Slides
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Q2 2026 Earnings Slides August 3, 2026
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2 Forward-Looking Statements & Non-GAAP Financial Measures This presentation contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements regarding guidance, our future results of operations or financial condition, future stock repurchase programs or stock dividends, business strategy and plans, user growth and engagement, product initiatives, objectives of management for future operations, and advertiser and partner offerings are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “going to,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. We caution you that the foregoing may not include all of the forward-looking statements made in this presentation. You should not rely on forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this presentation primarily on our current expectations and projections about future events and trends, including our financial outlook, macroeconomic uncertainty, and geo-political events and conflicts, that we believe may continue to affect our business, financial condition, results of operations, and prospects. These forward-looking statements are subject to risks, uncertainties, and other factors, including those described in the sections titled “Risk Factors” and elsewhere in our most recent periodic report filed with the SEC, which is available on the SEC’s website at www.sec.gov. Additional information will be made available in our periodic report that will be filed with the SEC for the period covered by this presentation and other filings that we make from time to time with the SEC. In addition, any forward-looking statements contained in this presentation relate only to events as of the date on which the statements are made and are based on information available to us as of the date of this presentation. We undertake no obligation to update any forward-looking statements made in this presentation to reflect events or circumstances after the date of this presentation or to reflect new information or the occurrence of unanticipated events, including future developments related to geo-political events and conflicts and macroeconomic conditions, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, dispositions, joint ventures, restructurings, legal settlements or investments. This presentation includes certain non-GAAP financial measures. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP measures is provided in the Appendix of this presentation.
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3 Revenue Operating Performance Cash Second Quarter 2026 Financial Summary REVENUE WAS $1,599 MILLION IN Q2 2026, AN INCREASE OF 19% YoY 1Constant currency revenue increased 18% year-over-year to $1,591 million in Q2 2026. Constant currency revenue differs from GAAP revenue by approximately $8 million due to the impact of foreign exchange rates. Constant currency revenue is a non-GAAP measure. Refer to Appendix slide 4 for further detail. 2Adjusted Gross Margin is a non-GAAP measure. Refer to slide 8 for additional information. 3Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. Refer to slide 10 for additional information. 4Free Cash Flow is a non-GAAP measure. Refer to slide 12 for additional information. Quarterly information is unaudited. Numbers throughout presentation may not foot due to rounding. • Revenue was $1,599 million, compared to $1,345 million in the prior year, an increase of 19%1 year-over-year. • Average revenue per user was $3.25, compared to $2.87 in the prior year. • GAAP gross margin was 58%, compared to 51% in the prior year. • Adjusted Gross Margin2 was 59%, compared to 52% in the prior year. • Net loss was $164 million, compared to $263 million in the prior year. • Adjusted EBITDA3 was $250 million, compared to $41 million in the prior year. • Net loss margin was 10%, compared to 20% in the prior year. • Adjusted EBITDA Margin3 was 16%, compared to 3% in the prior year. • Operating cash flow was $176 million, compared to $88 million in the prior year. • Free Cash Flow4 was $121 million, compared to $24 million in the prior year. • Cash, cash equivalents, and marketable securities were $2.7 billion as of June 30, 2026.
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4 913 932 943 946 956 971 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Average Monthly Active Users (MAU) (in millions, unaudited) GLOBAL MAU INCREASED 39 MILLION, OR 4%, YoY We define a Monthly Active User, or MAU, as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at least once during the 30-day period ending on the calendar month-end. We calculate average MAUs for a particular quarter by calculating the average of the MAUs as of each calendar month-end in that quarter. GLOBAL MAU
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5 460 469 477 474 483 493 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Average Daily Active Users (DAU) (in millions, unaudited) GLOBAL DAU INCREASED 23 MILLION, OR 5%, YoY We define a Daily Active User, or DAU, as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at least once during a defined 24-hour period. We calculate average DAUs for a particular quarter by adding the number of DAUs on each day of that quarter and dividing that sum by the number of days in that quarter. 1North America includes Mexico, the Caribbean, and Central America. 2Europe includes Russia and Turkey. Numbers throughout presentation may not foot due to rounding. GLOBAL 99 98 98 94 92 92 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 NORTH AMERICA1 99 100 100 98 97 98 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 EUROPE2 262 271 280 282 294 303 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 REST OF WORLD
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6 $1,363 $1,345 $1,507 $1,716 $1,529 $1,599 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Revenue by Geography (in millions, unaudited) $832 $821 $898 $1,025 $851 $943 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 $224 $265 $298 $341 $324 $354 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 $308 $259 $311 $350 $354 $302 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 GLOBAL NORTH AMERICA1 EUROPE2 REST OF WORLD + 33% + 15%+ 19% + 17% GLOBAL REVENUE INCREASED 19% YoY Revenue for geographic reporting is attributed to regions based on our estimate of where revenue-generating activities occur, which is generally determined by the billing address of the customer. For advertising revenue, we allocate revenue based on the geographic location where advertising impressions are delivered, as this approximates revenue based on user activity. This allocation is consistent with how we determine ARPU. 1North America includes Mexico, the Caribbean, and Central America. 2Europe includes Turkey. Europe also includes Russia and Belarus; however, we maintain a policy prohibiting sales to entities in these countries. Numbers throughout presentation may not foot due to rounding.
