SNAP

A month has gone by since the last earnings report for Paylocity (PCTY). Shares have added about 4.6% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Paylocity due for a pullback? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Paylocity Holding Corporation before we dive into how investors and analysts have reacted as of late. Paylocity reported fourth-quarter fiscal 2026 non-GAAP net income of $1.84 per share, which increased 17.9% year over year and beat the Zacks Consensus Estimate by 19.48%.Total revenues increased 11% year over year to $444.7 million and surpassed the Zacks Consensus Estimate by 3.18%.Top-line growth was driven by the 12.4% increase in recurring and other revenues (roughly 93% of total revenues) to $415.6 million. Interest income on funds held for clients (about 7% of total revenues) declined 5.6% year over year to $29.1 million. Paylocity's adjusted gross profit was $327.5 million, up 10.4% from the year-ago period, though the adjusted gross margin contracted roughly 40 basis points (bps) to 73.6%. Non-GAAP operating income rose 13.8% year over year to $120.2 million, with the non-GAAP operating margin expanding about 70 bps to 27%.Adjusted EBITDA increased 11.3% from the year-ago quarter to $145.5 million, with the adjusted EBITDA margin up roughly 10 bps to 32.7%. Adjusted EBITDA excluding interest income on funds held for clients rose 16.5% year over year to $116.4 million, with margin (as a percentage of recurring and other revenues) up roughly 100 bps to 28%.GAAP net income for the quarter was $60.3 million, or $1.12 per share, up 24.1% and 30.2%, respectively, from $48.6 million, or 86 cents per share, in the year-ago quarter. As of June 30, 2026, Paylocity's cash and cash equivalents were $271.9 million, down from $299.7 million as of March 31, 2026.Long-term debt totaled $81.3 million as of the end of fiscal 2026, down 50% from $162.5 million a year earlier, reflecting repayment of approximately $81.3 million on the outstanding credit facility balance (originally drawn to fund the October 2024 acquisition of Airbase Inc.) during fiscal 2026.Net cash provided by operating activities for fiscal 2026 was $533.3 million (30.1% of total revenues), up 27.5% from $418.2 million (26.2% of total revenues) in fiscal 2025. Free cash flow rose 24.8% year over year to $427.8 million, or 24.2% of total revenues, compared with $342.8 million, or 21.5%, in fiscal 2025.Paylocity repurchased $398.1 million, or approximately 2.8 million shares, of common stock during fiscal 2026, bringing cumulative repurchases since May 2024 to $697.8 million, or approximately 4.6 million shares. Approximately $1.3 billion remained available under the share repurchase authorization as of June 30, 2026. In April 2026, Paylocity completed the acquisition of Grayscale Labs, Inc., an AI-powered recruiting automation company, expanding its recruiting capabilities to help clients engage candidates earlier and move faster through hiring workflows.The company also launched Paylocity Elevate Solutions, pairing its unified platform with dedicated payroll and HR experts to handle implementation, ongoing payroll processing and HR execution on clients' behalf, comprising Elevate Implementation, Elevate Payroll and Elevate HR.The company also disclosed a change in accounting convention: beginning in fiscal 2027, deferred contract costs will be amortized over an eight-year useful life, up from seven years, a shift expected to lift fiscal 2027 adjusted EBITDA margins by approximately 120-140 bps.Management also pointed to continued investment in its AI platform capabilities across HR, Finance and IT workflows as a key driver of the company's product strategy heading into fiscal 2027. For the first quarter of fiscal 2027, Paylocity expects total revenues in the range of $439.5-$444.5 million, indicating approximately 8% growth from the year-ago period. Recurring and other revenues are projected between $414 million and $419 million, implying approximately 10% growth.Adjusted EBITDA is projected in the range of $152-$156 million, while adjusted EBITDA excluding interest income on funds held for clients is expected between $126.5 million and $130.5 million.For fiscal 2027, Paylocity projects total revenues between $1.88 billion and $1.895 billion, implying approximately 7% growth over fiscal 2026. Recurring and other revenues are expected in the range of $1.777-$1.792 billion, suggesting approximately 8% growth.Adjusted EBITDA is expected between $690 million and $700 million, while adjusted EBITDA excluding interest income on funds held for clients is projected between $587 million and $597 million. In the past month, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 15.39% due to these changes. Currently, Paylocity has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Paylocity has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. Paylocity is part of the Zacks Internet - Software industry. Over the past month, Snap (SNAP), a stock from the same industry, has gained 4.9%. The company reported its results for the quarter ended June 2026 more than a month ago. Snap reported revenues of $1.6 billion in the last reported quarter, representing a year-over-year change of +18.9%. EPS of $0.06 for the same period compares with -$0.01 a year ago. For the current quarter, Snap is expected to post earnings of $0.16 per share, indicating a change of +166.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +50% over the last 30 days. Snap has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Paylocity Holding Corporation (PCTY) : Free Stock Analysis Report Snap Inc. (SNAP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

AppLovin's ad engine handles more spend than Pinterest, Snapchat, and Reddit combined, posting $1.92 billion in Q2 2026 revenue at 84% EBITDA margins. Grieve passed, warning a rival could write a better algorithm and erase AppLovin's moat overnight, with 55% of top mobile games already on the platform. Grieve's valuation model reaches a $480 price target implying just a 9% CAGR, making the risk-reward unattractive despite aggressive buybacks and strong guidance. Just released. Our analysts combed the entire stock market and named the ten best stocks to buy right now. The report is free. Enter your email and see if any of your stocks made the cut. Shares of AppLovin (NASDAQ:APP) closed at $319.05 on September 2, marking a 52.7% year-to-date decline for a stock that spent late 2025 above $656. On the September 3, 2026, episode of The Investor's Podcast Network's We Study Billionaires, hosts Kyle Grieve and Shawn O'Malley devoted a full teardown to the mobile ad platform. Grieve framed the show as "TIP843: AppLovin (APP): The 30-Bagger Down More Than Half." After walking through the model, both hosts passed. The scale is the first thing that lands. Grieve noted that "the advertising spend on AppLovin is more than Pinterest, Snapchat's and Reddit's combined revenue." That comparison puts the AXON 2 engine in context for readers outside ad tech. AppLovin runs a marketplace where mobile game publishers and, increasingly, e-commerce brands bid for user attention through the company's recommendation algorithm. Asset-light in this context means the platform monetizes traffic without owning the audience: no content studio, no consumer app, minimal capex. O'Malley pointed to "over 79% over the last 12 months" adjusted EBITDA margins and $7.6 million in revenue per employee as evidence of that model. Q2 2026 revenue reached $1.92 billion, up 52.82% year over year, with an 84% adjusted EBITDA margin, per AppLovin's Q2 2026 8-K exhibit filed with the SEC. Free Report, Just Released Did Any of Your Stocks Make the Top 10 List? It is an uncomfortable question, and there is now an answer to it. 24/7 Wall St has helped investors make money for over two decades, and our top analysts just finished ranking the definitive Top 10 Stocks To Buy Now. Not the ten biggest companies. Not the ten everyone is arguing about. The ten best stocks to buy right now. Open your account and look at what you own. Some of it you bought for a reason you could still defend today. Some of it you bought years ago for a reason you can no longer remember. The report is free. Put the ten next to what you own and find out which is which. Enter Your Email and See the Ten → Free from 24/7 Wall St. It lands in your inbox. Grieve recounted CEO Adam Foroughi's 2015 decision to turn down an acquisition offer: "He walked away hoping for a valuation closer to a billion dollars. To give you an idea of how big a mistake that would have been, the company is now valued at a little over a hundred billion dollars today." AppLovin's market cap stands near $107.2 billion as of September 3, 2026. The anecdote set up the hosts' capital-allocation debate. Grieve graded the buyback program highly. AppLovin repurchased 1.1 million Class A shares for $551.3 million in Q2 2026 and 6.4 million shares for $2.58 billion across full-year 2025. O'Malley took a more skeptical view of overall capital allocation, citing prior M&A history that included studio acquisitions later divested. The company recorded a $188.9 million goodwill impairment and a $99.4 million loss from discontinued operations in FY 2025. Grieve graded buybacks well; O'Malley graded the full record as average. Both positions stayed on the table. Grieve's core concern was the durability of an algorithmic moat: "There's just something I don't really like about a business whose core advantage is a really good algorithm, because it feels like another business can just write a better algorithm and then poof, there goes your business model." He layered on saturation risk, noting roughly 55% of top mobile games are already on Max. O'Malley framed the same worry through platform economics. With Google and Meta, "it's sort of transcended just the algorithm" because network effects anchor the business regardless of which quarter's ranking model wins. AppLovin looks more like a pure technology bet in his framing. The hosts invoked a circle-of-competence argument, the Warren Buffett idea that investors should only underwrite businesses they can accurately model. Both said ad-tech algorithms sit outside theirs, echoing their earlier caution on Trade Desk (NASDAQ:TTD). Grieve's base case used a 17% revenue CAGR, 77% EBITDA margins, and a 13x EV/EBITDA multiple to reach a $480 price target implying a 9% CAGR. His verdict: "My thoughts on this business are that it's a pass. While it certainly offers upside, I just don't think I could find myself getting comfortable enough with the business to ever have it in the intrinsic value portfolio or my personal account." Foroughi is running the buyback aggressively, and Q3 2026 guidance calls for revenue of $2.055 billion to $2.085 billion at roughly 83% adjusted EBITDA margin. The CEO's conviction is expressed in capital returns. Grieve and O'Malley's restraint is a reminder that two disciplined investors can pass on one of the best businesses either of them has ever modeled without predicting a break. Readers weighing AppLovin after the drawdown should decide whether an algorithm is the kind of moat they are willing to hold through a competitive shock. If you have cash sitting in your account right now, give this two minutes. After more than two decades of helping investors beat the market, our top analysts at 24/7 Wall St. put together a definitive report on the Top 10 Stocks To Buy Today. They combed the entire market. It's not 10 ideas, not 10 stocks everyone is talking about, it's what their research point to as the 10 best stocks to buy right now, and it's free. Read more here and >;elm:context_link;itc:0;sec:content-canvas" data-yga="{"yLinkElement":"context_link","yModuleName":"content-canvas","yLinkText":"see which stocks made the cut -->"}" class="link ">see which stocks made the cut -->> Contact [email protected] for any questions or corrections.

