Snap Q1 2026 Revenue Rises as DAUs Grow

Snap Inc. reported on May 6, 2026, that its first-quarter 2026 revenue rose as daily active users (DAUs) returned to growth outside North America and Europe. The company also said it amicably ended its partnership with AI startup Perplexity and is pursuing a restructuring to improve margins and boost cash flow.

Financial Results, Cash Flow, and Outlook

For the quarter ended March 31, 2026, Snap’s total revenue reached $1.53 billion, up 12% year over year. Adjusted EBITDA, a proxy for operating profit, more than doubled to $233 million, a 115% increase from the prior year. Operating cash flow rose to $327 million, and free cash flow climbed to $286 million. Trailing 12-month free cash flow stood at $609 million, while cash and marketable securities totaled about $2.8 billion, reflecting significantly stronger liquidity than a year earlier.

Snap’s guidance for the second quarter projects revenue between $1.52 billion and $1.55 billion and adjusted EBITDA of $175 million to $200 million. The outlook assumes no contribution from the Perplexity partnership, which the company said it amicably ended in the first quarter.

In April, Snap announced a restructuring aimed at cutting more than $500 million in annualized costs in the second half of 2026. The company expects to incur $95 million to $130 million in pre-tax restructuring charges, mostly in the second quarter, as part of its effort to achieve net-income profitability.

User Growth, Advertising Mix, and Product Trends

Global daily active users reached 483 million, up 5% year over year, while monthly active users rose to 956 million, also a 5% increase. The company noted that daily users in North America declined during the quarter even as growth resumed elsewhere.

Advertising revenue grew modestly to $1.24 billion, a 3% increase year over year. Other Revenue, which includes subscription and non-advertising services, surged 87% to $285 million. Snap attributed this growth primarily to Snapchat+, Memories storage, and Lens+, its monetized augmented reality offerings.

CEO Evan Spiegel said, "In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow."

Strategic Initiatives and Outlook

Snap plans to provide more details on its Specs intelligent eyewear initiative at the All Things Wearable (AWE) conference on June 16, 2026. Management emphasized disciplined execution as it invests in Specs and the long-term opportunity in intelligent eyewear.

The company’s restructuring and cost-cutting efforts aim to support profitability while navigating challenges such as a decline in North American daily users and headwinds from large advertisers in that region. Snap also cited geopolitical tensions in the Middle East as a factor affecting its outlook.

The termination of the Perplexity partnership, originally a $400 million strategic deal announced in November 2025, removes any expected revenue contribution from that relationship in the near term. Snap described the end of the partnership as amicable and did not disclose any termination fees or ongoing obligations.

Snap’s product innovations include AI-powered Sponsored Snaps launched in the first quarter, which enable brands to engage users through interactive conversations. The company also reported gains from advanced machine-learning models that improved ad conversion rates and app re-engagement.

Snapchat+ subscriptions and Memories storage contributed significantly to the acceleration in Other Revenue, with a larger-than-anticipated share of subscribers opting for higher-average-revenue-per-user offerings.

The company’s second-quarter guidance reflects cautious optimism amid these changes, with revenue and adjusted EBITDA expected to remain near first-quarter levels as restructuring charges weigh on profitability.

Snap’s focus on expanding margins and cash flow through restructuring, product innovation, and geographic growth outside North America and Europe will shape its trajectory in the coming quarters.