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7 $2.96 $2.87 $3.16 $3.62 $3.17 $3.25 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Average Revenue Per User (ARPU) (unaudited) We define ARPU as quarterly revenue divided by the average Daily Active Users. For purposes of calculating ARPU, we attribute revenue to regions based on our estimate of where revenue-generating activities occur, which is generally determined by the billing address of the customer. For advertising revenue, we allocate revenue based on the geographic location where advertising impressions are delivered, as this approximates revenue based on user activity. 1North America includes Mexico, the Caribbean, and Central America. 2Europe includes Turkey. Europe also includes Russia and Belarus; however, we maintain a policy prohibiting sales to entities in these countries. Numbers throughout presentation may not foot due to rounding. $8.41 $8.33 $9.20 $10.88 $9.23 $10.26 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 $2.26 $2.65 $2.99 $3.47 $3.34 $3.62 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 $1.17 $0.96 $1.11 $1.24 $1.20 $1.00 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 GLOBAL NORTH AMERICA1 EUROPE2 REST OF WORLD + 36% + 23% + 4% + 13% GLOBAL ARPU WAS $13.19 OVER THE TRAILING TWELVE MONTHS
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8 GAAP AND ADJUSTED GROSS MARGIN INCREASED BY 7 PPT YoY 53% 52% 55% 59% 57% 59% Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Adjusted Gross Margin and Adjusted Cost of Revenue1 (dollars in millions, unaudited) 1Adjusted Gross Margin is a non-GAAP measure, which we define as GAAP revenue less Adjusted Cost of Revenue divided by GAAP revenue. Adjusted Cost of Revenue is a non-GAAP measure and excludes stock-based compensation expense, payroll and other tax expense related to stock-based compensation, depreciation and amortization, and certain other items impacting net income (loss) from time to time. See Appendix for a reconciliation of GAAP Cost of Revenue to Adjusted Cost of Revenue. Numbers throughout presentation may not foot due to rounding. ADJUSTED GROSS MARGIN1 ADJUSTED COST OF REVENUE1 COMPOSITION GAAP Gross Margin 53% 51% 55% 59% 56% 58% $377 $393 $404 $410 $401 $403 $99 $104 $112 $135 $126 $137 $161 $152 $154 $154 $135 $115 Infrastructure Costs Advertising Partner & Other Costs Content & Developer Partner Costs Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Non-GAAP Exclusions1 $3 $3 $3 $4 $3 $12 GAAP Cost of Revenue $640 $653 $674 $702 $665 $668 + 7 PPT + 1% $637 $650 $671 $699 $662 $656
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9 55% 51% 57% 62% 59% 57% Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Adjusted Operating Expense Margin and Adjusted Operating Expenses1 (dollars in millions, unaudited) GAAP OPERATING EXPENSE MARGIN IMPROVED 2 PPT YoY 1Adjusted Operating Expense Margin is a non-GAAP measure, which we define as GAAP revenue less Adjusted Operating Expenses, divided by GAAP revenue. Adjusted Operating Expenses is a non-GAAP measure and excludes stock-based compensation expense, payroll and other tax expense related to stock- based compensation, depreciation and amortization, and certain other items impacting net income (loss) from time to time. In Q2 2026, we incurred restructuring charges that are excluded from Adjusted Operating Expenses. See Appendix for a reconciliation of GAAP Operating Expenses to Adjusted Operating Expenses. Numbers throughout presentation may not foot due to rounding. ADJUSTED OPERATING EXPENSE MARGIN1 ADJUSTED OPERATING EXPENSES1 COMPOSITION $232 $246 $250 $256 $267 $279 $196 $202 $198 $198 $185 $218 $190 $205 $206 $206 $182 $196 Research & DevelopmentSales & Marketing General & Administrative Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Non-GAAP Exclusions1 $299 $298 $307 $304 $305 $408 GAAP Operating Expenses $917 $951 $961 $964 $938 $1,102 + 6 PPT + 6% $618 $654 $660$654 $633 $693 GAAP Operating Expense Margin 33% 29% 36% 44% 39% 31%