It has been about a month since the last earnings report for Snap (SNAP). Shares have lost about 7.6% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Snap due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Snap Inc. before we dive into how investors and analysts have reacted as of late. Snap reported second-quarter 2026 net loss of 10 cents per diluted share. Adjusted earnings came in at 6 cents per share compared with the Zacks Consensus Estimate of 7 cents. Revenues rose 19% year over year to $1.59 billion and beat the Zacks Consensus Estimate by 4.31%. The figure exceeded the top end of the company's prior guidance range of $1.52-$1.55 billion.Adjusted EBITDA increased 505% year over year (a $208 million increase) to $250 million from $41 million a year earlier and came above the high end of the company's prior guided range of $175-$200 million. Operating loss narrowed 34% year over year to $171 million from $260 million. Revenues from North America (59% of total revenues) rose 15% year over year to $943 million. Revenues from Europe (22% of revenues) climbed 33% year over year to $354 million. Revenues from the Rest of World (ROW) (19% of revenues) rose 17% year over year to $302 million.Average revenue per user (ARPU) increased 13% year over year to $3.25. North America's ARPU climbed 23% year over year to $10.26, Europe's ARPU rose 36% year over year to $3.62, and ROW's ARPU increased 4% year over year to $1.Advertising revenues rose 9% year over year to $1.28 billion, reflecting improved momentum with large advertisers in North America, broader adoption of the company's AI-powered Smart Campaign Solutions, and continued strength among small and medium-sized businesses. Other Revenue, which includes Snapchat+ subscriptions, Memories Storage and Lens+, jumped 85% year over year to $316 million. The company noted that less than 3% of its monthly active users are currently paying subscribers, indicating room for continued direct-revenue growth through premium features and additional subscription products. Snap's global community reached 493 million daily active users (DAU) in the second quarter, up 5% year over year and from 483 million in the prior quarter. Snap reported 971 million monthly active users (MAU), up 4% year over year, moving closer to the company's long-stated goal of 1 billion MAUs.In the United States, the number of people posting to Spotlight grew more than 115% year over year, while Spotlight daily active viewers grew more than 20% year over year, supported by continued investment in creators and AI-powered recommendations.The company also noted that its U.S. audience continues to broaden quarter over quarter, led by users aged 35 and older, increasing Snapchat's relevance in categories such as automotive, healthcare, home goods, financial services, insurance and business-to-business services, and helping diversify the advertiser base. AI-driven advertising tools drove efficiency gains during the quarter. For app advertisers, cost per install declined 8% year over year, cost per purchase decreased 18% year over year, and app purchase volume increased 128% year over year. Dynamic Product Ads revenues grew 43% year over year on greater adoption by retailers. Advertisers increased spending across native surfaces such as Sponsored Snaps, where roughly one-third of Snapchatters reached were incremental to other surfaces on Snapchat.Citing an independent study from Measured, the company noted that Snapchat delivered approximately 19.3% higher incremental return on ad spend for the brands in that portfolio, versus the blended incremental return across their social advertising overall. Snap highlighted several internal efficiency gains tied to its AI investments during the quarter. Code commits per engineer increased 75% year over year, while major reliability issues declined 57% year over year. The company's internal AI code reviewer now covers approximately 90% of pull requests and has saved an estimated 30,000 hours of code-review time. Its AI-powered support agent answers approximately 3.9 million Snapchatter questions per month and has cut support ticket volume by approximately 62% since the start of the year. In advertising operations, first-pass image-review automation rose from 40% in the second quarter of 2025 to nearly 90% in the second quarter of 2026, improving advertiser approval speed and content safety while lowering operating costs.Operating DetailsGAAP gross margin expanded seven percentage points year over year to 58%, while adjusted Gross Margin reached 59%. The company's total adjusted cost structure increased just 4% year over year, as operating efficiencies offset continued investment in long-term revenue drivers. Snap ended the second quarter with approximately $2.7 billion in cash and marketable securities. Operating cash flow was $176 million for the quarter, up 99% year over year, and $919 million on a trailing-12-month basis. Free Cash Flow was $121 million for the quarter, up 407% year over year, and $706 million on a trailing-12-month basis. Snap expects third-quarter 2026 revenues in the range of $1.70-$1.74 billion, implying growth of approximately 19% year over year at the midpoint. The company projects adjusted EBITDA between $300 million and $350 million for the third quarter, with personnel-cost savings from its recently completed restructuring expected to be more fully reflected in the third quarter and beyond.Snap raised its full-year infrastructure cost guidance to $1.65-$1.7 billion, from a prior range of $1.60-$1.65 billion, reflecting additional investment in AI and machine-learning infrastructure needed to support revenue growth. All Other Cost of Revenue, excluding Infrastructure Costs, is still expected to represent 16-17% of revenues for the full year. Full-year adjusted Operating Expenses are expected at approximately $2.75 billion, with stock-based compensation expected at approximately $1.05 billion. In the past month, investors have witnessed a flat trend in fresh estimates. The consensus estimate has shifted -125% due to these changes. Currently, Snap has a great Growth Score of A, a score with the same score on the momentum front. However, the stock has a score of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Snap has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Snap belongs to the Zacks Internet - Software industry. Another stock from the same industry, CCC Intelligent Solutions Holdings Inc. (CCC), has gained 14.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. CCC Intelligent Solutions reported revenues of $285.93 million in the last reported quarter, representing a year-over-year change of +9.8%. EPS of $0.10 for the same period compares with $0.09 a year ago. For the current quarter, CCC Intelligent Solutions is expected to post earnings of $0.11 per share, indicating a change of +22.2% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days. CCC Intelligent Solutions has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Snap Inc. (SNAP) : Free Stock Analysis Report CCC Intelligent Solutions Holdings Inc. (CCC) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

When you buy through links on our articles, Future and its syndication partners may earn a commission. Stocks barely budged Wednesday as Wall Street took a cautious stance ahead of this week's key events, namely, Nvidia (NVDA) earnings this evening and Federal Reserve Chair Kevin Warsh's keynote speech at Jackson Hole on Friday. Market participants also sifted through a busy economic calendar, which included a hotter-than-expected inflation report. Ahead of the open, the Bureau of Economic Analysis (BEA) said the Personal Consumption Expenditures Price Index (PCE) — the Fed's preferred measure of inflation — rose 0.2% from June to July, and was up 3.7% from the year-ago period. Economists expected the monthly and yearly figures to arrive at 0.1% and 3.6%, respectively. Core PCE, which excludes volatile food and energy prices, was up 0.2% month over month and 3.3% year over year, matching economists' forecasts. "With markets continuing to be sensitive to any data that could increase the odds of rate hikes, today's mild upside inflation surprise and relative economic strength weren't necessarily what investors — or the Fed — wanted to see," says Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management. Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day. The data did little to shift the needle on expectations for a rate hike at the Fed's September meeting. According to CME Group FedWatch, futures traders are pricing in a 60% chance the central bank keeps the federal funds rate unchanged next month — roughly the same as yesterday. But Zentner says "if subsequent data point in the same direction, the Fed may feel more pressure to move off the sidelines." Short-term Treasury yields ticked higher after today's inflation data while equity benchmarks slipped. At the close, the blue-chip Dow Jones Industrial Average was down 0.2% at 53,463, the broader S&P 500 was off 0.02% at 7,675, and the tech-heavy Nasdaq Composite was 0.08% lower at 26,130. Nike (NKE) was the worst Dow Jones stock today — sinking 2.3% and hitting a 12-year intraday low of $38.41 along the way — after Truist Securities analyst Joseph Civello downgraded the athletic apparel and footwear retailer to Hold from Buy. He also lowered his price target to $42 from $47. Track all markets on TradingView The downgrade comes after Dick's Sporting Goods (DKS, +4.3%) cut its full-year guidance Wednesday on weakness in its Foot Locker chain, sending shares of the consumer discretionary stock down more than 30%. This, says Civello, "signals incremental murkiness around NKE's turnaround progress." Civello also downgraded Dick's to Hold and slashed his price target to $135 from $270, saying the athletic retail chain "appears increasingly exposed to Nike with limited visibility into the product improvements needed for the brand's turnaround." The 2025 acquisition of Foot Locker increased Nike's sales penetration at DKS to 35%-40% from 25%. Nvidia was another Dow stock that closed in negative territory today, falling 1.6%, ahead of the artificial intelligence (AI) bellwether's critical after-the-close earnings report. Track all markets on TradingView Wall Street is expecting another beat-and-raise quarter from the chipmaker, but the real uncertainty rests in the forward guidance and what it means for AI demand, as well as the stock's reaction and how that impacts the broader market. You can follow along with all the latest news and commentary on Nvidia earnings on our live blog. Brandon Zureick, chief economist and senior managing director at Johnson Investment Counsel, says the timing of Nvidia's earnings event is notable considering it comes ahead of Chair Warsh's first keynote speech at the Jackson Hole Economic Symposium this Friday. "The current bull market continues to be driven by the artificial intelligence investment theme, and Warsh's commentary could influence investor sentiment," Zureick explains. The Fed chair has been deliberately vague ahead of the event and "higher long-term interest rates represent a potential headwind for the artificial intelligence trade," says Zureick. Following today's sticky PCE data, Wall Street will be looking to Warsh for more clarity on inflation and interest rates. While Nvidia and Warsh are top of mind this week, Meta Platforms (META, +1.1%) made headlines after the company agreed to an $18 billion settlement with 48 states, the District of Columbia and several U.S. territories to end a landmark case over social media's impact on children. Track all markets on TradingView Meta will also implement changes at Facebook and Instagram, including setting a two-hour time limit on the apps for users under the age of 18 and launching "night mode" and "school mode." Under the terms of the agreement, the social media platform will only pay out 70% of the settlement unless TikTok and Alphabet's (GOOGL, -1.4%) YouTube agree to pay a financial penalty, and the two platforms, along with Snapchat parent Snap (SNAP, -8.5%), agree to implement new safety measures. Stock Picks That Billionaires Love 33 Stocks That Could Rally 33% or More 5 Dolly Parton Quotes Retirees Should Live By

Slipped 0.04% to 7,675, the S&P 500 (SNPINDEX:^GSPC) drifted lower alongside a 0.08% decline to 26,130 for the Nasdaq Composite (NASDAQINDEX:^IXIC), while a 0.21% drop to 53,464 for the Dow Jones Industrial Average (DJINDICES:^DJI) snapped its three-day winning streak. Abercrombie & Fitch (NYSE:ANF) shares soared 36% after the retailer raised its full-year guidance on a second-quarter earnings beat. Elsewhere, Meta Platforms (NASDAQ:META) saw volatile trading after settling a legal dispute for 17 billion. In similar, but unrelated news, Snap Inc. (NYSE:SNAP) saw its shares decline 9% as Pennsylvania's Attorney General filed a lawsuit against the company due to its addictive features and child safety concerns -- much like Meta's settlement laid out. Meta's $17 billion settlement with dozens of states over its child safety concerns stole the headlines today, but its stock was largely flat, as the market had already somewhat anticipated this possibility. Meta agreed to certain terms for users under 18 across both Facebook and Instagram, including: a default two-hour max a six-hour night-time block limits on like counts more robust age checks removal of users under 13 parental requirement to remove time-related maxes higher response rates on harmful content review One interesting wrinkle in the settlement is that if TikTok and YouTube join in on the agreement, Meta's teenage time limit would drop to one hour. The other major headline today is that Nvidia (NASDAQ:NVDA) is reporting earnings after the bell right now. Currently, shares are up 5% as of 5:45 p.m. ET after the semiconductor behemoth reported sales and EPS growth of 106% and 128%, respectively. Nvidia also raised its sales guidance for the third quarter to 89% growth. Speaking to the power of these incredible results, CEO and founder Jensen Huang explained, "The AI infrastructure build-out is at full steam. Vera Rubin, now in full production, was built to power exactly this moment." Before you buy stock in Invesco QQQ Trust, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Invesco QQQ Trust wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $443,461!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,307,633!* Now, it’s worth noting Stock Advisor’s total average return is 973% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 26, 2026. Josh Kohn-Lindquist has positions in Nvidia. The Motley Fool has positions in and recommends Meta Platforms and Nvidia. The Motley Fool recommends Abercrombie & Fitch. The Motley Fool has a disclosure policy. Stock Market Today, Aug. 26: Stocks Edge Lower As Market Digests Meta Ruling and Awaits Nvidia's Earnings was originally published by The Motley Fool

Snapchat’s second quarter saw a stronger-than-expected performance, which management attributed to momentum in both its advertising and subscription businesses. CEO Evan Spiegel emphasized that recent investments in ad platform automation and AI-powered tools have started to pay off, citing a 56% year-over-year increase in conversion events and growing adoption of new ad formats like sponsored Snaps. The company also benefited from major sporting events and robust growth among its small and medium-sized business advertisers. Management highlighted that a restructuring of the cost base earlier in the year enabled Snap to scale efficiently and deliver operating leverage, supporting improved margins and cash generation. Is now the time to buy SNAP? Find out in our full research report (it’s free). Revenue: $1.60 billion vs analyst estimates of $1.54 billion (18.9% year-on-year growth, 3.8% beat) Adjusted EPS: $0.13 vs analyst estimates of $0.06 (significant beat) Adjusted EBITDA: $249.6 million vs analyst estimates of $185.3 million (15.6% margin, 34.7% beat) Operating Margin: -10.7%, up from -19.3% in the same quarter last year Market Capitalization: $9.01 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Douglas Anmuth (JPMorgan) asked about the durability of recent growth. CEO Evan Spiegel pointed to broad improvements in ad platform performance and conversion rates, emphasizing ongoing gains across both large and small advertisers. Ross Sandler (Barclays) questioned the investment pacing for Specs and whether a spin-out was considered. Spiegel explained the company’s focus on product quality, ecosystem development, and disciplined investment tied to milestones, and did not rule out alternative structures in the future. Daniel Salmon (New Street Research) asked about North America user trends and the impact of regulatory changes. Spiegel highlighted stabilization in daily active users and growing relevance among users over 35, while flagging ongoing monitoring of regulatory risks. Richard Greenfield (LightShed Partners) requested insight into Specs preorder volumes and the World Cup’s effect on revenues. Spiegel described strong interest in Specs, while CFO Doug Hott clarified that World Cup-related ad spending benefited Q2 but would normalize in Q3. Michael Nathanson (MoffettNathanson) pressed on the financial rationale for Specs investment given larger competitors. Spiegel argued Snap’s integrated technology stack and first-mover advantage position it well, despite the resource gap with larger firms. Going forward, the StockStory team will be tracking (1) the commercial rollout and initial user feedback on Specs, (2) sustained growth in subscription revenue and progress toward higher subscriber penetration, and (3) evidence that AI-driven ad products continue to improve advertiser outcomes and platform engagement. Regulatory developments and Snap’s ability to manage infrastructure costs without sacrificing growth will also be important signposts. Snap currently trades at $5.31, up from $5.04 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free for active Edge members). ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies. Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Monday, Aug. 3, 2026, at 5 p.m. ET Head of Investor Relations - David Ometer Chief Executive Officer and Co-Founder - Evan Spiegel Chief Financial Officer - Doug Hott Operator: Good afternoon, everyone, and welcome to Snap Inc.'s Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to David Ometer, Head of Investor Relations. David Ometer: Thank you, and good afternoon, everyone. Welcome to Snap's Second Quarter 2026 Earnings Conference Call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder; and Doug Hott, Chief Financial Officer. Please refer to our Investor Relations website at investor.snap.com to find today's press release, earnings slides and investor letter. This conference call includes forward-looking statements, which are based on our assumptions as of today. Actual results may differ materially from those expressed in these forward-looking statements, and we make no obligation to update our disclosures. For more information about factors that may cause actual results to differ materially from these forward-looking statements, please refer to the press release we issued today as well as risks described in our most recent Form 10-K or Form 10-Q, particularly in the section titled Risk Factors. Today's call will include both GAAP and non-GAAP measures. Reconciliations between the two can be found in today's press release and earnings slides available on our IR website. Please note that when we discuss all of our expense figures, they will exclude stock-based compensation and related payroll taxes as well as depreciation and amortization and certain other items. Please refer to our filings with the SEC to understand how we calculate any of the metrics discussed on today's call. With that, I'd like to turn the call over to Evan. Evan Spiegel: Hi, everyone, and welcome to our call. Snapchat is now one of the largest Internet communities in the world, approaching 1 billion people using our service every month. Over the past few years, we worked intensely to rebuild our monetization platform and improve our go-to-market strategy, and those efforts are producing stronger results. Our objective now is to turn our scale into durable growth and stronger cash generation while demonstrating the long-term value of our investment in Specs. We are approaching this work with a more focused AI-enabled operating model. AI is helping us improve our service faster, deepening engagement and improving outcomes for advertisers. That supports revenue growth, margin expansion and free cash flow. Free cash flow gives us the flexibility to continue investing in long-term opportunities, offset dilution and strengthen our balance sheet. That is why free cash flow per share will be our primary financial objective going forward. Our largest long-term opportunity is Specs, a new kind of computer built into see-through glasses. Specs are designed for a future in which AI does more work on our behalf and people spend less time operating screens. I believe we can pursue that future from a much stronger position by continuing to improve our core business and remaining disciplined about how we invest. Last fall, I outlined three priorities for Snap, strengthen our community and engagement, accelerate and diversify revenue growth and build a more profitable cash-generative core business. Q2 was a meaningful step forward across all three. Monthly active users grew to 971 million and daily active users reached 493 million. Revenue increased 19% year-over-year to $1.6 billion. Advertising revenue grew 9% to $1.28 billion, while other revenue grew 85% to $316 million. Gross margin reached 58%, net loss was $164 million and operating cash flow was $176 million. Adjusted EBITDA was $250 million and free cash flow was $121 million. At its core, Snapchat helps close friends and families stay connected. Over time, we have built Spotlight, Snap Map and Augmented reality around that foundation, giving our community more reasons to open Snapchat, discover something new and share it with the people that they care about. I think about this as a simple flywheel that drives the growth of Snapchat. Sharing starts conversations, conversations strengthen friendships and stronger friendships lead to more sharing and creativity. Spotlight is becoming a more important part of that flywheel. In the United States, the number of people posting to Spotlight grew more than 115% year-over-year, while Spotlight daily active users grew more than 20%. This growth was supported by our investment in creators and AI-powered recommendations. We also saw improving momentum in our advertising business. After several quarters of improving our ad products and go-to-market approach, we saw better momentum with large advertisers in North America and stronger revenue growth internationally. World Cup-related spending contributed during the quarter alongside continued strength among small- and medium-sized businesses. Smart Campaign Solutions, our suite of AI-powered automation and optimization tools, is making it easier for advertisers to achieve better outcomes with less manual work. Those outcomes continue to improve. For app advertisers, cost per install declined 8% year-over-year. Cost per purchase declined 18% and app purchase volume increased 128%. Greater adoption by retailers also drove 43% growth in dynamic product ads revenue. Advertisers increased spending across native services such as sponsored Snaps, where roughly 1/3 of the Snapchatters reached were incremental to other services on Snapchat. These results reflect the progress we are making across automation, optimization, measurement and attribution. Our audience in the United States continues to broaden quarter-over-quarter, led by people aged 35 and older. That is increasing our relevance in categories such as automotive, health care, home goods, financial services, insurance and business-to-business services, while helping us diversify our advertiser base. An independent third-party study from Measured also found that for the brands in their portfolio, Snapchat delivered approximately 19.3% higher incremental return on ad spend than the blended incremental return from their social advertising overall. Taken together, these results give us confidence that advertisers are seeing more value on Snapchat and increasing their investment as we improve the platform across the full funnel. We have also built a meaningful second revenue stream. Snapchat+, Memory Storage and Lens+ helped drive 85% year-over-year growth in other revenue to $316 million in Q2. Less than 3% of our monthly active users are paying subscribers, and we see substantial room to grow direct revenue over time through premium features, AI-powered creative tools and additional subscription products. AI is transforming Snapchat and the way Snap operates. It powers better recommendations, more automated and performant advertising campaigns and new creative tools for our community. Internally, it is helping our smaller, more focused team move faster and accomplish more. In Q2, code commits per engineer increased 75% year-over-year, while major reliability issues declined 57%. Our internal AI code reviewer now reviews 90% of pull requests across Snap and has saved an estimated 30,000 hours of code review time. Our AI-powered support agent answers approximately 3.9 million questions from Snapchatters each month and has reduced support ticket volume by approximately 62% since the start of the year. In advertising, AI increased first pass image review automation from 40% in Q2 2025 to nearly 90% in Q2 2026, resulting in faster approvals for advertisers, stronger content safety and lower operating costs. In addition to leveraging AI to improve how we operate today, we are building toward the future of computing with Specs. I believe AI will fundamentally change our relationship with computers. We'll spend less time operating them and more time supervising intelligent systems that understand context and complete work on our behalf. Specs are built for that future. Unveiling Specs in June was an important milestone after more than a decade of work. Specs are a new kind of computer built into see-through glasses, more capable than today's limited AI glasses and more wearable than bulky VR headsets. Specs can understand the world around you and help with work, learning, entertainment and shared experiences without pulling you away from the real world. We are excited to share much more about how Specs work and what they can do at our launch event in Los Angeles on September 16. I'll now hand it over to our Chief Financial Officer, Doug Hott, to discuss our financial results and outlook. Doug Hott: Thank you, Evan. In Q2, revenue increased 19% year-over-year to $1.6 billion, including 9% growth in advertising revenue. This growth reflected progress with large advertisers in North America, broader adoption of our AI-powered smart campaign solutions, continued SMB momentum and 85% growth in other revenue, led by Snapchat+, Memory Storage and our Lens+ subscription. In early Q2, we restructured our cost base so Snap can scale more efficiently, and those changes are increasingly visible in our results. Our total adjusted cost structure increased just 4% year-over-year as operating efficiencies offset investments in long-term revenue drivers. Gross margin expanded 7 percentage points year-over-year to 58%. Net loss improved by $99 million to $164 million, and adjusted EBITDA increased by $208 million year-over-year to $250 million. Our focus is to sustain this operating leverage by maintaining disciplined cost growth as we scale revenue, expand margins and increase free cash flow. That operating leverage translates into stronger cash generation. In Q2, operating cash flow was $176 million and free cash flow was $121 million. Over the past 12 months, operating cash flow reached $919 million and free cash flow reached $706 million. We have now generated positive free cash flow for eight consecutive quarters, while limiting fully diluted share count growth to approximately 2% over the past 5 years through our share repurchase program. Over that period, we repaid more than $2 billion of convertible notes due in 2027 and 2028 as well as the $47 million in convertible notes that were due in August 2026, reducing future debt obligations and strengthening our balance sheet. We ended Q2 with approximately $2.7 billion in cash and marketable securities, giving us the capacity to invest in our core business and long-term opportunities while maintaining a healthy cash balance. Our planned investment in Specs is included within our existing operating expense outlook. Over time, we intend to pace that investment based on product, ecosystem and economic milestones while preserving the improving profitability and cash generation of our core business and supporting a stable share count. Going