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Meta (Facebook) for augmented reality social media.

Instagram for ephemeral visual sharing.

TikTok for augmented reality visuals.

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• Snapchat: A mobile application primarily focused on visual messaging, allowing users to share photos and short videos that often disappear.
• Spectacles: Smart glasses equipped with cameras to capture photos and videos directly from a first-person perspective, integrated with the Snapchat app.
• Advertising Services: A digital advertising platform that enables businesses to promote their products and services to Snapchat users through various ad formats.
• Lens Studio: A free desktop application empowering creators and developers to build and publish augmented reality experiences (Lenses) for the Snapchat platform.
• Snapchat+: A paid subscription service within the Snapchat app that provides access to exclusive features and early releases for an enhanced user experience.

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Snap Inc. (SNAP) primarily sells advertising services to other companies rather than directly to individuals. Its revenue is generated from businesses that advertise on the Snapchat platform.

Unlike some B2B companies with a few large, identifiable customers, Snap’s revenue is derived from a highly fragmented base of advertisers. Snap does not disclose specific individual companies as "major customers" because no single advertiser typically accounts for a significant portion (e.g., 10% or more) of its total revenue, which is common for large advertising platforms.

Therefore, instead of listing specific companies, we can describe the categories of businesses that constitute Snap's customer base (advertisers):

• Large Brands and Enterprises: These include global and national brands across various industries such as consumer packaged goods (CPG), automotive, entertainment, retail, technology, and financial services. These companies utilize Snapchat's platform for broad reach, brand awareness campaigns, and product launches, aiming to engage a younger demographic. While specific names are not disclosed as "major customers," examples of the types of companies that advertise extensively on such platforms include large corporations like Amazon (AMZN), Disney (DIS), major car manufacturers, and leading fashion/retail brands.
• Small and Medium-sized Businesses (SMBs): A vast number of smaller businesses leverage Snapchat's self-serve advertising tools to reach local audiences, drive foot traffic, or promote specific products and services. These businesses might not have large individual advertising budgets but collectively form a significant part of Snap's advertising revenue base.
• App Developers and Performance Marketers: This category includes companies focused on driving specific actions, such as app installs, website visits, or lead generation. This often includes mobile game developers, other app companies, and e-commerce businesses that use Snapchat for direct response advertising to acquire new users or customers.

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• Alphabet Inc. (Symbol: GOOGL)
• Amazon.com, Inc. (Symbol: AMZN)

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Evan Spiegel, Chief Executive Officer

Evan Spiegel is a co-founder of Snap Inc. and has served as its Chief Executive Officer and a member of its board of directors since May 2012. He co-founded Snap Inc. and developed the concept for Snapchat, initially named "Picaboo," as a product design class project at Stanford University in April 2011 with Bobby Murphy and Reggie Brown. Prior to co-founding Snap, Spiegel had unpaid internships in sales at Red Bull, and worked as a paid intern for a biomedical company and at Intuit. Spiegel notably turned down a $3 billion acquisition offer for Snapchat. He has also served on the board of directors of KKR & Co., Inc. since October 2021.

Derek Andersen, Chief Financial Officer

Derek Andersen has served as Snap Inc.'s Chief Financial Officer since May 2019, having previously been the Vice President of Finance since July 2018. Before joining Snap, Andersen was employed at Amazon.com, Inc. from March 2011 to June 2018, where he held various finance leadership roles, most recently as Vice President of Finance supporting Amazon's digital video business. He also held positions at Fox Interactive Media, including Senior Vice President, Finance and Business Operations for IGN, and Vice President, Finance. In July 2025, Andersen was appointed to the board of directors of DailyPay.

Robert Murphy, Chief Technology Officer

Robert Murphy is a co-founder of Snap Inc. and has served as its Chief Technology Officer and a member of the board of directors since May 2012. He collaborated with Evan Spiegel on an earlier project called "Future Freshmen" before the creation of Snapchat. Murphy was responsible for coding the original "Picaboo" (Snapchat) application.

