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Back of Napkin

Snap Inc. SNAP

Three-pass checkedFresh as companies report

Snap's daily users in North America have declined for seven straight quarters, and the rate of decline is getting worse: down 1%, then 2%, 3%, 5%, and now 7%.

North America is where nearly all the advertising money is, and revenue still grew 19% last quarter because the company keeps raising the price per user.

SNAP · price with moving averages

Daily · 6MWeekly · 3Y
$3$7$10$14$18 Sep '23Apr '24Nov '24Jun '25Jan '26Aug '26 BID
EMAs82140

Source: market data.

The business

Snapchat is a messaging app built around photographs that disappear, used mostly by people under 30. Snap sells advertising against their attention. It also sells a subscription called Snapchat+ and makes camera glasses that have never been material.

The economics are simple and unforgiving: revenue equals users multiplied by revenue per user. When one of those falls, the other has to work harder, and there is a limit to how many advertisements can be pushed into a feed before the users leave faster.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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