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10 $(140) $(263) $(104) $45 $(89) $(164) (10)% (20)% (7)% 3% (6)% (10)% Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Net Income (Loss) & Adjusted EBITDA1 (dollars in millions, unaudited) NET LOSS WAS $311 MILLION AND ADJUSTED EBITDA WAS $1,023 MILLION OVER THE TRAILING TWELVE MONTHS 1Adjusted EBITDA is a non-GAAP measure, which we define as net income (loss), excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense; payroll and other tax expense related to stock-based compensation; and certain other items impacting net income (loss) from time to time. In Q2 2026, we incurred restructuring charges that are excluded from Adjusted EBITDA. See Appendix for a reconciliation of net income (loss) to Adjusted EBITDA. 2Adjusted EBITDA Margin is a non-GAAP measure, which we define as Adjusted EBITDA divided by GAAP revenue. Numbers throughout presentation may not foot due to rounding. NET INCOME (LOSS) ADJUSTED EBITDA1 Net Income (Loss) Margin Adjusted EBITDA Margin2 8% 3% 12% 21% 15% 16% Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 $108 $41 $182 $358 $233 $250
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11 Diluted Net Income (Loss) Per Share & Common Shares Outstanding Plus Shares Underlying Stock-Based Awards (in millions, except per share data, unaudited) 1Diluted net income (loss) per share is calculated using diluted weighted average shares outstanding during the period. 2Shares underlying stock-based awards include restricted stock units, restricted stock awards, and outstanding stock options. Numbers throughout presentation may not foot due to rounding. Shares repurchased 27.3 30.0 — 29.4 49.9 48.6 YoY Change 1.9% 1.6% 3.1% 3.0% 3.5% 3.0% $(0.08) $(0.16) $(0.06) $0.03 $(0.05) $(0.10) Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 DILUTED NET INCOME (LOSS) PER SHARE1 COMMON SHARES OUTSTANDING PLUS SHARES UNDERLYING STOCK-BASED AWARDS 1,823 1,826 1,861 1,880 1,887 1,881 1,687 1,682 1,711 1,712 1,697 1,682 136 144 150 168 190 199 Common Shares Outstanding Shares Underlying Stock-Based Awards² Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 49 MILLION SHARES REPURCHASED IN Q2 2026 WITH $150 MILLION REMAINING UNDER AUTHORIZATION 128 MILLION SHARES REPURCHASED OVER THE TRAILING TWELVE MONTHS
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12 $152 $88 $146 $270 $327 $176 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Operating Cash Flow and Free Cash Flow1 (in millions, unaudited) OPERATING CASH FLOW WAS $919 MILLION OVER THE TRAILING TWELVE MONTHS FREE CASH FLOW WAS $706 MILLION OVER THE TRAILING TWELVE MONTHS 1Free Cash Flow is a non-GAAP measure, which we define as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. See Appendix for a reconciliation of net cash provided by (used in) operating activities to Free Cash Flow. Numbers throughout presentation may not foot due to rounding. OPERATING CASH FLOW FREE CASH FLOW1 Common shares outstanding 1,687 1,682 1,711 1,712 1,697 1,682Capex $(37) $(65) $(53) $(64) $(41) $(56) $114 $24 $93 $206 $286 $121 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26