Julie Henderson, Chief Communications Officer

Julie Henderson serves as Snap Inc.'s Chief Communications Officer.

Ajit Mohan, Chief Business Officer

Ajit Mohan has served as Snap Inc.'s Chief Business Officer since February 2025. Prior to this role, he was the President of APAC for Snap. Mohan's past experience includes serving as Vice President and Managing Director of India for Meta, and as CEO of 21st Century Fox's Hotstar, which was India's largest premium streaming platform.

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The key risks to Snap Inc.'s business are primarily centered around its highly competitive market, persistent unprofitability, and increasing regulatory and legal pressures.

1. Intense Competition and Advertising Revenue Challenges

   Snap Inc. faces fierce competition from larger social media platforms like Meta (Facebook and Instagram) and TikTok, which continually vie for user attention and advertising budgets. This intense competitive landscape has led to a slowdown in Snap's advertising revenue growth, a critical concern given that advertising constitutes approximately 87% of its total revenue. Technical issues, such as a misconfigured ad auction system, have also negatively impacted advertiser confidence and resulted in significant revenue shortfalls. Furthermore, Snap is experiencing declining or stagnant user engagement, particularly in lucrative markets like North America, which directly affects its appeal to advertisers and overall revenue potential.

2. Lack of Consistent Profitability

   Despite experiencing revenue growth, Snap Inc. has consistently reported operating and net losses. The company struggles with high operational expenses, including significant capital investments in areas like AI and augmented reality, which often outpace its gross profit. This ongoing unprofitability and weak margins raise significant concerns about the company's long-term financial sustainability and efficiency in converting user growth into a viable profit.

3. Regulatory Scrutiny and Legal Challenges

   Snap is navigating an increasingly complex environment of regulatory pressures and legal challenges. Recent examples include new age restriction laws in Australia that could limit its younger user base and the blocking of Snapchat by authorities in Russia. The company is also facing lawsuits, such as one filed by New York City, alleging that its platform contributes to mental health issues among young users due to addictive features. Additionally, Snap has been subject to securities class action lawsuits, with allegations of misleading investors regarding advertising revenue growth. These legal and regulatory hurdles pose risks of operational disruptions, substantial financial costs, and potential damage to investor and user trust.

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• TikTok's continued dominance and expansion, particularly in short-form video and broader social features, directly competes with Snapchat's core offerings and user attention.
• The aggressive growth of YouTube Shorts and other short-form video platforms intensifies competition for user engagement and creator talent, challenging Snapchat's Spotlight feature.
• Increased global regulatory scrutiny over data privacy and ongoing platform privacy changes (like Apple's App Tracking Transparency) continue to impact Snap's ability to target ads and generate revenue.

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Snap Inc.'s main products and services revolve around its advertising offerings on the Snapchat platform.

Addressable Market for Advertising Services:

• Global Social Media Advertising Market: In 2024, the global social media advertising market was estimated to be close to $250 billion USD. It is projected to grow to $256.5 billion USD in 2025.

• Global Digital Advertising Market: The global digital advertising market was estimated at $488.40 billion USD in 2024 and is expected to reach $567.85 billion USD in 2025. More broadly, worldwide online ad investment exceeded US$790 billion in 2024.

Snapchat Platform User Base (as an indicator of addressable audience for advertisers):

• Global Monthly Active Users (MAU): As of April 2025, Snapchat had over 900 million monthly active users worldwide.

• Global Daily Active Users (DAU): In the first quarter of 2025, Snapchat reported 460 million daily active users worldwide.

• Key Regions by User Base: As of 2025, India has the largest Snapchat audience with 210.9 million users, followed by the United States with 105.01 million users.

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Snap Inc. (SNAP) is poised for future revenue growth over the next 2-3 years, driven by a multi-faceted strategy focused on enhancing its advertising capabilities, expanding subscription offerings, leveraging augmented reality, and growing its user base and engagement.

