Snap Inc. Oh Snap! We Are Initiating at Neutral

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Snap Inc. Oh Snap! We Are Initiating at Neutral

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

27 July 2026

Neutral

Snap Inc. SNAP

Oh Snap! We Are Initiating at Neutral Moody's:S&P: B1BB- Outlook:Outlook: POSPOS

The above agency ratings are at the corporate level

North America Corporate Credit -

• Initiating coverage of SNAP at Neutral. The business faces long-term Technology and Telecommunication

threats: competition, obsolescence and regulation. But we can’t become bears Services (HY)

just yet as ample cash generation bolsters the balance sheet, giving the business AC Thomas Egan, CFA

options to counteract incoming headwinds. (1-212) 270-2149

• Competition and obsolescence risks aren’t new. Still, these challenges have thomas.j.egan@jpmorgan.com

been felt acutely in the past year, exacerbated by customers’ tighter marketing Natalie Bilyew-Conn

budgets and competition around new, expensive augmented reality initiatives (1-212) 270-7734

(ex. SNAP specs vs. Meta glasses). natalie.bilyew-conn@jpmorgan.com

J.P. Morgan Securities LLC

• Regulatory scrutiny is intensifying. Governmental oversight of social media

platforms is becoming a headache for SNAP and its social media

counterparties. The allegations towards these platforms range from facilitating

illegal transactions to mental health detriments to children, and the

punishments and controls range from fines to age-bans for social media

participation. These challenges are felt more acutely at SNAP, which has a

younger-leaning cohort and less disposable cash to fight litigation than its IG

counterparts.

• But cash generation is meaningful. Less cash doesn’t mean no cash. Like

other software names, SNAP is a capital-light business, driving impressive

cash flows.