Social network Snapchat (NYSE: SNAP) missed Wall Street’s revenue expectations in Q3 2026, but revenue rose 14.3% year on year to $1.72 billion. Its GAAP profit of $0.03 per share was $0.03 above analysts’ consensus estimates.

For more on Snap, read our full research report for free.

“In Q3, we generated positive net income as revenue grew 14% year-over-year to $1.72 billion, reflecting the progress we are making to build a more profitable business,” said Evan Spiegel, co-founder and CEO. “AI is becoming a significant advantage for our teams and advertising platform, and we continue to strengthen our business while investing in our long-term vision for augmented reality with the launch of SPECS.”

Revenue growth

Reviewing a company’s long-term revenue performance reveals insights into its quality. Even a weak business can perform well for one or two quarters, but a high-quality one grows for years. Snap’s revenue grew at a decent 13.1% compounded annual growth rate over the last three years. Its growth was slightly above the average consumer internet company and shows its offerings resonate with customers.

This quarter, Snap’s revenue grew by 14.3% year on year to $1.72 billion but fell short of Wall Street’s consensus estimates.

Looking ahead, sell-side analysts expect revenue to grow 11.8% over the next 12 months, according to S&P, similar to its three-year rate. Despite the slowdown, this projection is above the sector average and suggests the market is forecasting some success for its newer products and services.

Daily active users

User growth

As a social network, Snap generates revenue growth by increasing its user base and charging advertisers more for the ads each user is shown.

Over the last two years, Snap’s daily active users, a key performance metric for the company, increased by 7.2% annually to 495 million in the latest quarter. This growth rate is slightly below average for a consumer internet business. To improve that performance, Snap likely needs to enhance the appeal of its current offerings or develop new products.

In Q3, Snap added 18 million daily active users, leading to 3.8% year-on-year growth. The quarterly print was lower than its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.

Revenue per user

Average revenue per user, or ARPU, is a critical metric to track because it measures how much the company earns from the ads shown to its users. ARPU can also be a proxy for how valuable advertisers find Snap’s audience and its ad-targeting capabilities.

Snap’s ARPU growth has been decent over the last two years, averaging 5.9%. Its ability to increase monetization while growing its daily active users demonstrates the value of its platform.

This quarter, Snap’s ARPU was $3.48. It grew by 10.2% year on year, faster than its daily active users.

Key takeaways from Snap’s Q3 results

Snap’s Q3 EBITDA came in well above analysts’ consensus estimates. Revenue, however, fell slightly short of expectations. Overall, this was a mixed quarter. The market seemed to be hoping for more: Shares tumbled 8.5% to $5.41 immediately after the report.

To assess Snap at its current price, consider its valuation, business quality and latest quarterly results. Read the full research report here (it’s free).