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13 $2.7 BILLION IN CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES ON HAND AT Q2 2026 $3,207 $2,893 $2,993 $2,941 $2,823 $2,660 Q1'25 Q2'25 Q3'25 Q4'25 Q1'26 Q2'26 Capital Resources and Liquidity (in millions, unaudited) 1Outstanding debt is shown as of August 3, 2026. The outstanding balance of the 2026 Notes was repaid in cash in accordance with its contractual terms. 2In Q3 2025, we issued the 2034 Notes. In Q1 2025, we issued the 2033 Notes. 3In Q2 2025, other is composed of the repayment of the outstanding balance of the 2025 Notes at maturity. Numbers throughout presentation may not foot due to rounding. CASH, CASH EQUIVALENTS, AND MARKETABLE SECURITIES OUTSTANDING DEBT1 Significant financing activities Note Repurchases $(1,445) — $(550) — — — Stock Repurchases $(257) $(243) — $(250) $(350) $(250) Issuance of Notes2 $1,473 — $541 — — — Other3 — $(36) — — — — $0 $106 $514 $750 $1,500 $550 Maturity of Outstanding Principal 2026 2027 2028 2029 2030 2031 2032 2033 2034
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Appendix
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1 Three Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 June 30, 2026 Adjusted Cost of Revenue reconciliation GAAP Cost of Revenue $ 639,579 $ 653,333 $ 674,220 $ 702,443 $ 665,241 $ 667,885 Stock-based compensation expense (1,434) (1,656) (2,327) (2,009) (1,586) (1,819) Payroll and other tax expense related to stock-based compensation (102) (74) (69) (48) (66) (79) Depreciation and amortization (1,420) (1,505) (1,016) (1,818) (1,463) (1,384) Restructuring charges — — — — — (8,568) Adjusted Cost of Revenue1 $ 636,623 $ 650,098 $ 670,808 $ 698,568 $ 662,126 $ 656,035 GAAP Gross Margin 53 % 51 % 55 % 59 % 56 % 58 % Adjusted Gross Margin1 53 % 52 % 55 % 59 % 57 % 59 % Adjusted Operating Expenses reconciliation GAAP Operating Expenses2 $ 917,484 $ 951,273 $ 960,981 $ 964,301 $ 937,999 $ 1,101,829 Stock-based compensation expense (245,904) (250,230) (258,036) (255,229) (248,454) (234,861) Payroll and other tax expense related to stock-based compensation (17,116) (8,963) (7,454) (7,362) (12,980) (9,473) Depreciation and amortization (36,295) (38,518) (41,498) (41,563) (43,233) (44,215) Restructuring charges — — — — — (119,937) Adjusted Operating Expenses3 $ 618,169 $ 653,562 $ 653,993 $ 660,147 $ 633,332 $ 693,343 GAAP Operating Expense Margin2 33 % 29 % 36 % 44 % 39 % 31 % Adjusted Operating Expense Margin3 55 % 51 % 57 % 62 % 59 % 57 % Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) 1Adjusted Cost of Revenue is a non-GAAP measure and excludes stock-based compensation expense, payroll and other tax expense related to stock-based compensation, depreciation and amortization, and certain other items impacting net income (loss) from time to time. Adjusted Gross Margin is a non-GAAP measure, which we define as GAAP revenue less Adjusted Cost of Revenue divided by GAAP revenue. 2GAAP Operating Expenses is defined as total costs and expenses, as reported on our consolidated statements of operations, minus GAAP Cost of Revenue. GAAP Operating Expense Margin is defined as GAAP revenue less GAAP Operating Expenses, divided by GAAP revenue. 3Adjusted Operating Expenses is a non-GAAP measure and excludes stock-based compensation expense, payroll and other tax expense related to stock-based compensation, depreciation and amortization, and certain other items impacting net income (loss) from time to time. Adjusted Operating Expense Margin is a non-GAAP measure, which we define as GAAP revenue less Adjusted Operating Expenses, divided by GAAP revenue. Numbers throughout presentation may not foot due to rounding.
