Snap Inc.: Signs of Improving Execution With Focus on Profit & FCF/Share; Proving Durability Still Key; Remain UW w/ $6 PT

Research evidence excerpt

Snap Inc.: Signs of Improving Execution With Focus on Profit & FCF/Share; Proving Durability Still Key; Remain UW w/ $6 PT

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

04 August 2026

Snap Inc.

Signs of Improving Execution With Focus on Profit & Underweight

FCF/Share; Proving Durability Still Key; Remain UW w/ SNAP, SNAP US

$6 PT Price (03 Aug 26):$5.04

Price Target (Dec-27):$6.00

Snap shares traded up +7% post-close as ongoing efforts to improve Internet - Large Cap / Mid & Small

monetization & scale profitability are beginning to pay off. Snap is seeing better Cap

momentum with large N. America advertisers as a result of ad platform Doug Anmuth AC

enhancements, while lower funnel & SMB traction remains strong. Roughly a year (1-212) 622-6571

after rolling out Sponsored Snaps inventory, Snap’s supply & demand dynamics douglas.anmuth@jpmorgan.com

have become more balanced & investments across AI & ML are driving better Margaret Hoffman

targeting & performance for advertisers. Direct revenue continues to be a bright (1-212) 622-1710

spot, +85% Y/Y in 2Q, and SNAP believes it can scale subscriber penetration from margaret.hoffman@jpmchase.com

<3% of MAUs today to 7%-12% over the long term, in-line with other app-based Daniel Pfeiffer

(1-212) 622-0161

subscription products. On profits, 2Q Adj. EBITDA exceeded the high end of daniel.pfeiffer@jpmchase.com

mgmt’s guide, & new CFO Doug Hott is focused on two key financial north stars: J.P. Morgan Securities LLC

1) Generating strong FCF/share through strong operating performance,

disciplined investments, & dilution management; & 2) Sustained positive net

income beginning in 2027, w/ongoing cost discipline supporting further margin Key Changes (FYE Dec)

expansion.