forward, our financial objective is free cash flow per share. We believe this is the right objective because it connects operating performance, disciplined capital allocation and long-term shareholder value creation. Our goal is to generate enough free cash flow to invest in Snap's long-term potential, offset stock-based compensation dilution and strengthen our balance sheet. We support these objectives by growing revenue faster than costs, investing with discipline and using our share repurchase program to offset dilution and compound per share value. As we move into Q3, we remain focused on accelerating top line growth, growing our community, deepening engagement, improving financial efficiency and advancing towards the commercial launch of Specs later this fall. Our guidance range for Q3 revenue is $1.70 billion to $1.74 billion. We expect infrastructure costs to grow modestly year-over-year in Q3 and now anticipate full year infrastructure costs of $1.65 billion to $1.70 billion, compared with our prior guidance of $1.60 billion to $1.65 billion. The increase primarily reflects additional investment in the AI and machine learning infrastructure needed to support revenue growth. We continue to expect all other cost of revenue, excluding infrastructure costs, to represent 16% to 17% of revenue for the full year. We also continue to expect full year adjusted operating expenses of approximately $2.75 billion and stock-based compensation of approximately $1.05 billion. The personnel cost savings associated with our recently announced restructuring are expected to be more fully reflected in Q3 and beyond. As a result, we estimate that adjusted EBITDA will be between $300 million and $350 million in Q3. Following the expected completion of our current repurchase program in Q4, we expect to implement a new multiyear dilution management program designed to help offset future dilution and support a stable fully diluted share count in 2027. The program will be funded primarily through free cash flow while maintaining a healthy cash balance and continuing to invest in our long-term growth. Looking beyond 2026, we believe the stronger near-term outlook reflects durable improvements in the business. We expect direct revenue to continue growing materially faster than the overall business while maintaining disciplined growth in our non-GAAP operating expense base over the medium term. As we scale, the financial benefits of these trends should become increasingly meaningful with continued gross margin improvement supporting further adjusted EBITDA margin expansion and sustained positive net income beginning in 2027. Lastly, we continue to monitor the evolving legal and regulatory landscape in the United States and internationally that could materially impact our business and financial results, including increased regulatory scrutiny on youth-related issues and several trials scheduled in the United States later this year. While outcomes remain uncertain, they may result in significant changes to our products and business practices, increased compliance requirements and legal costs, increased payments for legal judgments and settlements and negative impacts to user growth and engagement. Thank you, and we will now take your questions. Operator: [Operator Instructions] Your first question comes from the line of Doug Anmuth with JPMorgan. Douglas Anmuth: It seems like you think 2Q was the quarter where you're seeing the work of the last few years paying off. I just wanted to kind of hear more about what gives you the confidence that this kind of growth and performance is really durable going forward? Evan Spiegel: Doug, thanks for the question. The improvement in Q2 really reflects progress across both the advertising platform and the go-to-market execution, which is something we've really been working hard on. We're delivering stronger performance, especially for app, e-commerce and other lower funnel advertisers, and we're making campaigns easier to manage with better automation, optimization, measurement and attribution. One of the things I'm particularly excited about is that all these improvements resulted in a 56% year-over-year increase in conversions across the platform, including app and pixel purchase goals. And we also saw increased spending from existing advertisers alongside broader adoption of newer formats like sponsored Snaps and our smart campaign solutions. So we know we still have more work to do, but the breadth of the improvement here is what gives us confidence that it's being supported by stronger fundamentals. Operator: Your next question comes from the line of Ross Sandler with Barclays. Ross Sandler: So there was some language in the letter about Specs and the launch date and your kind of planned pacing of investment. So could you just elaborate a little bit on what we should expect in the second half and into '27 for Specs investment? And then is the idea of setting up Specs as a company outside of Snapchat off the table? Or is that still something that you guys would consider in the future? Evan Spiegel: Ross, thanks for the question. I think big picture, what we were really trying to outline was that given the real inflection in free cash flow generation in the business that we have the ability to simultaneously invest in the future of Specs, offset dilution, and strengthen our balance sheet. So as we look at Specs specifically, we're very focused right now on product quality, on the customer experience and really the ecosystem development. And we've gotten some great feedback from developers and businesses after the announcement at AWE in June. I think looking forward, on September 16, we'll be sharing a lot more about all the different ways people can use Specs, how they fit into people's lives. And we're just really excited to get Specs into folks' hands later this year. Operator: Your next question comes from the line of Dan Salmon with New Street Research. Daniel Salmon: Evan, I'd just like to hear a little bit more on the North America DAU outlook for the rest of the year after it stabilized at 92 million this quarter. You mentioned more usership -- healthier usership in the 35 and older age group in the letter. Could you expand on that? And maybe also give us a little color on users under 35 and whether that figure grew sequentially this quarter. Evan Spiegel: Thanks, Dan. Yes, we're definitely encouraged by the stabilization in North America DAU on a quarter-over-quarter basis. And we made some progress in strengthening the core communication experience and also giving Snapchatters more reasons to engage with Spotlight and the Snap Map and augmented reality. I would say, in particular, Spotlight is becoming a more important part of that flywheel. So in the United States, the number of people posting grew more than 115% year-over-year and daily active viewers of Spotlight increased by more than 20%. So I think going forward, we're just very focused on improving activation, retention and engagement. I would say we are closely monitoring the regulatory environment, including age assurance, privacy and online safety requirements, which may affect the product experiences or user growth and engagement over time. Operator: Your next question comes from the line of Rich Greenfield with LightShed Partners. Richard Greenfield: First of all, thanks for the shorter prepared remarks. That was really helpful. I appreciate getting questions quickly. Evan, it's been like 7 weeks since you started taking preorders for Specs. Any sense of -- you could give us any sense of like what preorder volumes look like and what that's telling you about demand heading into the launch event in September. And then two, Doug, you called out in the prepared remarks that there was a Q2 tailwind from the World Cup as well as the large advertiser performance. I would assume the World Cup is carried over at least a little bit into Q3, but any commentary on sort of -- could you size for us like what the World Cup means? And obviously, you did more -- your revenue growth in Q2 was faster than your guide for Q3. Is that the difference is not having the World Cup or just less World Cup? Just trying to understand what the organic number might look like from that change or that improvement in the large advertiser number that you called out. Evan Spiegel: Rich, thanks so much for the question. Yes, on Specs, we've been overwhelmed at the extent to which I think our announcement really broke through. And there's just a huge amount of interest. What we're hearing from folks is really that they want to try Specs. It's obviously a high consideration purchase at $2,195. And obviously, developers and folks who are familiar with the platform really understand it and understand the technical leaps we've made with this generation. I think for the broader public and consumers, it's going to be really important for folks to go hands-on. I think September 16, our upcoming launch event will be an important sort of starting point for that consumer-oriented journey. So certainly, a lot of exciting momentum around Specs, and we're really looking forward to getting these in folks' hands and really so that they can experience the platform for themselves. Doug Hott: This is Doug. Let me take the second part of your question. Yes, definitely, the World Cup provided a benefit during the quarter, but it wasn't the only improvement we saw -- our guidance reflects the expected normalization of World Cup-related spending and a more difficult year-over-year comparison in Q3 following the easier comps we had in Q2 as our ad platform stabilized last year at the end of Q2 2025. In Q2 this year, we continue