Snap stock falls after Q3 revenue miss and a user-metric change

What happened. Snap, the parent of Snapchat, published third-quarter results on November 4. Revenue was $1,722 million, up 14% from $1,507 million a year earlier. Net income was $56 million, against a net loss of $104 million a year ago. Free cash flow, which is cash from operations minus spending on equipment, was $164 million, up from $93 million.

Where it missed. CNBC compared the numbers with forecasts. Revenue was $1.72 billion against $1.73 billion expected by LSEG. Global daily active users were 495 million against 499 million expected by StreetAccount. Revenue per user was $3.48, as expected. So the misses are small. CNBC says the shares sank more than 10%. Barron's says they fell 9% in after-hours trading and are down 27% this year.

The guide. For the fourth quarter Snap expects revenue of $1.95 billion to $1.99 billion. CNBC notes that the midpoint is above the Wall Street estimate of $1.95 billion.

The metric change. In its investor letter Snap said monthly active users will become its primary audience metric starting in the first quarter of 2027. It wrote that it does not want to optimize Snapchat around daily use at the expense of long-term value. Daily users are people who open the app on a given day. Monthly users are people who open it at least once in a 30-day period. Snap's own wording is that a longer horizon fits its product and safety decisions better.

What else Snap said. The CEO, Evan Spiegel, tied the quarter to progress on profit and to AI in advertising. He also pointed to the launch of SPECS, the company's augmented reality product.

Why it matters. Stock prices reflect what investors expected, not only what happened. A company can grow 14% and still fall if the numbers land a little under the forecast. Snap is a case study in reading a report against expectations. It is not a signal about what the shares will do next.

Confirmed facts

• Snap's third-quarter 2026 revenue was $1,722 million, up 14% from $1,507 million a year earlier.^[1]
• Net income was $56 million, compared with a net loss of $104 million in the prior year.^[1][2]
• Free Cash Flow was $164 million, compared with $93 million in the prior year.^[1]
• Revenue of $1.72 billion compared with $1.73 billion expected, according to LSEG.^[2]
• Global daily active users were 495 million against 499 million expected, according to StreetAccount; global ARPU was $3.48, as expected.^[2]
• Snap guided fourth-quarter revenue to between $1.95 billion and $1.99 billion; the midpoint is above analysts' estimate of $1.95 billion.^[2]
• Snap said monthly active users will become its primary audience metric starting in the first quarter of 2027.^[2]
• CNBC reports Snap shares sank more than 10% after the report.^[2]
• Barron's reports shares fell 9% in after-hours trading and that the stock is down 27% this year.^[3]
• CEO Evan Spiegel linked the quarter to progress on profit, AI in advertising and the launch of SPECS.^[1]

Implications

• ConfirmedSnap grew revenue, posted a net profit and generated positive free cash flow in the quarter, so the miss against forecasts was small.
• Our readingThe share drop reflects results against expectations, including the user numbers, and not a fall in revenue.
• Our readingSwitching to monthly users may make year-to-year comparisons of Snap's audience harder for outside readers.

Still unknown

• How the shares trade once the regular session opens on the next day
• How Snap will report daily users once monthly users become the main metric
• Whether fourth-quarter revenue lands inside the $1.95 billion to $1.99 billion guide

Who it affects

Global. People who follow Snap or social media companies, readers learning how earnings reports move stocks, and advertisers on Snapchat

Sources

1. Snap Inc.: Snap Inc. Announces Third Quarter 2026 Financial Results November 4, 2026 · official
2. CNBC: Snap shares fall over 10% on third-quarter revenue miss November 4, 2026 · media
3. Barron's: Snap Stock Falls Hard On Revenue Miss November 4, 2026 · media