Snap Stock Plunges 11%: A Profit Was Not Enough

Snap Inc. (NYSE: SNAP) fell about 11% in after-hours trading on Wednesday, November 4, 2026, dropping to around $5.24 from a $5.92 close, after third-quarter revenue and daily users came in just below Wall Street expectations — even though the Snapchat parent swung to a profit. The slide erased the stock's 5.8% gain from the regular session.

What happened

Snap reported third-quarter revenue of $1.72 billion, up 14% from $1.51 billion a year earlier, but slightly below the $1.73 billion analysts polled by LSEG had expected. Daily active users rose to 495 million, short of the 499 million projected by StreetAccount. Those two narrow misses were enough to send the shares sharply lower after the close, according to BeInCrypto and Barron's, which also put the early after-hours fall at around 9-11%.

On profitability, the quarter looked very different. Net income reached $56 million, reversing a $104 million loss in the same quarter of 2025. Adjusted earnings per share were $0.19, ahead of a $0.16 forecast, and adjusted EBITDA more than doubled to $383 million from $182 million, well above the $337 million analysts had expected. Operating cash flow climbed 44% to $210 million and free cash flow jumped 76% to $164 million, as reported in coverage citing CNBC via BigGo Finance.

Why it's blowing up

The reaction shows how unforgiving this earnings season has been for small misses. Snap did not report a collapse in its business: revenue grew by double digits, users grew 4% year over year to 495 million, monthly active users reached 977 million, and average revenue per user rose to $3.48. Advertising revenue grew 4%, while other revenue, led by subscriptions, jumped 84%. Yet investors focused on the two lines that missed — revenue and daily users — and on what they signal about growth from here.

Management also pointed to softer spending from some consumer packaged goods advertisers in the quarter, a reminder that Snap's ad business still depends heavily on categories that can pull back quickly. At the same time, the company said it will change how it reports engagement: starting with its first-quarter 2027 report, global monthly active users will replace daily active users as the headline metric. That shift, noted by TechBooky in its summary of the CNBC report, means the daily figure investors punished on Wednesday will soon disappear from the scorecard — a change some readers will welcome as a focus on a larger audience, and others will read as moving the goalposts.

Key facts

• Stock move: Down about 11.5% after hours to $5.24, from a $5.92 close that was up 5.8% on the day.
• Revenue: $1.72 billion, up 14% year over year, versus $1.73 billion expected (LSEG).
• Users: 495 million daily active users versus 499 million expected (StreetAccount); 977 million monthly active users.
• Profit: Net income of $56 million versus a $104 million loss a year earlier; adjusted EPS of $0.19 versus $0.16 expected.
• Cash flow: Adjusted EBITDA of $383 million; free cash flow up 76% to $164 million.
• Guidance: Fourth-quarter revenue guided to $1.95 billion to $1.99 billion, with adjusted EBITDA of $490 million to $525 million.

What's next

For the fourth quarter, Snap guided revenue slightly above the consensus midpoint and EBITDA broadly in line with expectations, so the debate now moves to execution in the holiday advertising season. Investors will watch whether subscription and other non-advertising revenue can keep growing fast enough to offset slower ad growth, and whether user growth re-accelerates before the reporting change takes effect in early 2027. The stock had already fallen roughly a quarter this year before Wednesday's after-hours drop, so expectations were low — Wednesday showed they were not low enough on the two metrics that mattered most that night. This report describes what happened and how markets reacted; it is not a recommendation to buy, sell, or hold any security.

FAQ

Why did Snap stock fall after earnings?

Snap fell about 11% after hours because revenue of $1.72 billion and daily users of 495 million both missed expectations, even though the company swung to a $56 million profit and beat on adjusted earnings.

Did Snap make a profit in Q3 2026?

Yes. Net income was $56 million, compared with a $104 million loss a year earlier, and adjusted EBITDA rose to $383 million.

What did Snap guide for Q4 2026?

Snap guided fourth-quarter revenue of $1.95 billion to $1.99 billion and adjusted EBITDA of $490 million to $525 million.

Is Snap changing how it reports users?

Yes. From its Q1 2027 report, Snap plans to make monthly active users — 977 million in Q3 — its primary engagement metric instead of daily active users.

Sources: BeInCrypto, Barron's, TechBooky / CNBC, BigGo Finance / CNBC