to see constructive trends across the platform, including large advertiser momentum in North America, strength among the small and medium business -- small-sized businesses and really the broader adoption of our smart campaign solutions and the lower funnel products like app purchase and dynamic product ads really added to our overall year-over-year growth. So we're very pleased by that. Operator: Your next question comes from the line of Michael Nathanson with MoffettNathanson. Michael Nathanson: Can I just double-click back on Specs for a second? I guess going to Ross' question, I understand why you're doing it, but the question, I think, is the financial sense of why this will work for a company your size. So walk us through why financially the structure you have here makes sense versus working with a partner? And then what gives you confidence given that Apple, Meta, Alphabet are all trying to build over time competitive products, what gives you the confidence that you actually can win at this game versus some bigger resource companies? Evan Spiegel: Michael, thanks so much for the question. I think what is very clear to us is that the long-term opportunity to develop the next computing platform is absolutely enormous. If you look at what laptops and desktops did to desk jobs, the transformations in productivity and what that enabled for the world over the last couple of decades has just been extraordinary. And I think what's so unique about Specs is that they bring computing to the real world to real-world jobs and allow you to work hands-free with AI assistance and really the incredible power of computing in the world around you. And I think that opportunity is just enormous, even at single-digit percentages of smartphone volumes. I think what some folks maybe don't understand yet, especially because Specs are so new and we're really the first mover in this category is how difficult the product is to execute from a technical perspective, which is why that full stack integration, everything from our developer platform and tools to our Lens Core rendering engine to our operating system to the optical engine itself, all of those things have to work perfectly together to deliver the customer experience that we've provided with Specs. And I think one thing that's a bit different this time around, when we started innovating in the social space, we were a late entrant. So most of the apps at the time, whether it was Facebook or Instagram or Twitter, were already in existence, and we had to really innovate to continue to grow. And obviously, now we're approaching 1 billion monthly active users. What's so unique about this opportunity for us is really that we're a first mover, and that really placed to our strengths as an innovator. It's why we've been able to lead in this category and leverage our incredible augmented reality platform to win over the long term. Operator: Your next question comes from the line of James Heaney with Jefferies. James Heaney: Could you just talk about what's driving the decision to raise the full year infrastructure cost outlook? Just how should we be thinking about the return on that investment, particularly as it relates to the direct response kind of lower funnel advertising business? I appreciate it. Doug Hott: Thanks, James. Yes, this is Doug. Look, I think this is an opportunity for us as we've seen the advertising revenue growth over this quarter and our guide for Q3. One of the things that we want to make sure that we're doing is continue to invest in our -- especially our DR and our ad platform in general. And so this gives us a little bit of flexibility to make those investments as we see fit through the back half of the year. It doesn't mean we'll have to do that, but we wanted to make sure that we gave full year guidance to reflect the opportunity that we could make those investments and really drive those meaningful short- and medium- and long-term investments in our ad platform. Operator: Your next question comes from the line of Mark Shmulik with Bernstein. Mark Shmulik: Doug, both you and Evan kind of mentioned prioritizing free cash flow per share in kind of the prepared remarks. And just kind of wondering what's different kind of as you've kind of ramped up in the seat? And kind of how is your philosophy evolving and you're deploying it across the organization? And if there's any kind of colorful examples in the early days of kind of things you've done around restructuring the cost base would be very helpful. Doug Hott: Thank you, Mark. Appreciate it. Yes, I mean, I think really free cash flow per share connects to three things that we believe are really essential to our long-term shareholder value. So number one, improving the operating performance of the business; number two, investing our capital with discipline and lastly, managing our dilution. Our first priority is really to grow free cash flow, if you think about the numerator of this, and we really want to grow revenue faster than cost. And if you think about what we did in Q2, we grew revenue 19% year-over-year, and we only grew costs 4%. And that's we're really proud of that, and I think it comes a lot from the restructuring that we did at the beginning of the quarter and can continue forward as we look to continue to drive that flow-through. Then after that flow-through to cash, we want to allocate that cash in a really balanced way. So investing in our highest return opportunities, maintaining a healthy cash balance and strengthening the balance sheet. And then finally, repurchasing shares to help offset that dilution. As Evan mentioned in his prepared remarks, following the expected completion of our current authorization in Q4, we expect to implement a multiyear program beginning in 2027. And I expect that any new program will be funded primarily through free cash flow and designed to support our stable share count over time. Operator: Your next question comes from the line of Eric Sheridan with Goldman Sachs. Eric Sheridan: Maybe broadening out the conversation on monetization, just understand better how you're thinking about the evolution of the mix of revenue in the business and some of the signals you're getting from Snap+ as a subscription? And how do you even think about Specs as an opportunity both across hardware and subscriptions to possibly also diversify the revenue stream as you look out not just through the end of this year, but out over 2027 and beyond. Evan Spiegel: Eric, thanks so much for the question. I think big picture, it's really exciting that we're becoming a multi-engine revenue business here. I think that does expand the total opportunity for us overall. And I think it also provides a lot more resilience, frankly, as we look at our long-term growth. I think one of the real bright spots for us has been other revenue growing 85% year-over-year. That's been primarily driven by Snapchat+, memory storage and then a new subscription product we have called Lens+, which is really connected to new AI creative tools. And that's sort of at a higher price point for our community. So we've seen some really nice and exciting growth there, and we believe that continuing to develop new premium features and creative tools will drive growth into the future. I think, as I noted in my remarks, less than 3% of our monthly active users are paying subscribers today. So we do think there's substantial room to increase penetration over time. Looking to Specs as well, that is a longer opportunity -- longer-term opportunity for us, but it is absolutely massive if we can really help people make this shift to computing based on screens -- from computing based on screens to computing in the real world. Operator: Your next question comes from the line of Shweta Khajuria with Wolfe Research. Shweta Khajuria: I had one on subscribers. So in the letter and in your prepared remarks, you mentioned less than 3% of MAUs is where you are at. Could you please talk about how you view the runway for that 3% to grow? And where do you think that could grow to, call it, in the near to midterm? And what kind of opportunity you see there? And what gets you there? What are some of the drivers that you feel confident gets you to that penetration level? Evan Spiegel: Yes. Thanks so much for the question. It's still early days for us on the subscription products. So it's hard to say specifically. One of the things we did do is just take a look across the industry and other app-based subscription products. And it seems like penetration is typically around 7% to, let's call it, 12% over the long term. So I do think if we just look across the competitive set, there is certainly headroom to continue growing subscribers from here. I think what we've seen work historically is just continuing to add value to our subscription products. And I think Lens+ is going to be an exciting new driver of growth for us there as it allows us to expand into some really powerful AI tools that people have really demonstrated a willingness to pay for. Operator: Our last question comes from the line of Lloyd Walmsley with... Lloyd Walmsley: Two, if I can. First one, maybe for Evan. Can you just help us understand how you think about the trade-off between growing the profitability and free cash flow of the company overall and then investing in the future of Specs? And sort of are there any guardrails to think about in terms of how much you might invest -- and sort of any sense for how the product road map looks in terms of when we might really get to see a broader mass market product market fit? And then I guess the second one, shareholder letter talked about just the strong incremental reach in