Snap Inc — Call Transcript 2026

Good afternoon, everyone, and welcome to Snap Inc's first quarter 2026 earnings conference call. At this time, participants are in a listen-only mode. I would now like to turn the call over to David Ometer, Head of Investor Relations. Thank you. Good afternoon, everyone. Welcome to Snap's first quarter 2026 earnings conference call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder, and Derek Andersen, Chief Financial Officer. Please refer to our investor relations website at investor.snap.com to find today's press release, earnings slides, and investor letter. This conference call includes forward-looking statements which are based on our assumptions as of today. Actual results may differ materially from those expressed in these forward-looking statements. We make no obligation to update our disclosures. For more information about factors that may cause actual results to differ materially from these forward-looking statements, please refer to the press release we issued today, as well as risks described in our most recent Form 10-K or Form 10-Q, particularly in the section titled Risk Factors. Today's call will include both GAAP and non-GAAP measures. Reconciliations between the two can be found in today's press release. Please note that when we discuss all of our expense figures, they will exclude stock-based compensation and related payroll taxes, as well as depreciation and amortization and certain other items. Please refer to our filings with the SEC to understand how we calculate any of the metrics discussed on today's call. With that, I'd like to turn the call over to Evan. Hi, everyone, and welcome to our call. Last fall, we described a crucible moment for Snap and the imperative to grow our community and engagement, reaccelerate revenue growth, improve gross margins, and establish a clearer path to net income profitability. We made meaningful progress on each of these priorities in Q1. Q1 marked a return to growth in daily active users, reaching 483 million, while monthly active users grew to 956 million. Revenue increased 12% year-over-year to $1.53 billion, including a 3% year-over-year increase in Advertising revenue to $1.24 billion and an 87% year-over-year increase in other revenue to $285 million. Net loss improved to $89 million. Operating cash flow was $327 million. Free cash flow was $286 million. Adjusted EBITDA was $233 million. These results indicate that we are closing the gap between engagement and monetization while converting revenue growth into a more durable path towards GAAP profitability. As we look ahead, our priorities are clear. First, grow our community and deepen engagement across Snapchat with a focus on highly monetizable geographies. Second, accelerate and diversify revenue growth. Third, build a more profitable and cash generative core business while investing with discipline in Specs and our long-term opportunity in intelligent eyewear. Our first priority is growing our community and deepening engagement by making Snapchat the best place to communicate with close friends and family. Engagement on our platform is built around relationships. People use Snapchat to talk to their friends, to express themselves visually, to share what they're seeing, and to stay connected to what is happening around them. That is why we continue to believe that our communication service is our strongest long-term advantage. In Q1, we continued to invest in new conversation starters to make communicating with friends easier and more fun. Topic Chats, which allow Snapchatters to participate in public conversations around trending topics and events, gained momentum as we broadened the rollout in Q1. For example, the March Madness Topic Chat was one of the most active real-time group chats, with more than 90,000 messages sent and peak concurrent participation exceeding 40,000 people. Games are also emerging as a popular conversation starter, with new two-player turn-based experiences creating low-friction ways for friends and family to connect. We also added new entry points for Games in Q1 to improve discovery, contributing to Games reaching 255 million monthly active users. In addition, we enhanced our messaging infrastructure by improving notification timeliness and relevance, and by making it easier for Snapchatters to seamlessly share content into conversations. Our community is increasingly using content sharing as a conversation starter, and Spotlight is playing an important role in recommending more shareable content. In Q1 2026, Spotlight shares and reposts grew 62% year-over-year globally and 124% year-over-year in the U.S. Our focus on prioritizing authentic content created using the Snapchat Camera and our investments in the Creator experience are driving Spotlight posts, contributing to nearly 74% year-over-year growth in Spotlight posters in the U.S. and over 61% globally. These efforts, combined with continued investment in resulted in higher engagement, with total time spent watching Spotlight increasing 11% year-over-year. Our augmented reality and Lens ecosystem continues to play an important role in enhancing communication and self-expression on Snapchat. More than 75% of Snapchatters are engaging with augmented reality every day on average, and our community uses Lenses in our Snapchat Camera 9 billion times per day on average. AI-powered Lens creation is transforming our AR ecosystem, with more than 400,000 Lenses submitted in Q1, increasing more than 150% year-over-year. The significant growth this quarter was driven primarily by the adoption of new Lens creation tools such as Easy Lens, our free tool designed to make Lens creation simpler, more fun, and more personal. The Map continues to play a growing role as a way to stay up-to-date with friends and discover new places. With more than 450 million global monthly active users in Q1, we believe that the Snap Map is the world's most personal map, continually adapting to highlight the friends, places, and real-world experiences that matter most to Snapchatters. As we layer in richer content and local signals, we see Snap Map developing into a powerful platform for connecting our community with places and services in the physical world, creating a durable foundation for local commerce and advertising over time. The innovation we delivered across new conversation starters, content sharing, Lenses, and