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Snap shares spike on quarterly revenue and daily active users beat
11/5/2025, 9:45:34 PM
Economic Summary
- Snap (SNAP) reported revenue of $1.51 billion versus $1.49 billion expected, with daily active users exceeding forecasts by about 1 million; this suggests stronger ad demand and monetization than analysts anticipated.
- Adjusted EBITDA came in at $182 million versus estimates of $125 million, indicating improved operating profitability and potentially better margin leverage from ad products and cost controls.
- The company posted a GAAP EPS loss of $0.06, which is not directly comparable to expectations; investors should weigh adjusted profitability improvements against GAAP losses when assessing fundamentals.
- Snap announced a $500 million share repurchase program, which signals management confidence and can support the stock by reducing share count and returning capital to shareholders.
- Snap disclosed a commercial partnership with Perplexity to integrate an AI chatbot into Snapchat, with Perplexity paying Snap $400 million over the year; this is both a near-term revenue boost and strategic AI monetization move.
- Management guided Q4 revenue and EBITDA above consensus midpoints but warned of an expected decline in daily active users in Q4, creating a mixed outlook of stronger monetization but potential user headwinds.
Bullish
- Revenue beat: $1.51B versus $1.49B estimate.
- Adjusted EBITDA of $182M topped $125M estimates.
- $500M stock repurchase signals capital return and management confidence.
- Perplexity deal brings $400M and AI chatbot integration into Snapchat.
- Q4 revenue and EBITDA guidance midpoints are ahead of consensus.
Bearish
- Snap expects daily active users to decline in Q4, signaling potential user softness.
- Reported GAAP EPS loss of $0.06 could concern investors despite adjusted metrics.
- Ongoing investments in AI may pressure near-term earnings despite EBITDA beat.
Bullish tickers
SNAPPERPLEXITY
Bearish tickers
SNAP
SNAP
Bullish
Revenue and adjusted EBITDA beats, $500M buyback, and $400M Perplexity partnership support upside.
Bearish
GAAP EPS loss and expected Q4 DAU decline could pressure shares despite metrics beat.
PERPLEXITY
Bullish
Paying Snap $400M and integrating its AI chatbot into Snapchat could accelerate commercial adoption and revenue growth.
Bearish
Private company risk and visibility concerns; reliance on the Snap deal for near-term revenue.