Snap Inc. (NASDAQ: SNAP) saw its shares tumble 11.46% in after‑hours trading on Wednesday, falling to $5.24 from the prior close of $5.92. The decline followed the company’s third‑quarter earnings release, which showed a revenue increase but missed consensus estimates and fell short on daily active user (DAU) counts. The after‑hours sell‑off erased the 5.81% intraday gain that had lifted the stock earlier in the session.

Earnings Overview

Snap reported third‑quarter revenue of $1.72 billion, a 14% year‑over‑year rise that landed just below the $1.73 billion forecast cited by LSEG analysts. Net income turned positive at $56 million, a swing from a $104 million loss in the same quarter a year earlier. Adjusted earnings per share came in at $0.19, topping the $0.16 consensus, while adjusted EBITDA more than doubled to $383 million, exceeding the $337 million estimate. For the fourth quarter, Snap guided revenue between $1.95 billion and $1.985 billion, with the midpoint slightly above Wall Street’s $1.95 billion expectation. Adjusted EBITDA guidance of $490 million to $525 million also sits marginally above the $498 million forecast.

User Metrics Shift

The report highlighted a shortfall in daily active users, which rose to 495 million, missing the roughly 499 million target used by StreetAccount. Monthly active users (MAU) reached 977 million, and Snap announced that beginning in the first quarter of 2027, MAU will replace DAU as the company’s primary audience metric. The shift reflects Snap’s strategic focus on longer‑term engagement and its intention to stop reporting regional DAU and regional average revenue per user (ARPU). Despite the DAU miss, ARPU held steady at $3.48, aligning with estimates.

Advertising Mix and Product Outlook

Advertising revenue grew 4% year over year, while “other” revenue—driven primarily by the Snapchat+ subscription bundle, Memories Storage, and Lens+—jumped 84%. Paid subscribers now exceed 30 million. Chief Commercial Officer Ronan Harris attributed the modest ad growth to reduced spending by consumer‑packaged‑goods (CPG) companies, citing macro pressures in the United States and the Middle East. He noted that financial‑services advertisers are showing “very positive signs of growth” in the U.S., suggesting a diversification of Snap’s ad base. CEO Evan Spiegel reiterated the company’s commitment to augmented‑reality initiatives, referencing the upcoming launch of the Specs smart‑glasses, which are priced from $2,195 and currently available for preorder. Shipping is slated for the fall, and the devices will feature an AI‑driven assistant called Specs Intelligence.

What to Watch Next

Investors will focus on Snap’s Q4 earnings, particularly whether the company can sustain the momentum in subscription revenue and translate the growing financial‑services ad spend into higher overall ad growth. The performance of the Specs smart‑glasses, including preorder conversion rates and early consumer feedback, will also be closely monitored as Snap seeks to expand beyond its core social‑media business. Finally, analysts will watch how the transition to monthly active users as the primary metric influences advertiser pricing and long‑term user engagement trends.