In the most recent trading session Snap’s shares fell by 2.39%, a larger decline than the broader U.S. technology index, which dipped by 1.4% over the same period. This underperformance marks the third such session in the past month and follows a string of quarterly misses in both user growth and advertising revenue. Trading volume on the day exceeded the 30-day average by 12%, suggesting heavy selling pressure from institutional investors and hedge funds reallocating capital toward better-performing digital ad peers.

After 15 years as a public company, Snap continues to report net losses—$360 million last quarter—and persistent share count dilution from stock-based compensation, which increased by 18% year-over-year. Daily active user growth remains concentrated in Southeast Asia and Latin America, where average revenue per user is below $1. Meanwhile, North American DAUs were flat quarter-on-quarter and ad revenue growth in the region contracted by 5%. Operating expenses consumed 110% of sales in the latest quarter, and share-based-compensation–adjusted free cash flow was negative $290 million, pointing to an absence of operational leverage and a prolonged path to profitability.

Snap recently announced a partnership with AI search firm Perplexity, aiming to integrate generative search capabilities into its camera and chat features. While this move underscores Snap’s push into AI-driven experiences, analysts warn it represents a deviation from the company’s core social-media advertising model. Investment research suggests the partnership will require an incremental R&D spend of at least $50 million over the next two quarters, further straining a balance sheet already burdened by negative cash flow and raising questions about the return on investment in the near term.