1. Enhancements to the Advertising Platform and Direct Response (DR) Advertising: Snap is significantly investing in and improving its advertising platform, particularly in direct response advertising. This includes advancements in AI and machine learning for ad optimization, leading to more relevant and personalized ad experiences. Dynamic Product Ads, utilizing large language models, have reportedly driven over four times higher conversion rates for certain campaigns. New ad formats such as Sponsored Snaps and Promoted Places are demonstrating strong performance, leading to higher conversions and lower costs per action for advertisers. This focus on performance-based advertising is attracting a growing number of small and medium-sized businesses, with active advertisers more than doubling in Q4 2024.
2. Growth of Snapchat+ Subscriptions and Other Direct Revenue Streams: The company's subscription service, Snapchat+, is a substantial and rapidly growing driver of "Other Revenue." In Q3 2025, Other Revenue, primarily from Snapchat+ subscriptions, increased 54% year-over-year to $190 million, reaching an annualized run rate exceeding $750 million. The Snapchat+ subscriber base grew 35% year-over-year to nearly 17 million in Q3 2025. Snap is also expanding its premium offerings with new features like memories storage plans and AI-powered experiences in Lens+ and Platinum bundles, further diversifying its direct revenue streams.
3. Expansion and Monetization of Augmented Reality (AR) Features and Products: Snap continues to innovate and focus on augmented reality as a core part of its strategy. AR is increasingly becoming a central element in brand marketing, with AR try-ons, for instance, leading to significantly higher conversion rates for businesses. Snap monetizes AR primarily through ad placements, and aggregate AR ad spending is projected to grow substantially by 2027. Initiatives like "Challenge Tags" and Lens Creator Rewards incentivize AR developers, fostering a vibrant ecosystem of new AR experiences that can be monetized. Looking ahead, Snap plans the public launch of its Specs AR glasses, supported by Snap OS 2.0 and Snap Cloud, which could open new revenue avenues beyond advertising.
4. User Growth and Engagement: Sustained user growth and deepening engagement across its platform are fundamental to Snap's revenue expansion. In Q3 2025, Daily Active Users (DAUs) increased 8% year-over-year to 477 million, and Monthly Active Users (MAUs) grew 7% to 943 million. Increased engagement with content platforms like Spotlight and Creator Stories directly contributes to higher ad impression volumes. Furthermore, Snap is experiencing strong revenue growth in international markets, with Europe and the Rest of World segments showing significant year-over-year increases, indicating successful geographic expansion and user acquisition outside of North America.

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Share Repurchases

• Snap's board of directors authorized a stock repurchase program of up to $500 million of its Class A common stock in November 2025, a similar authorization was made in October 2024 and October 2023.
• The company reported actual share buybacks of $243.473 million for the quarter ending June 30, 2025, and $257.1 million for the quarter ending March 31, 2025.
• Annual share buybacks totaled $311.069 million in 2024 and $189.394 million in 2023.

Share Issuance

• Snap's annual stock-based compensation, which contributes to share issuance, was $1.041 billion in 2024, a decline from $1.324 billion in 2023, and $1.388 billion in 2022.
• The share repurchase programs are intended to opportunistically offset dilution from the issuance of restricted stock units to employees.
• In April 2020, Snap priced an upsized $850.0 million principal amount of 0.25% convertible senior notes due 2025.

Outbound Investments

• Snap made strategic investments totaling $(20.0) million for the three months ended June 30, 2025, and $(2.0) million for the nine months ended June 30, 2025.
• The company entered into a new partnership with Perplexity AI, which was reported to be worth $400 million.
• Snap plans to continue making acquisitions and strategic investments in other companies as part of its business strategy.

Capital Expenditures

• Snap's capital expenditures averaged $132.7 million annually from fiscal years 2020 to 2024, peaking at $211.7 million in December 2023.
• Capital expenditures were $194.8 million in 2024, an 8.0% decrease from 2023, but saw increases in previous years: 2023 ($211.7 million), 2022 ($129.3 million), 2021 ($69.875 million), and 2020 ($57.832 million).
• The primary focus of capital expenditures includes infrastructure costs for the Snapchat application, facility-related spending, and significant investments in machine learning, AI, and augmented reality technologies.