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Snap Inc. (SNAP): A Bull Case Theory

Snap Inc. (SNAP): A Bull Case Theory

Yahoo07-05-2025

We came across a bullish thesis on Snap Inc. (SNAP) on Substack by LongYield. In this article, we will summarize the bulls' thesis on SNAP. Snap Inc. (SNAP)'s share was trading at $7.83 as of May 1st. SNAP's forward P/E was 36.63 according to Yahoo Finance.
Photo by Thought Catalog on Unsplash
Snap Inc.'s Q1 2025 earnings show notable progress, with total revenue reaching $1.363 billion, a 14% year-over-year increase. The bulk of this revenue comes from advertising, totaling $1.211 billion, which grew 9% from the previous year. Additionally, the company's subscription service, Snapchat+, brought in $152 million, a significant 75% increase. This shift towards direct-response (DR) advertising, now representing 75% of ad revenue, marks a strategic pivot, although brand-oriented advertising revenue experienced a 3% decline. This decline in brand advertising signals potential challenges in upper-funnel demand, which could be a sign of broader macroeconomic pressures affecting advertiser spending.
On the profitability front, Snap made substantial improvements, narrowing its net loss to $140 million from $305 million in the same quarter last year, representing a 54% improvement. This was driven by higher revenues, reduced non-recurring costs, and gains from repurchasing $1.44 billion of convertible notes. The company also saw a 137% year-over-year increase in adjusted EBITDA, which reached $108 million, underscoring Snap's disciplined approach to cost management. Furthermore, operating cash flow of $152 million and free cash flow of $114 million reflect the company's solid financial position, with a trailing twelve-month free cash flow totaling $295 million. Snap's balance sheet shows a healthy $3.2 billion in cash and marketable securities, alongside a reduced debt load of $3.5 billion after issuing new senior unsecured notes.
Snap's user base continues to grow, with daily active users (DAUs) increasing 9% year-over-year to 460 million. The growth in the Rest of the World region was particularly strong, up 16% from the previous year, while North America saw a slight decline in DAUs. The company's monthly active users surpassed 900 million, marking a key milestone. Although global impressions grew by 17% year-over-year, Snap faced a decline in effective cost-per-mille (eCPM), down 7% due to inventory expansion outpacing demand. Despite these challenges, Snap saw a 60% increase in active advertisers, with small and medium-sized businesses (SMBs) driving this growth, which speaks to improvements in the company's advertising platform.

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WALMART CAPTURES 24% OF SNAP SHOPPERS' TOTAL CONSUMER SPENDING, NUMERATOR REPORTS
WALMART CAPTURES 24% OF SNAP SHOPPERS' TOTAL CONSUMER SPENDING, NUMERATOR REPORTS

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WALMART CAPTURES 24% OF SNAP SHOPPERS' TOTAL CONSUMER SPENDING, NUMERATOR REPORTS

