoption likely toward the end of the decade. Management also addressed North America DAU stability, saying it was encouraged by the quarter-over-quarter stabilization and Spotlight engagement growth, while acknowledging regulatory risks around age assurance, privacy, and online safety.