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2 Three Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 June 30, 2026 Adjusted Research and Development Expenses reconciliation GAAP Research and Development Expenses $ 424,165 $ 443,325 $ 453,418 $ 472,693 $ 478,296 $ 542,092 Stock-based compensation expense (156,688) (166,809) (171,649) (185,456) (173,916) (175,085) Payroll and other tax expense related to stock-based compensation (12,109) (5,761) (4,780) (4,852) (9,423) (6,653) Depreciation and amortization (22,987) (24,849) (27,127) (26,568) (28,160) (32,615) Restructuring charges — — — — — (48,453) Adjusted Research and Development Expenses1 $ 232,381 $ 245,906 $ 249,862 $ 255,817 $ 266,797 $ 279,286 Adjusted Sales and Marketing Expenses reconciliation GAAP Sales and Marketing Expenses $ 257,957 $ 257,853 $ 256,215 $ 249,280 $ 239,011 $ 298,399 Stock-based compensation expense (54,440) (48,710) (51,236) (43,627) (45,332) (42,035) Payroll and other tax expense related to stock-based compensation (2,937) (1,804) (1,502) (1,418) (2,060) (1,513) Depreciation and amortization (4,823) (5,108) (5,487) (5,945) (6,635) (7,711) Restructuring charges — — — — — (29,446) Adjusted Sales and Marketing Expenses1 $ 195,757 $ 202,231 $ 197,990 $ 198,290 $ 184,984 $ 217,694 Adjusted General and Administrative Expenses reconciliation GAAP General and Administrative Expenses $ 235,362 $ 250,095 $ 251,348 $ 242,328 $ 220,692 $ 261,338 Stock-based compensation expense (34,776) (34,711) (35,151) (26,146) (29,206) (17,741) Payroll and other tax expense related to stock-based compensation (2,070) (1,398) (1,172) (1,092) (1,497) (1,307) Depreciation and amortization (8,485) (8,561) (8,884) (9,050) (8,438) (3,889) Restructuring charges — — — — — (42,038) Adjusted General and Administrative Expenses1 $ 190,031 $ 205,425 $ 206,141 $ 206,040 $ 181,551 $ 196,363 Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) 1Adjusted Research and Development Expenses, Adjusted Sales and Marketing Expenses, and Adjusted General and Administrative Expenses are non-GAAP measures. These measures exclude stock-based compensation expense, payroll and other tax expense related to stock-based compensation, depreciation and amortization, and certain other items impacting net income (loss) from time to time. Numbers throughout presentation may not foot due to rounding.
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3 Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) 1In Q2 2026, charges relating to the restructuring were composed primarily of cash severance and other termination benefits, stock-based compensation expense, and lease exit and related charges. These charges are not reflective of underlying trends in our business. 2Adjusted EBITDA is a non-GAAP measure, which we define as net income (loss), excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense; payroll and other tax expense related to stock-based compensation; and certain other items impacting net income (loss) from time to time. Adjusted EBITDA Margin is a non-GAAP measure, which we define as Adjusted EBITDA divided by GAAP revenue. Numbers throughout presentation may not foot due to rounding. Three Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 June 30, 2026 Adjusted EBITDA reconciliation Net income (loss) $ (139,587) $ (262,570) $ (103,541) $ 45,209 $ (88,951) $ (163,960) Add (deduct): Interest income (37,018) (33,199) (32,255) (31,687) (26,459) (24,672) Interest expense 23,399 27,607 34,494 36,498 36,756 36,941 Other (income) expense, net (49,069) 823 (27,570) 6,946 1,014 (21,502) Income tax (benefit) expense 8,429 7,663 510 (7,249) 3,191 2,472 Depreciation and amortization 37,715 40,023 42,514 43,381 44,696 45,599 Stock-based compensation expense 247,338 251,886 260,363 257,238 250,040 236,680 Payroll and other tax expense related to stock-based compensation 17,218 9,037 7,523 7,410 13,046 9,552 Restructuring charges1 — — — — — 128,505 Adjusted EBITDA2 $ 108,425 $ 41,270 $ 182,038 $ 357,746 $ 233,333 $ 249,615 Net income (loss) margin (10) % (20) % (7) % 3 % (6) % (10) % Adjusted EBITDA Margin2 8 % 3 % 12 % 21 % 15 % 16 %
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4 Non-GAAP Financial Measures Reconciliation – Quarterly (in thousands, unaudited) 1Constant Currency Revenue is a non-GAAP measure, which we define as GAAP revenue in the current period translated using the prior period average monthly exchange rates for revenue transactions in currencies other than the U.S. dollar. We calculate the Constant Currency Revenue percentage change using current period constant currency revenue and prior period GAAP revenue. We report revenue on a constant-currency basis in order to facilitate period-to-period comparisons of our results without regard to the impact of fluctuating foreign currency exchange rates, which we believe is helpful to investors. However, Constant Currency Revenue is a non-GAAP financial measure, may be calculated differently from similarly titled measures used by other companies, and is not meant to be considered as an alternative or