Snap Restores North America Growth After a Stalled Quarter
Second-quarter revenue rose 19% to $1,599 million, faster than the 12% pace of the first quarter, as North America sales turned back up.
Snap Inc. (SNAP) posted a faster year-over-year revenue increase in the second quarter, reversing a slowdown that had marked the first quarter. Revenue rose 19% to $1,599 million, after 12% growth in the prior quarter. Constant-currency revenue rose 18%.
The acceleration was concentrated in North America, where revenue grew 15% to $943 million after a 2% increase in the first quarter. Europe revenue rose 33% to $354 million, slowing from 45% growth. Rest of World revenue grew 17% to $302 million.
Advertising, the larger of the two reportable lines, grew 9% to $1.28 billion. Other revenue, which includes direct monetization of the app, grew 85% to $316 million, after 87% growth to $285 million in the first quarter. Co-founder and Chief Executive Officer Evan Spiegel said advertising performance improved and the direct revenue business was growing rapidly.
Average revenue per user rose 13% to $3.25, accelerating from 7% growth in the first quarter. North America ARPU rose 23% to $10.26, after 10% growth. Europe ARPU rose 36% to $3.62. Rest of World ARPU rose 4% to $1.00. Daily active users reached 493 million, up 5% year-over-year, matching the first-quarter rate. Monthly active users reached 971 million, up 4%. North America DAU fell 7% to 92 million. Europe DAU fell 2% to 98 million. Rest of World DAU rose 12% to 303 million.
Spiegel said World Cup-related spending contributed during the quarter, alongside strength among small and medium-sized businesses. He said large advertisers in North America showed better momentum after several quarters of product and go-to-market work. For app advertisers, he said cost per install declined 8% year-over-year, cost per purchase declined 18%, and app purchase volume increased 128%. Dynamic Product Ads revenue grew 43%.
Gross margin reached 58%. Operating loss narrowed 34% year-over-year to $171 million, for an operating margin of -11%. Adjusted EBITDA rose 505% to $250 million, after 115% growth in the first quarter, for a 16% margin. Net loss narrowed 38% to $164 million, or $0.10 a share.
The company recorded $128.5 million of restructuring charges in the quarter, excluded from Adjusted EBITDA, primarily for cash severance, stock-based compensation, and other costs. Full-time employees fell to 4,723, down 9% year-over-year, after 6% growth in the first quarter. In April, Snap said organizational changes would impact about 1,000 team members and that it expected to reduce its annualized cost base by more than $500 million by the second half of 2026.
Operating cash flow rose 99% year-over-year to $176 million. Free cash flow rose 407% to $121 million. Common shares outstanding were 1,682 million as of June 30, 2026, unchanged from a year earlier. Cash, cash equivalents, and restricted cash ended the period at $960 million. The company spent $250 million on Class A share repurchases in the quarter.
Spiegel said the company’s primary financial objective going forward is free cash flow per share, and that Snapchat is approaching one billion monthly users. He said Snap is pursuing Specs, a see-through glasses product, from a stronger position in the core business. Snap will discuss third-quarter 2026 outlook on its earnings call and in an investor letter.