Snap Inc Q4 Revenue Beats Estimates, Launches $500M Buyback and Guides Q1
Snap Inc reported Q4 2025 revenue of $1.72 billion (+10% YoY), with net income of $45 million and 71% subscriber growth to 24 million, driven by subscription revenue surging 62%. The company achieved a 59% gross margin, $358 million adjusted EBITDA, announced a $500 million buyback, and forecast Q1 revenue of $1.5–1.53 billion.
1. Earnings Beat Expectations
Snap Inc posted Q4 2025 revenue of $1.72 billion, a 10% year-over-year increase, surpassing the $1.70 billion consensus. Net income rose to $45 million from $9 million, and EPS topped estimates at $0.03, marking its first surprise profit in the quarter.
2. Margin Expansion and Cash Flow
The company’s gross margin expanded to 59% from 55% sequentially, targeting above 60% for FY26. Adjusted EBITDA reached $358 million with 51% incremental flow-through, while free cash flow for the quarter totaled $206 million.
3. Shareholder Returns and Guidance
Snap authorized a $500 million share buyback to offset employee dilution and guided Q1 2026 revenue of $1.5–1.53 billion with adjusted EBITDA of $170–$190 million. It also plans to launch next-generation AR Specs glasses later in the year.
4. User Growth and Strategic Investments
Subscription revenue soared 62% to underpin a 71% increase in paid users to 24 million, and the platform is nearing 1 billion monthly active users. Investments in augmented reality and artificial intelligence aim to drive future engagement and monetization.