By GlobeNewswire Published on June 16, 2025, 18:00 IST CHICAGO, June 16, 2025 (GLOBE NEWSWIRE) — Numerator, a data and tech company serving the market research space, has released The SNAP Evolution: Supporting Shoppers in a Changing Economy, an analysis that explores how shifts in SNAP (Supplemental Nutrition Assistance Program) benefits are affecting consumer behavior and retail spending. The report leverages behavioral data from over 31,600 verified SNAP recipients—defined as individuals who used benefits 12 or more times in the past year—and survey responses from more than 1,250 participants to highlight the potential ripple effects on both essential and discretionary retail categories amid proposed cuts to SNAP. Survey and Purchase Data Findings for Verified SNAP Consumers: Grocery spending among SNAP recipients continues to shift in response to program changes. As benefit levels fluctuated—peaking during expanded aid in 2021–2022 and dropping sharply after emergency allotments ended in March 2023—grocery buy rates closely followed. In March 2023 vs. a year ago, SNAP benefits issued dropped by 8.5%, while grocery buy rate among SNAP trips declined 8.4%. As benefit levels fluctuated—peaking during expanded aid in 2021–2022 and dropping sharply after emergency allotments ended in March 2023—grocery buy rates closely followed. In March 2023 vs. a year ago, SNAP benefits issued dropped by 8.5%, while grocery buy rate among SNAP trips declined 8.4%. Over four in five SNAP users' benefits don't last the full month. 86% of SNAP users say their benefits are exhausted before the end of the month—leaving the vast majority without financial assistance while grocery shopping. In addition, 63% of SNAP shoppers are concerned about their finances (+1 point vs. 2022). 86% of SNAP users say their benefits are exhausted before the end of the month—leaving the vast majority without financial assistance while grocery shopping. In addition, 63% of SNAP shoppers are concerned about their finances (+1 point vs. 2022). SNAP participation peaked in 2022 and has since tapered to a new baseline. 19% of U.S. households regularly utilized SNAP benefits in May 2022, compared to 15% of U.S. households in February 2025. Households who left SNAP are more financially stable. Households that used SNAP in 2021–2022 but no longer use it in 2025 are more likely to have a household income of over $80k, live in a suburban area, have a four-year or graduate degree, have 4–5 persons in their household, and be Gen X. 29% of lapsed 2021 SNAP households say they are putting money into savings. 19% of U.S. households regularly utilized SNAP benefits in May 2022, compared to 15% of U.S. households in February 2025. Households currently on SNAP are skewing higher income. 23% of current SNAP households have a household income of $80k or more (+6 points vs. 2020), 53% have an income between $40k–80k (+4 points), and 23% have an income of less than $40k (-10 points). 23% of current SNAP households have a household income of $80k or more (+6 points vs. 2020), 53% have an income between $40k–80k (+4 points), and 23% have an income of less than $40k (-10 points). The employment status of SNAP households is in flux. 19% of SNAP households are retired (+4 points), 33% are employed full-time (+2 points), and 12% are disabled (-5 points). 19% of SNAP households are retired (+4 points), 33% are employed full-time (+2 points), and 12% are disabled (-5 points). Nearly two-thirds of SNAP households do not have children. 65% of SNAP households do not have children in the home, an increase of 5 points from 2020. 65% of SNAP households do not have children in the home, an increase of 5 points from 2020. SNAP households are saying their nutritional needs are not being met. 68% say SNAP 'somewhat' or 'barely' covers nutritional needs (+5 points vs. 2022). With tighter budgets, shoppers are cutting back on nutrient-dense foods. 31% of SNAP shoppers say they are buying less meat / protein (+4 points vs. 2022), and 24% say they are buying less fresh produce (+7 points). 47% say they are stocking up during sales (-4 points). SNAP households are looking for more education and consistent benefits. SNAP households say that it would be beneficial to have more identifiable SNAP-eligible foods (26%, +2 points vs. 2022), education on creating a grocery budget (16%, +2 points), smaller, more frequent issuing of benefits (16%, +3 points), and education on healthy food choices (15%, +3 points). 68% say SNAP 'somewhat' or 'barely' covers nutritional needs (+5 points vs. 2022). Walmart captures a quarter of SNAP shoppers' CPG & General Merchandise spend. According to verified purchase data for SNAP users, Walmart leads in SNAP shopper spend (24%), followed by Kroger (8%), Costco (6%), Amazon (5%), Sam's Club (4%), with Walmart, Amazon, 7-Eleven, Dollar General, and Dollar Tree over-indexing with SNAP shoppers (vs. all shoppers). SNAP shoppers are shifting spend to large-format retailers with strong value and assortment. Over the latest 52 weeks (ending 03/30/2025), SNAP shoppers shifted their CPG & General Merchandise share toward Costco (+2.0%), Walmart (+1.2%), Amazon (+0.8%), Sam's Club (+0.5%), and Target (+0.3%). According to verified purchase data for SNAP users, Walmart leads in SNAP shopper spend (24%), followed by Kroger (8%), Costco (6%), Amazon (5%), Sam's Club (4%), with Walmart, Amazon, 7-Eleven, Dollar General, and Dollar Tree over-indexing with SNAP shoppers (vs. all shoppers). Among top CPG manufacturers, Post, Tyson, and Conagra are more exposed to changes in SNAP benefits. Looking at shopping trips where top brands were purchased, 10.6% of Post Consumer Brands trips utilized SNAP dollars, followed by 8.4% of Tyson trips, 7.7% of Conagra trips, 7.5% of Kraft Heinz trips, 7.3% of General Mills trips, 7.2% of Frito-Lay trips, 6.8% of J.M. Smucker trips, 6.8% of Bimbo Bakeries USA trips, 6.5% of Nestle trips, and 6.4% of Kellanova trips. For additional survey and purchase data on SNAP consumers, including state-level views and top CPG and General Merchandise retailers, visit the Numerator SNAP Insights Center at Numerator's SNAP survey was fielded in April 2025 to more than 1,250 SNAP participants. Purchase data was compiled using Numerator's Total Commerce Panel. About Numerator: Numerator is a data and tech company bringing speed and scale to market research. Numerator blends first-party data from over 1 million US households with advanced technology to provide 360-degree consumer understanding for the market research industry that has been slow to change. Headquartered in Chicago, IL, Numerator has 5,800 employees worldwide; 80 of the top 100 CPG brands' manufacturers are Numerator clients. Disclaimer: The above press release comes to you under an arrangement with GlobeNewswire. Business Upturn takes no editorial responsibility for the same. 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Reddit unveils AI-driven ad tools to help brands tap into user discussions
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time5 hours ago