sponsored Snaps. So wondering if you can give us an update on like how meaningful is that ad unit today in the ad mix? And sort of how could that become a significantly larger portion of the ad mix over time? Anything you could share there would be great. Evan Spiegel: Thanks so much for the question. As I mentioned, I do think that the real inflection in free cash flow generation is going to allow us to invest in Specs and offset dilution while simultaneously strengthening our balance sheet. I think Specs are just so important because they support our mission of making computing more human. And we really believe that this next generation of computers is going to be more contextual, more intelligent and far less dependent on people operating screens. And I think really that see-through glasses are a natural form factor for the future because they allow technology to understand the world around you and assist you without pulling you away from it. I think right now, we are really approaching this investment with a lot of discipline. And as I mentioned, in the near term, our focus really is on that the customer experience, the product quality and the ecosystem development. I think it will be towards the end of the decade before we see mass market consumer adoption. And I think things, for example, like weight and costs are going to have to come down to see unit volumes really meaningfully pick up. But we do have, I think, a real advantage here in that developers have been building on the Specs platform now for several years. They're very familiar with our tools, and we're just so excited to share more on September 16 when folks can see all the amazing experiences that are possible with Specs. Operator: This concludes our question-and-answer session as well as Snap Inc.'s Second Quarter 2026 Earnings Conference Call. Thank you for attending today's session. You may now disconnect. Before you buy stock in Snap, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Snap wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. 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Snap (SNAP) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

(Bloomberg) -- SpaceX’s first earnings report following its blockbuster initial public offering is one of the most anticipated events of the summer on Wall Street. Whether it’ll give investors a reason to buy the sinking stock is another matter. Most Read from Bloomberg Beer Dynasty Families Sell €731 Million Stake in AB InBev Apple’s New CEO Taps Retired Hardware Executive for Management Team Taco Bell Met With Michigan on Parasite Weeks Before Recall Mamdani Dismisses Business Leaders Advising NYC’s Mayor’s Fund S&P 500 Closes Near Record High on US-Iran Hopes: Markets Wrap Elon Musk’s satellite, space and artificial intelligence company went public at $135 in June, and the shares have been on a roller coaster ride ever since, shooting up to $225 in the first days of trading and then plunging below the offering price. They closed Monday at $114.53, down 15% from the IPO and 49% from their high on June 16, erasing more than $1 trillion in market value from that peak. Earnings will give investors a chance to reassess the stock. The problem is SpaceX isn’t profitable and has a very speculative business at this point, so the results may end up raising more questions than they answer. With the shares still trading at a sky-high valuation despite the selloff, it will be difficult to entice new buyers. “There is so much that’s in the future of the SpaceX story, so much that hasn’t been done yet, or ever, so there’s nothing to make you comfortable,” said Drew Cupps, portfolio manager and head of the 5Perspectives Growth Team investment group at Polen Capital, which owns a small position in the company. “There’s not a lot of here and now. There’s no, look at last year to justify what you should pay now.” To make matters even more challenging for the stock, a flood of fresh SpaceX shares also is about to hit the market, as the first of many lockups that ban early investors from selling expires two days after the earnings report. As many as 911.5 million SpaceX shares worth more than $100 billion will be released on Aug. 6. And that’s just the start as billions of additional shares will be eligible for trading before the end of the year. All of which will weigh on the stock price simply based on the market’s supply and demand function. “It’s a total mess,” said Ken Mahoney, chief executive officer of Mahoney Asset Management. Wall Street expects SpaceX to report a loss of 24 cents per share in the second quarter on $6.8 billion of revenue. The results have been somewhat of a moving target, however, because so little information about the business is available. Analysts have widened their estimates for the company’s loss by 18% in the past month. “I have very little confidence in those estimates,” said Jim Lebenthal, chief market strategist at Cerity Partners. “I don’t mean this obnoxiously, but I think they’re mostly licking their fingers and sticking it in the wind.” What investors and analysts will primarily be looking for is management’s comments on the company’s progress with AI, Starlink and its rocket launch business. “We don’t have concrete earnings power that would be analogous to other parts of the market, but we do have a visionary set of massively capable assets that are in some cases unrivaled over all others,” said Polen Capital’s Cupps. SpaceX’s results come on the heels of a strong run of earnings reports from big AI spenders, including Alphabet Inc., Microsoft Corp. and Amazon.com Inc. Investors are particularly rewarding companies that are showing clear payoffs from their capital expenditures. For example, shares of Amazon and Microsoft surged following the companies’ results. With a market capitalization of roughly $1.5 trillion, SpaceX rivals the size of many megacap tech firms and is bigger than Musk’s other company, Tesla Inc. But its financials aren’t close, at least not yet, meaning investors may apply additional scrutiny to its spending plans. Analysts expect the company to report capital expenditures of $18.5 billion in the quarter and $45.5 billion for 2026. The primary issue facing SpaceX shares is their extreme market valuation. The stock trades at about 448 times earnings estimated over the next 12 months, the highest multiple of any member of the Nasdaq 100 Index, and 26 times estimated sales, which is among the 10 highest ratios in the technology-heavy benchmark. That helps explain why the short interest in SpaceX, which measures bearish bets against the stock, jumped to 34% of the company’s float, or the number shares available to trade in the market, from about 18% a month ago, according to data from S3 Partners. There are already more short bets against SpaceX than there are against Tesla. Still, Wall Street remains overwhelmingly bullish on the stock. Of the 39 analysts tracked by Bloomberg who cover the company, 30 have buy ratings. And few have backtracked on their extravagant predictions from when SpaceX went public. Raymond James analyst Brian Gesuale is sticking with his call for the shares to reach $800 within the next 12 months on exponential revenue growth. Adam Jonas at Morgan Stanley recently reiterated his $300 price target and said that shares trading at $100 values the company’s AI business at zero, making this an attractive entry point for investors. And Bernstein’s Douglas Harned is urging investors to ignore the specifics of the earnings report and focus instead on the company’s confidence in the future. “We believe the quarterly results should not matter,” Bernstein analysts led by Harned wrote in a note to clients on Friday. “What will be important is the level of confidence projected by management regarding the company’s growth path. Investors should look beyond short term stock movements as we view the case for a multi-trillion dollar valuation is about ‘if’ not ‘when’, for orbital data center plans.” Tech Chart of the Day Amazon.com Inc. surpassed $3 trillion in market value for the first time, becoming only the fifth company to ever reach the milestone. Top Tech Stories Palantir Technologies Inc. raised revenue and income forecasts for the full year after posting second-quarter sales that far exceeded Wall Street’s estimates, describing commercial demand for its data analytics tools as “otherworldly.” Snap Inc. posted higher-than-projected quarterly sales and gave an upbeat forecast for the current period, signaling optimism ahead of the September commercial debut of its first pair of augmented reality glasses. Grab Holdings Ltd. raised its annual earnings and sales forecasts, a sign that robust demand from Southeast Asian commuters is helping to absorb impact of higher fuel prices stemming from the Middle East conflict. Apple Inc. briefly removed the Telegram messaging app from its App Store after finding content on the platform that violated a ban on child sexual abuse material. China is growing anxious that Anthropic PBC’s Mythos could be wielded against the world’s second-biggest economy, adding a volatile new issue to already heightened tensions before a planned summit between Xi Jinping and Donald Trump. Earnings Due Earnings Premarket: Earnings Postmarket: --With assistance from Subrat Patnaik and David Watkins. Most Read from Bloomberg Businessweek Americans Are Rethinking Their Love Affair With Plant Milks A Wall Street Troll Reinvented Himself as the Groypers’ Pick for Governor. The GOP Can’t Get Rid of Him Trump’s Arctic Mining Deal Signals a New Era of State Capitalism Tokenmaxxing Is Dead. Now Comes the Belt Tightening Why Wall Street Is Getting Angry ©2026 Bloomberg L.P.

