Snap Inc.: FCF Focus Bearing Fruit

Research evidence excerpt

Snap Inc.: FCF Focus Bearing Fruit

J P M O R G A N North America Credit Research

03 August 2026

Neutral

Snap Inc. SNAP

FCF Focus Bearing Fruit Moody's:S&P: B1BB- Outlook:Outlook: POSPOS

The above agency ratings are at the corporate level

North America Corporate Credit -

Snap posted strong sales and user growth that more than flowed through to the Technology and Telecommunication

bottom line as restructuring cost savings took hold. Services (HY)

• Strong quarter. Revenue was $1.60bn (+19% y/y), well above the $1.539bn Thomas Egan, CFA AC

estimate, with Advertising revenue up 9% y/y to $1.28bn (vs. $1.24bn est) and (1-212) 270-2149

thomas.j.egan@jpmorgan.com

Other revenue up 85% y/y to $316mn (vs. $304mn est), led by Snapchat+,

Natalie Bilyew-Conn

memory storage, and Lens+ subscriptions with less than 3% of Monthly Active

(1-212) 270-7734

Users paying subscribers (vs. 7-12% across the industry). Ad revenue strength natalie.bilyew-conn@jpmorgan.com

was driven by better GTM execution, making campaigns easier to manage, J.P. Morgan Securities LLC

broader adoption of new ad formats including sponsored Snaps, and a tailwind

from the World Cup together boosting spend from new and existing

advertisers. Daily Active Users (DAUs) of 493mn and MAUs of 971mn were

both better than the 488mn and 967mn, respectively, that analysts were

expecting. The quarter’s standout, though, was profitability and cash; EBITDA

totalled $250mn (16% margin +1,300bp y/y), comfortably ahead of the

$192mn consensus estimate, and FCF was $121mn versus the Street’s $10mn.

• Guidance in line. Next quarter’s guidance was in line, as higher midpoint

revenue of $1.72bn (vs. $1.701bn est) did not translate to the bottom line.

Specifically, management flagged higher infrastructure cost guidance (FY