Snap Shares Drop 10% After Third Quarter Revenue Miss

Snap Inc. shares plunged more than 10% on Wednesday, Nov. 4, 2026, after the Snapchat parent company reported third-quarter revenue and daily active users below Wall Street expectations. Lower advertising spending from consumer packaged goods companies also weighed on sales, according to company executives.

Snap generated $1.72 billion in third-quarter revenue, falling short of the $1.73 billion analysts expected, according to LSEG. Global daily active users reached 495 million, compared with the 499 million forecast by StreetAccount.

Despite the shortfalls, the company delivered stronger-than-expected adjusted earnings. Earnings per share reached $0.19, exceeding the $0.16 analyst estimate, while adjusted earnings totaled $383 million against expectations of $337 million, according to StreetAccount.

Global average revenue per user, or ARPU, came in at $3.48, matching analyst expectations. Revenue increased 14% year over year, while net income reached $56 million, reversing a net loss of $104 million recorded in the same quarter a year earlier.

For the fourth quarter, Snap projected revenue between $1.95 billion and $1.99 billion. The midpoint of $1.97 billion exceeds Wall Street's $1.95 billion estimate.

The company also forecast fourth-quarter adjusted earnings between $490 million and $525 million. Analysts had expected $498 million, according to the earnings report.

Snap executives outlined a planned change to the company's audience measurement strategy in an investor letter. Beginning in the first quarter of 2027, globally monthly active users will become the company's primary audience metric.

Snap reported 977 MAU for the quarter. The executives explained the reasoning behind the planned reporting change in their investor letter.

"Daily engagement has historically been stable as a percentage of monthly engagement, but we do not intend to optimize Snapchat around daily use at the expense of long-term value for our community. A longer-term horizon better aligns our reported metrics with the product and safety decisions that strengthen relationships, create lasting utility, and support broader, more durable audience growth." the investor letter said.

The advertising business also faced pressure from reduced spending among consumer packaged goods companies, according to Snap Chief Commercial Officer Ronan Harris. During the earnings call, Harris linked the spending slowdown to economic conditions in the United States and the Middle East.

Harris said the company was also seeing opportunities in other advertising sectors, particularly financial services in the United States.

"As we look ahead, we're seeing very positive signs of growth from diversified verticals like financial services in the U.S. So part of our strategy here is to look outside of the pressures in CPG and find traction in these other verticals." Harris said.