• by Colin Kirkland , August 3, 2026

Snap's second-quarter earnings report was strong, showing significant increases in ad revenue, cash flow, and Spotlight video engagement, yet struggles to add users in key business markets, including North America and Europe.

Overall revenue increased 19% compared to Q2 2025, reaching $1.60 billion. Advertising revenue grew 9% to $1.28 billion – a result of Snap’s improved ad products over the past several quarters.

According to the report, Snap likens this quarter’s ad numbers to “better momentum” among large advertisers in North America, with World Cup-related spending up, as well as spending among small and medium-sized businesses and app advertisers.

During Q2, retailers helped increase revenue tied to Snap’s Dynamic Product Ads by 43% year-over-year, surpassing Q1's 30% growth.

Additional revenue also grew 85%, reaching $316 million, due to ongoing interest in premium offerings like Snapchat+ and Lens+.

Snap's earnings announcement states that with less than 3% of its MAUs currently paying for subscriptions, the company aims to expand its premium features offerings across AI-powered creative tools and additional subscription products.

Internal teams are also working more efficiently with the use of AI. According to the report, code reviewers are able to review about 90% of pull requests, saving an estimated 30,000 hours of code-view time.

Snap's AI-powered support agent is answering almost 4 million user questions per month, reducing support ticket volume by about 62% since the start of 2026.

In addition, Snap’s report states that AI has increased first-pass image review automation from 40% in Q2 2025 to 90% in Q2 2026, leading to speedier approvals for advertisers and lower operating costs.

As for content tabs on the app, Spotlight -- Snap's short-form video feed -- attracted 115% more people posting videos year-over-year, with daily active viewers increasing over 20%.

Days before releasing its Q2 earnings, Snap also announced that it has begun changing to recommendation systems to prioritize human-made Spotlight content over videos made entirely with AI.

Moving forward, Snap's main financial objective is boosting free cash flow per share. In Q2, the company reported $121 million in free cash flow, compared to 24% million the prior year.

However, Snap’s overall revenue growth is slowest in its key market, the U.S., where revenue grew 15% year-over-year, compared to 17% in the “Rest of the World” and 33% in Europe.

At $10.25 per user, the U.S. remains the most lucrative market for Snapchat, yet user growth has dropped year-over-year in the region, from 98 million in Q2 2025 to 92 million in Q2 2026, as all other regions gain users.

Still, Snap’s monthly active users (MAUs) grew overall, reaching 971 million users across the globe, while its daily active users (DAUs) grew to 493 million.

Snap CEO Evan Spiegel said in an earnings call that the company is currently focused on strengthening its core business and building “a more durable financial foundation” for the platform.