  • Yahoo

Reddit unveils AI-driven ad tools to help brands tap into user discussions

(Reuters) -Reddit launched two new AI-powered advertising features on Monday aimed at helping brands drive greater engagement by tapping user conversations on the platform, the company said. The company said its AI-driven tool, "Reddit Insights", would provide real-time insights to marketers for planning campaigns by identifying trends on the platform and testing campaign ideas. It will also provide a feature called "Conversation Summary Add-ons", allowing brands to integrate "positive" user comments directly under the ads to show what they think about the ad subject. Platforms such as Reddit, Snap and Pinterest are leaning on AI-driven ad targeting tools to attract marketers in a fiercely competitive ad market amid economic uncertainties. Reddit's announcement comes after WPP Media trimmed its forecast for global ad revenue growth to 6% from its prior target of 7.7% due to uncertainties related to changing U.S. trade policies. Brands are expected to prioritize flexible ad contracts and accelerate the adoption of AI tools in ad production and user targeting, the media investment arm of ad group WPP said last week. Last month, Reddit forecast second quarter revenue above Wall Street estimates, but CEO Steve Huffman said the company expected some disruption for traffic from Google search. Reddit also launched new content moderation and analytics tools in March, aimed at helping people adhere to community rules and better understand content performance. Sign in to access your portfolio

Reddit unveils AI-driven ad tools to help brands tap into user discussions
Reddit unveils AI-driven ad tools to help brands tap into user discussions

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(Reuters) -Reddit launched two new AI-powered advertising features on Monday aimed at helping brands drive greater engagement by tapping user conversations on the platform, the company said. The company said its AI-driven tool, "Reddit Insights", would provide real-time insights to marketers for planning campaigns by identifying trends on the platform and testing campaign ideas. It will also provide a feature called "Conversation Summary Add-ons", allowing brands to integrate "positive" user comments directly under the ads to show what they think about the ad subject. Platforms such as Reddit, Snap and Pinterest are leaning on AI-driven ad targeting tools to attract marketers in a fiercely competitive ad market amid economic uncertainties. Reddit's announcement comes after WPP Media trimmed its forecast for global ad revenue growth to 6% from its prior target of 7.7% due to uncertainties related to changing U.S. trade policies. Brands are expected to prioritize flexible ad contracts and accelerate the adoption of AI tools in ad production and user targeting, the media investment arm of ad group WPP said last week. Last month, Reddit forecast second quarter revenue above Wall Street estimates, but CEO Steve Huffman said the company expected some disruption for traffic from Google search. Reddit also launched new content moderation and analytics tools in March, aimed at helping people adhere to community rules and better understand content performance. Sign in to access your portfolio

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