substitute for comparable measures prepared in accordance with GAAP. 2Free Cash Flow is a non-GAAP measure, which we define as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. Numbers throughout presentation may not foot due to rounding. Three Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 June 30, 2026 Constant Currency Revenue reconciliation GAAP revenue $ 1,363,217 $ 1,344,930 $ 1,506,839 $ 1,716,461 $ 1,528,791 $ 1,598,993 Effect of using prior period foreign exchange rates on current period revenue 7,283 (10,324) (11,840) (20,973) (28,417) (7,941) Constant Currency Revenue1 $ 1,370,500 $ 1,334,606 $ 1,494,999 $ 1,695,488 $ 1,500,374 $ 1,591,052 GAAP revenue percentage change 14 % 9 % 10 % 10 % 12 % 19 % Constant Currency Revenue percentage change 15 % 8 % 9 % 9 % 10 % 18 % Three Months Ended March 31, 2025 June 30, 2025 September 30, 2025 December 31, 2025 March 31, 2026 June 30, 2026 Free Cash Flow reconciliation Net cash provided by operating activities $ 151,610 $ 88,494 $ 146,488 $ 269,578 $ 326,779 $ 176,214 Less: Purchases of property and equipment (37,214) (64,701) (53,044) (64,022) (40,772) (55,676) Free Cash Flow2 $ 114,396 $ 23,793 $ 93,444 $ 205,556 $ 286,007 $ 120,538
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5 Non-GAAP Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use the non-GAAP financial measure of Free Cash Flow, which is defined as net cash provided by (used in) operating activities, reduced by purchases of property and equipment. We believe Free Cash Flow is an important liquidity measure of the cash that is available, after capital expenditures, for operational expenses and investment in our business and is a key financial indicator used by management. Additionally, we believe that Free Cash Flow is an important measure since we use third-party infrastructure partners to host our services and therefore we do not incur significant capital expenditures to support revenue generating activities. Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net income (loss), excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense; payroll and other tax expense related to stock-based compensation; and certain other items impacting net income (loss) from time to time. We believe that Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in Adjusted EBITDA. [We use the non-GAAP financial measure of Constant Currency Revenue, which is defined as GAAP revenue in the current period translated using the prior period average monthly exchange rates for revenue transactions in currencies other than the U.S. dollar . We calculate the Constant Currency Revenue percentage change using current period constant currency revenue and prior period GAAP revenue. We report revenue on a constant-currency basis in order to facilitate period-to-period comparisons of our results without regard to the impact of fluctuating foreign currency exchange rates, which we believe is helpful to investors. However, Constant Currency Revenue is a non-GAAP financial measure, may be calculated differently from similarly titled measures used by other companies, and is not meant to be considered as an alternative or substitute for comparable measures prepared in accordance with GAAP.] We use other non-GAAP financial measures such as Adjusted Cost of Revenue and Adjusted Operating Expenses (which is composed of Adjusted Research and Development Expenses, Adjusted Sales and Marketing Expenses, and Adjusted General and Administrate Expenses). These measures are defined as their respective GAAP expense line items, excluding interest income; interest expense; other income (expense), net; income tax benefit (expense); depreciation and amortization; stock-based compensation expense; payroll and other tax expense related to stock-based compensation; and certain other items impacting net income (loss) from time to time. We use the non-GAAP financial measure of Adjusted Gross Margin, which we define as GAAP revenue less Adjusted Cost of Revenue divided by GAAP revenue as well as the non-GAAP financial measure of Adjusted Operating Expense Margin, which we define as GAAP revenue less Adjusted Operating Expenses, divided by GAAP revenue. Similar to Adjusted EBITDA, we believe these measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses we exclude in the measure. We believe that these non-GAAP financial measures provide useful information about our financial performance, enhance the overall understanding of our past performance and future prospects, and allow for greater transparency with respect to key metrics used by our management for financial and operational decision-making. We are presenting these non-GAAP measures to assist investors in seeing our financial performance through the eyes of management, and because we believe that these measures provide an additional tool for investors to use in comparing our core financial performance over multiple periods with other companies in our industry. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure, please see the reconciliations included within this Appendix.
