Snap Will Stop Leading With Daily Users — And Says It Won't Chase Them
Snap's CFO said monthly users become the main audience metric with first-quarter 2027 results, as the app nears 1 billion monthly users.
Snap, which makes the Snapchat messaging app, will drop daily users as its lead audience number: Chief Financial Officer Doug Hott said on the company's earnings call Wednesday that monthly active users become the primary metric starting with first-quarter 2027 results. He said Snap does not plan to optimize the app around daily use at the expense of long-term value.
A new scorecard for 2027
Beginning with first-quarter 2027 results, global monthly active users will be Snap's primary audience metric, Hott said. A monthly-user-based average revenue per user becomes the main monetization measure, and free cash flow per share completes what he called a three-part scorecard.
Snapchat is approaching 1 billion people each month, Hott said. Monthly users reached 977 million in the third quarter, CEO Evan Spiegel said on the call, while daily users grew to 495 million.
Revenue for North America, Europe and the rest of the world will still be reported separately, Hott said, calling regional revenue the most direct way to follow performance in those markets.
Why daily use is being demoted
Asked by a Goldman Sachs analyst for the thinking, Hott pointed to the 2025 shift toward profitable growth, when Snap cut global community-growth marketing and put its weight on direct revenue. Snap began reporting monthly users in the second quarter of 2025, he noted.
Hott said some decisions that improve the experience, keep people safe or support retention "may actually affect daily active use in the near term." In prepared remarks he put it more bluntly: "We do not intend to optimize Snapchat around daily use at the expense of long-term value for our community."
An analyst asked for examples. Spiegel cited skipping user acquisition or costly engagement in places Snap does not monetize well, and declining notifications or features that add app opens without long-term value. He added that "it certainly doesn't mean we're trying to reduce time spent or accept lower ad revenue."
A Bank of America analyst asked why rising Spotlight and chat engagement is not lifting daily users in the U.S. and Europe. Spiegel's answer focused on Spotlight's growth after Snap removed AI-generated and reposted content.
The quarter behind the change
Revenue rose 14% to $1.72 billion in the third quarter, Hott said, within the company's guidance range of $1.70 billion to $1.74 billion. Advertising revenue grew 4% and other revenue, led by subscriptions, grew 84%. Net income was $56 million.
Spiegel called 4% ad growth below the company's ambitions. Chief Commercial Officer Ronan Harris said brand advertising declined, hurt by lower spending from consumer-goods companies amid macro pressure in the U.S. and the Middle East.
For the fourth quarter, Snap guided to revenue of $1.950 billion to $1.985 billion and adjusted EBITDA of $490 million to $525 million. After its current buyback finishes in the fourth quarter, Hott said, Snap intends a multi-year approach to offsetting dilution, aiming for a stable fully diluted share count in 2027.
Snap's first-quarter 2027 report will be the first to lead with monthly users and monthly-user-based revenue per user.
Sources
- Snap shares fall over 10% on third-quarter revenue miss — CNBC
- Snap Swings To Profit As SPECS Glasses Set To Roll Out — deadline.com
- Snap Stock Dives After Q3 Earnings — Here's Why — benzinga.com
- Snap Settled a Social Media Addiction Suit. Here’s What Its November 4 Report Has to Prove — Yahoo Finance
- Snap Stock Falls Hard On Revenue Miss — Barron's
