Snap has embedded artificial intelligence across its entire advertising platform, from creative development to campaign delivery and optimization. In the fourth quarter, internal testing of dynamic product ads showed a 55% reduction in cost per action for campaigns with zero conversions and a 45% reduction for campaigns with one zero conversion, driving dynamic product ad revenue up 19% year-over-year. The company’s Smart Campaign suite—featuring smart targeting and smart budget tools—automatically allocates spend across objectives, reducing manual setup and delivering an 8% lift in conversions on performance campaigns.

Total revenue increased 10% year-over-year in Q4, with advertising revenue rising 5% to $1.48 billion and non-advertising revenue climbing 62% to $232 million. Subscription services—including Snapchat Plus and memory storage plans—grew subscribers by 71% to 24 million, bolstering higher-margin streams. Gross margin expanded to 59% as the revenue mix shifted toward subscriptions and in-app offerings. Global monthly active users reached 946 million, up 3 million sequentially, while daily active users stood at 474 million following targeted reductions in marketing spend to prioritize profitability.

Small and medium-sized business adoption remained a key growth driver, with total active advertisers up 28% year-over-year thanks to streamlined Ads Manager workflows, partner platform integrations and a new global partnership with Wix. The company also announced a $500 million stock repurchase program to offset employee dilution and deploy excess cash. Looking ahead, Snap is investing in AI-powered onboarding agents for SMBs and preparing its Specs subsidiary for the public launch of augmented-reality glasses later this year.