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6 Note Regarding User Metrics and Other Data We define a Daily Active User, or DAU, as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at least once during a defined 24-hour period. We calculate average DAUs for a particular quarter by adding the number of DAUs on each day of that quarter and dividing that sum by the number of days in that quarter. DAUs are broken out by geography because markets have different characteristics. We define a Monthly Active User, or MAU, as a registered and logged-in Snapchat user who visits Snapchat through our applications or websites at least once during the 30-day period ending on the calendar month-end. We calculate average Monthly Active Users for a particular quarter by calculating the average of the MAUs as of each calendar month-end in that quarter. We define average revenue per user, or ARPU, as quarterly revenue divided by the average DAUs. For purposes of calculating ARPU, revenue by user geography is apportioned to each region based on our determination of the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity. This allocation differs from our components of revenue disclosure in the notes to our consolidated financial statements, where revenue is based on the billing address of the advertising customer. For information concerning these metrics as measured by us, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent periodic report filed with the U.S. Securities and Exchange Commission, or the SEC, which is available on the SEC’s website at www.sec.gov. Additional information will be made available in our periodic report that will be filed with the SEC for our most recently completed period and other filings that we make from time to time with the SEC. Unless otherwise stated, statistical information regarding our users and their activities is determined by calculating the daily average of the selected activity for the most recently completed quarter. While these metrics are determined based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our products are used across large populations globally. For example, there may be individuals who attempt to create accounts for malicious purposes, including at scale, even though we forbid that in our Terms of Service and Community Guidelines. We implement measures in our user registration process and through other technical measures to prevent, detect and suppress that behavior, although we have not determined the number of such accounts. Changes in our products, infrastructure, mobile operating systems, or metric tracking system, or the introduction of new products, may impact our ability to accurately determine active users or other metrics and we may not determine such inaccuracies promptly. We also believe that we don’t capture all data regarding each of our active users. Technical issues may result in data not being recorded from every user’s application. For example, because some Snapchat features can be used without internet connectivity, we may not count a DAU because we don’t receive timely notice that a user has opened the Snapchat application. This undercounting may increase as we grow in Rest of World markets where users may have poor connectivity. We do not adjust our reported metrics to reflect this underreporting. We believe that we have adequate controls to collect user metrics, however, there is no uniform industry standard. We continually seek to identify these technical issues and improve both our accuracy and precision, including ensuring that our investors and others can understand the factors impacting our business, but these technical issues and new issues may continue in the future, including if there continues to be no uniform industry standard.
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7 Note Regarding User Metrics and Other Data (Continued) Some of our demographic data may be incomplete or inaccurate. For example, because users self-report their dates of birth, our age-demographic data may differ from our users’ actual ages. And because users who signed up for Snapchat before June 2013 were not asked to supply their date of birth, we may exclude those users from our age demographics or estimate their ages based on a sample of the self-reported ages that we do have. If our active users provide us with incorrect or incomplete information regarding their age or other attributes, then our estimates may prove inaccurate and fail to meet investor expectations. We count a DAU or MAU only when a user visits Snapchat through our applications or websites and only once per user per period (daily for DAU and the 30-day period ending at calendar month-end for MAU) . We believe this methodology more accurately measures our user engagement. We have multiple pipelines of user data that we use to determine whether a user has visited Snapchat through our applications or websites during a particular measurement period. This provides redundancy in the event one pipeline of data were to become unavailable for technical reasons, and also gives us redundant data to help measure how users interact with our applications and websites. If we fail to maintain an effective analytics platform, our metrics calculations may be inaccurate. We regularly review, have adjusted in the past, and are likely in the future to adjust our processes for calculating our internal metrics to improve their accuracy. As a result of such adjustments, our DAUs, MAUs, ARPU, or other metrics may not be directly comparable to those in prior periods. Our measures of DAUs and MAUs may differ from estimates published by third parties or from similarly titled metrics of our competitors due to differences in methodology or data used.