Snap's Q2 Shock: Record Revenue Growth Can't Stop Massive Sell-Off

Aug 6 - Snap SNAP shares plunged over 14% in after-hours trading Tuesday after Q2 results showed engagement trends shifting, raising concerns despite solid revenue growth.

CEO Evan Spiegel pointed to a change in how users interact on Snapchat. Instead of posting stories, users are now more inclined to share Spotlight content and start conversations. That shift is changing the platform's core usage in its largest market, the U.S., where engagement metrics are flattening.

North American Monthly Active Users remained flat at 159 million, and Daily Active Users dipped slightly. However, Snap still grew its global user base to 932 million monthly and 469 million daily users, marking 7% and 9% YoY growth, respectively.

Despite slowing engagement in its most lucrative region, Snap continues to expand revenue from Snapchat+, its subscription service. That tier hit a $700 million annual run rate, up 64% YoY.

Revenue for Q2 came in at $1.345 billion, narrowly beating estimates. But the market reacted to stagnation in user engagement and lack of growth in North America. Analysts remain mixed, with a consensus target of $11.47.