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Snap shares fall over 10% on third-quarter revenue miss
Snap’s shares fell by more than 10% after the company reported third-quarter revenue and daily active users below expectations. The miss weighed on the results despite higher adjusted earnings and a return to net profit, while Snap’s guidance put fourth-quarter revenue slightly ahead of analysts’ forecasts at the midpoint.
Sales rose 14% year on year, and net income was $56 million, compared with a $104 million loss a year earlier. Adjusted earnings reached $383 million against an expected $337 million; Snap reported 977 million monthly active users and plans to make that its primary audience measure from the first quarter of 2027. Executives said weaker spending by some consumer goods advertisers, amid US and Middle East economic pressures, hurt sales, while financial services was a promising area for growth.
In short
- Snap shares dropped more than 10% after a revenue miss.
- Quarterly sales rose 14%, and net income reached $56 million.
- Snap plans to prioritise monthly users as its audience measure in 2027.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Investors can reasonably view the share-price fall as a response to disappointing core indicators: revenue and daily active users both missed expectations, and weaker consumer-goods advertising points to pressure on Snap’s business. Those measures may matter more to confidence in future growth than a return to profit or adjusted earnings above forecasts, particularly when the revenue outlook is only slightly ahead of estimates.
The case against
The market reaction may give too little weight to signs of improving performance: sales rose 14% year on year, Snap returned to net profit, and adjusted earnings beat expectations. Fourth-quarter revenue guidance is also slightly above forecasts, while financial services offers a potential source of growth; on this view, a sharp fall over one quarter’s misses may understate the company’s progress and prospects.