Interested in Snap Inc.? Here are five stocks we like better. Snap’s second-quarter revenue rose 19% to $1.6 billion, supported by a 9% increase in advertising revenue and an 85% surge in subscription-related revenue. Monthly active users reached 971 million, while daily active users totaled 493 million. Profitability and cash generation improved, with adjusted EBITDA rising to $250 million and free cash flow reaching $121 million; Snap has now generated positive free cash flow for eight consecutive quarters. The company will prioritize free cash flow per share in capital allocation and plans additional dilution-management efforts beginning in 2027. Snap guided for third-quarter revenue of $1.70 billion to $1.74 billion and adjusted EBITDA of $300 million to $350 million, while continuing to invest in AI infrastructure and its Spectacles platform. Management expects direct revenue to outpace overall growth, but warned that regulatory scrutiny and the normalization of World Cup-related advertising could affect results. SpaceX IPO: Opportunity? Or the Ultimate Hype Trade? Snap (NYSE:SNAP) reported second-quarter revenue growth of 19% as the company cited improving advertising performance, rapid expansion in subscription-related revenue and increased cash generation. The company also said it is shifting its primary financial objective toward free cash flow per share while continuing to invest in its Spectacles computing platform. Revenue rose to $1.6 billion in the second quarter, while advertising revenue increased 9% to $1.28 billion. Other revenue climbed 85% to $316 million, driven by Snapchat+, Memories Storage and the Lens+ subscription offering. Monthly active users reached 971 million and daily active users totaled 493 million. → Lost in Space: Why Aerospace Valuations Are Plummeting Right Now MarketBeat Week in Review – 10/20 - 10/24 Chief Executive Officer and Co-Founder Evan Spiegel said Snapchat is approaching 1 billion monthly users and that the company’s work to rebuild its monetization platform and improve its go-to-market strategy is producing stronger results. He said Snap is focused on converting that scale into durable growth, margin expansion and cash generation. Snap reported a gross margin of 58%, up seven percentage points from a year earlier. Net loss improved by $99 million to $164 million, while adjusted EBITDA increased by $208 million year over year to $250 million. → MarketBeat Week in Review – 07/27- 07/31 2 Tech Stock Bargains Offering Buy the Dip Opportunities Operating cash flow was $176 million and free cash flow was $121 million during the quarter. Over the past 12 months, Snap generated $919 million of operating cash flow and $706 million of free cash flow. Chief Financial Officer Doug Hott said the company has now produced positive free cash flow for eight straight quarters. Hott said Snap’s adjusted cost structure increased 4% year over year, compared with 19% revenue growth, as operating efficiencies helped offset investments in long-term growth initiatives. He also said the company’s early-quarter restructuring is expected to have a greater effect on personnel costs beginning in the third quarter. → GE HealthCare Stock Climbs on Vital Diagnostics Demand The company ended the quarter with approximately $2.7 billion in cash and marketable securities. Hott said Snap has repaid more than $2 billion of convertible notes due in 2027 and 2028, along with $47 million of notes due in August 2026. Going forward, Hott said free cash flow per share will guide capital allocation decisions. The company aims to grow revenue faster than costs, invest in higher-return opportunities, maintain a healthy cash balance and use share repurchases to offset dilution. Following completion of its current repurchase authorization, which is expected in the fourth quarter, Snap plans to introduce a new multiyear dilution-management program beginning in 2027. Management attributed advertising progress to stronger results among large North American advertisers, continued small- and medium-sized business momentum and wider use of Smart Campaigns, Snap’s AI-powered automation and optimization tools. Spiegel said app advertisers saw cost per install decline 8% year over year and cost per purchase fall 18%, while app purchase volume rose 128%. Dynamic product ads revenue increased 43%, supported by greater adoption from retailers. Hott added during the question-and-answer session that conversions across the platform rose 56% year over year, including app and pixel purchase goals. Sponsored Snaps also contributed to advertiser adoption. Spiegel said roughly one-third of Snapchatters reached through Sponsored Snaps were incremental to other services on Snapchat. Snap said World Cup-related advertising spending benefited second-quarter results. Hott said third-quarter guidance reflects the expected normalization of that spending as well as more difficult year-over-year comparisons after the advertising platform began stabilizing in late second-quarter 2025. AI is also being used internally to improve productivity and lower costs, according to Spiegel. Code commits per engineer increased 75% year over year in the second quarter, while major reliability issues declined 57%. Snap’s internal AI code reviewer reviewed 90% of pull requests and saved an estimated 30,000 hours of code-review time, he said. The company’s AI-powered support agent answers approximately 3.9 million questions from users each month and has reduced support-ticket volume by about 62% since the start of the year. In advertising, first-pass image-review automation increased from 40% in the second quarter of 2025 to nearly 90% in the latest quarter. Snap said direct revenue remains a significant growth opportunity, with fewer than 3% of monthly active users currently paying for subscriptions. Spiegel said the company sees room to increase penetration through premium features, AI-powered creative tools and additional subscription products. When asked about the longer-term opportunity, Spiegel said app-based subscription products across the industry generally appear to reach penetration rates of roughly 7% to 12%. He said continued product value additions and Lens+, which provides access to AI creative tools at a higher price point, could support subscriber growth. The company also cited growing engagement with Spotlight. In the U.S., the number of people posting to Spotlight increased more than 115% year over year, while Spotlight daily active users grew more than 20%. Spiegel said Snap remains focused on improving activation, retention and engagement, particularly through core communication features, Spotlight, Snap Map and augmented reality. North American daily active users stabilized sequentially at 92 million. Spiegel said Snap’s U.S. audience has broadened, particularly among users aged 35 and older, increasing the platform’s relevance to advertisers in automotive, healthcare, home goods, financial services, insurance and business-to-business categories. Snap is continuing to develop Spectacles, its see-through glasses platform designed to support AI-assisted computing in the real world. Spiegel said the company plans to provide more details at a Sept. 16 launch event in Los Angeles and expects to get the product into users’ hands later this year. Spiegel said pre-launch interest has been strong, though he characterized Spectacles as a high-consideration purchase at $2,195. He said broad consumer adoption is likely to occur closer to the end of the decade, when factors such as product weight and cost improve. Hott said planned investment in Specs is included in Snap’s existing operating-expense outlook and will be paced based on product, ecosystem and economic milestones. The company intends to preserve improving core profitability and cash generation while funding the initiative. Third-quarter revenue guidance: $1.70 billion to $1.74 billion. Third-quarter adjusted EBITDA guidance: $300 million to $350 million. Full-year infrastructure-cost outlook: $1.65 billion to $1.70 billion, up from prior guidance of $1.60 billion to $1.65 billion. Full-year adjusted operating-expense outlook: approximately $2.75 billion. Full-year stock-based compensation outlook: approximately $1.05 billion. Hott said the higher infrastructure outlook primarily reflects potential additional investment in AI and machine-learning infrastructure to support revenue growth, particularly in direct-response advertising. He also said Snap expects direct revenue to continue growing materially faster than the overall business and anticipates sustained positive net income beginning in 2027. The company noted that evolving legal and regulatory conditions, including youth-related scrutiny and several U.S. trials scheduled later this year, could materially affect its operations, costs, products, user growth and engagement. Snap Inc is a camera and social media company best known for developing and operating Snapchat, a multimedia messaging application that allows users to send photos, videos and messages that disappear after being viewed. In addition to its core messaging service, Snap offers a suite of augmented reality (AR) tools, including custom Lenses and Filters, that enable users and third-party developers to create interactive and immersive experiences. The company also provides advertising solutions that allow brands to engage audiences through Snap Ads, Sponsored Lenses and Discover content on the platform. Founded in 2011 by Evan Spiegel and Bobby Murphy, Snap has continually focused on innovation in camera technology and AR. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Snap Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.