Snap’s Q2 growth slows as ad glitch and competition weigh on revenue

Snap Inc. delivered slower-than-expected revenue growth in Q2 2025, posting $1.34 billion—an 8.7 percent increase over the prior year, marking its slowest pace in over 12 months. Revenue aligned with estimates but fell short of the double-digit growth seen in prior quarters. Shares dropped about 15 percent in after‑hours trading. 

A technical glitch in Snap’s ad-buying platform temporarily caused some ads to run at unusually low prices, reducing revenue during the quarter. The company has reverted the error and said revenue growth recovered in subsequent weeks. 

Snap also faced headwinds from macro factors. The timing of Ramadan affected ad demand, and the U.S. ended its de minimis duty-free import exemption for low-cost goods—impacting ad spending by Chinese advertisers. 

Despite the slowdown, engagement metrics showed resilience. Daily active users rose 9 percent to 469 million, slightly surpassing analyst expectations. Snapchat+ subscriptions climbed 42 percent to nearly 16 million, highlighting success in diversifying revenue beyond advertising. Small and medium-sized businesses were the most active advertisers during the quarter. 

Sponsored Snaps, a new video ad format embedded in user inboxes, helped drive deeper engagement and came into wider deployment across the U.S. and several international markets. 

Snap forecasts Q3 revenue between $1.48 billion and $1.51 billion, and adjusted EBITDA in the range of $110 million to $135 million—both in line with or slightly above analyst consensus. Its net loss widened to $263 million from $249 million a year ago. 

The ad platform mishap, along with intense competition from social rivals like Meta and TikTok, underscores how limited Snap’s margin for error has become. “Digital ad tailwinds that propelled Meta and Reddit into blowout quarters turned into a light breeze for Snap,” said eMarketer analyst Jasmine Enberg. 

From a media-buying perspective, Snap’s subscription growth is encouraging, but the ad business remains vulnerable at scale. Lower pricing errors, shifting import policies affecting advertiser budgets, and competitors with deeper targeting capabilities all pose ecosystem challenges.

That said, Snapchat’s core audience continues to grow and its newer formats—like Sponsored Snaps—are gaining traction. The platform’s ability to engage small and medium businesses and scale ads that drive action remains essential for long-term recovery.