Snap Inc. reported progress in user growth, advertising business, AR technology, and financial performance at its financial report meeting in the second quarter of 2025. The company reached 93.2 million monthly active users, showing significant year-on-year growth, and is moving towards its goal of serving one billion users. Its advertising business platform has attracted numerous companies due to its unique brand safety environment and market positioning targeting the younger generation. At the same time, the number of subscription users for SnapChat Plus is approaching 16 million, making a significant contribution to the company's non-advertising revenue. The company's long-term investment and innovation in AR technology, as well as adjustments to its internal structure to optimize engineering and technology investments, demonstrate its strong confidence in the future. In addition, SnapChat has launched a series of new features aimed at enhancing communication and interaction between users, including an Apple Watch application, enhanced video chat, etc., all of which reflect the company's continued commitment to improving user experience and promoting user engagement.

In the second quarter, Snapchat acquired the social calendar app Saturn with the aim of enhancing real social contacts between users and exploring deep integration with Snapchat technology. Furthermore, Snapchat continues to innovate in the field of augmented reality (AR), with over 350 million users using AR features daily. They have launched several AI-based AR lenses, such as the 90s school photo AI lens, different eras AI lens, and cartoon world AI lens, which have received over 1 billion views. To support AR creators, Snapchat has introduced tools like Easy Lens to lower the barrier for AR creation, and plans to launch the first fully independent lightweight AR glasses in 2026. In terms of advertising, Snapchat has significantly improved its advertising platform through optimizing AI and machine learning capabilities, enhancing ad formats and tools, and strengthening market strategies for small and medium-sized businesses. Specifically for e-commerce advertisers, purchase volume and ad revenue have grown by 39% and over 25% respectively. Additionally, Snapchat has introduced new advertising products such as Sponsored Snaps and First Snap to enhance interaction between advertisers and users and increase conversion rates.

SnapChat has significantly improved the efficiency and effectiveness of advertising through the launch of AI-driven Smart Campaign Solutions, including Smart Bidding, Smart Budget, and Auto Targeting. For example, a sports brand in Europe, Roas, doubled their return on ad spend, increased conversions by 50%, and decreased costs by 50%. At the same time, SnapChat has optimized market operations for small business advertisers, making small businesses the main contributors to advertising revenue growth. Through more efficient advertising products, improved market strategies, and simplified purchasing experiences, such as the French online financial tool wys B Money, costs have been significantly reduced and ECPM and click costs have been increased using SnapChat's intelligent bidding. In the future, SnapChat plans to deepen investments in AI and machine learning, innovate advertising formats, enhance advertising optimization tools, and ensure high performance and automation for all advertising partners on the platform.

The report shows that global community DAU grew to 469 million in the second quarter, with total revenue reaching 500 billion MP, a 9% year-on-year growth. Despite facing challenges such as advertising platform issues, the impact of Ramadan, and policy changes, advertising revenue still grew by 4% to 117.4 billion MP. The launch of Lens Plus subscription service drove a 64% growth in other revenue streams. It is expected that DAU will reach 476 million in the third quarter, with revenue between 147.5 billion and 150.5 billion MP. Emphasis is placed on continued investment in ML and AI to enhance advertising effectiveness and personalized content, while also optimizing cost structure to achieve long-term growth and positive cash flow.

In this discussion, the Snapchat team detailed their optimistic outlook on sponsoring Snap ad units, emphasizing the potential of this ad format for high-frequency usage within the app. They pointed out that sponsoring snaps has already brought incremental reach and conversion rates for advertisers, while also increasing user engagement. Additionally, the team explained the reasons for the slowing growth of ad revenue in the quarter, including the impact of adjustments to the advertising platform, changes in the timing of Ramadan, and the effects of minor changes. They stressed that with these adjustments, ad revenue growth is recovering, and they are confident in the growing demand for new ad units.

The performance changes of brand advertising and Direct Response (DR) advertising in Snapchat's advertising business were discussed. It was pointed out that brand advertising revenue remained stable in the second quarter, while DR advertising revenue experienced significant growth. At the same time, Snapchat's unique vision in Augmented Reality (AR) and eyewear products, as well as its competitive strategies against Meta and Google, were also discussed. It emphasized Snapchat's enthusiasm for AR and its ability to pursue a vision independently.

The conversation discussed the huge opportunity of redefining computing technology through augmented reality (AR) glasses, and how to achieve this goal through vertical integration of technology stacks, a strong developer ecosystem, and efficient utilization of cash flow. In addition, it also mentioned the strategy of jointly bringing AR glasses to market with partners.

In the conversation, it was mentioned that the user activity of Snapchat in North America remains stable, with a 30% year-on-year increase in communication volume between friends and family, demonstrating the deep engagement of users with the platform. At the same time, the Snapchat Plus business has shown strong growth momentum, reaching an annualized revenue of $700 million, a 64% year-on-year increase, showing significant contribution of this service to Snapchat's overall business. In the future, the company plans to further explore users' willingness to pay by launching new products and enhancing creator features, in order to drive continuous growth of the business.

The reasons for reducing stock compensation costs were discussed, emphasizing the focus on core strategic priorities and investment balance to promote profitable growth. At the same time, progress in Spotlight advertising revenue was shared, including experimental placements, high consideration inventory advantages, and format iteration, indicating its increasing importance in the business. In addition, measures to accelerate user engagement and thoughts on second-quarter advertising revenue guidance were also mentioned.

Snapchat discussed the growth in ad revenue, particularly the accelerated opportunities brought by the implementation of sponsored snaps. They highlighted how the interaction patterns of North American users have shifted from posting stories only to friends to initiating dialogues through sharing content in Spotlight or stories, emphasizing the role of content sharing as a catalyst for conversations. For future product innovations, they will focus on new service sections that inspire or kickstart conversations. Additionally, they mentioned expectations for ad revenue growth in the third quarter, as well as overcoming challenges from last year's major events such as the Olympics. Finally, they explored the long-term development of the user interface, including the application of AR technology, and the central role of content and AI in this process, expressing considerations for both self-built and collaborative development.

The conversation focused on the role of artificial intelligence (AI) in accelerating the realization of a personalized computing vision, particularly in investment and innovation in image and video generation, 3D generation, and augmented reality (AR) technologies. Through self-developed developer tools and ecosystem support, the company is committed to creating more differentiated and competitive AR experiences, especially in the upcoming era of AR glasses, providing richer and more contextually relevant computing experiences with the surrounding environment.

In the second quarter, small and medium-sized enterprise (SMC) clients became the main contributors to revenue growth. This was mainly due to the company's improved market operations and the simplification of advertising products and advertising managers. Smart solutions, such as budget optimization and automatic targeting, use artificial intelligence to help advertisers find the right audience, achieve product conversion, and reduce funnel goals, especially benefiting small advertisers who may lack resources for managing advertising campaigns in detail. Automated improvements are expected to provide significant boosts for SMCs, and this strategy will be more widely applied.

During Snap Inc.'s second quarter 2025 earnings conference call, the focus was on the early performance and user engagement of Lens Plus service. The company is optimistic about Lens Plus, believing that its exclusive and AI lenses will be key drivers of growth. In addition, Snap Inc. is also considering pricing experiments and added features to further enhance subscription value and user retention, emphasizing that providing ongoing value to users is its main focus.