Snap Map all contributed to the growth in our global community in Q1, with global daily active users and monthly active users both growing 5% year-over-year in Q1. Advertising execution improved in Q1, led by continued strength with SMBs and better performance across our lower funnel products. Large advertisers in North America remained a headwind, but we are beginning to see early signs of improvement as performance gains are more fully reflected in third-party measurement systems and as newer inventory in Chat is more widely adopted. Our focus is on three priorities: improving performance and measurement across the core ad platform, expanding new inventory, and translating those gains into broader advertiser adoption and larger commitments. First, we continue to make meaningful progress improving performance across our core direct response products. Growth in Q1 was led by lower funnel solutions and by performance-oriented advertisers responding to stronger ROI. Dynamic Product Ads revenue grew more than 30% year-over-year, while adoption among small and medium-sized customers more than doubled. We also saw strong momentum in App Advertising, where goal-based bidding revenue grew 27% year-over-year, and App Purchases revenue grew 87% year-over-year. Across Pixel Purchase campaigns, 7-0 purchases generated per dollar of revenue grew more than 23% year-over-year, which we view as a sign that conversion efficiency is improving. These gains are being driven by continued progress in AI, ranking, retrieval, and automation across the ad platform. Nearly 70% of advertising spend now use at least one of our AI-powered automation solutions, including Smart Audience, Smart Budget, or Smart Placement, which gives us confidence that these improvements are benefiting a broad share of the business. In Q1, we launched LLM-based user intent understanding for Dynamic Product Ads retrieval, which improved Pixel Purchase conversions by more than 2% and multimodal similar product retrieval using a vision language model fine-tuned on Snap data, which delivered an additional high-single-digit lift in DPA purchase conversions. We also upgraded our App Re-engagement model with stronger foundational user embeddings and a new multitask architecture, increasing purchase conversions by approximately 2% while improving CPA by nearly 9%. Together, these changes are making the platform more effective at matching the right advertiser, product, and creative with the right Snapchatter at the right moment. Measurement remains a critical priority, particularly for large advertisers and agencies. It is not enough for our internal systems to show better performance. Those gains need to be reflected in the third-party measurement tools advertisers use to evaluate spend and allocate budgets. Over the past year, we have made progress closing long-standing measurement gaps so that external systems more accurately reflect the performance we are delivering. According to Measured, median iROAS on Snapchat grew 104% from the April through September 2025 test period to the October 2025 through March 2026 test period. This matters because larger advertisers typically move budgets only after platform improvements are validated externally. Second, we are expanding new inventory in places where Snapchatters are already taking action. Sponsored Snaps continues to demonstrate the potential of bringing brands into the Chat experience in a way that feels native to Snapchat while also creating a meaningful new surface for performance advertising. We are scaling this surface carefully with a focus on preserving the quality and frequency of close-friend communication. In Q1, nearly 75% of U.S. Chat daily active users viewed ads in Chat, and roughly 1/3 of Sponsored Snaps reach was unique to Chat, clearly demonstrating that Chat is driving meaningful incremental reach. We are seeing encouraging performance from Sponsored Snaps. In Q1, per impression click-through rate improved 226%, and seven-day conversion volume increased 59%. While this remains an early opportunity, those results suggest that Chat can support both scale and measurable performance over time. Building on this momentum, we introduced AI Sponsored Snaps, a new format that enables brands to engage Snapchatters through interactive AI-powered conversations in Chat and extends our strategy of delivering more personalized, high-intent advertising experiences. We are also encouraged by the progress we are seeing with Promoted Places, which helps connect digital discovery on Snapchat with real-world action. Early campaigns generated more than 20 million incremental visits and double-digit growth in foot traffic. For example, Carl's Jr. achieved an 18% lift in incremental visits alongside gains in ad awareness and brand favorability. We believe products like Sponsored Snaps and Promoted Places can expand our lower funnel footprint over time by adding more differentiated inventory while creating more measurable outcomes for advertisers. Third, we are continuing to grow and diversify our advertiser base. Over the past three years, the number of current SMB advertisers on our platform has nearly tripled. In Q1, SMBs grew spend by more than 30% year-over-year in North America. SMBs accounted for more than 30% of global ad revenue and remained our largest ad growth driver for the seventh consecutive quarter. This continues to reflect strong product market fit in the segment, as well as the improvements we are making in onboarding, automation, and advertiser support. At the same time, large advertisers in North America remained a headwind to Advertising growth in Q1. We are not satisfied with that outcome, but we are beginning to see encouraging signs that this part of the business is improving. As measurement systems have time to reflect the performance gains we have delivered and as newer inventory becomes available at greater scale, we are seeing better traction with large customers. North America upfront commitments for 2026 grew approximately 10% year-over-year, which we view as an important sign that agencies and advertisers are increasingly willing to invest as performance and measurement improve. At the same time, we want to be clear that recovery among larger North American advertisers remains early and uneven. These customers typically make planning and investment decisions on quarterly or semi-annual cycles, which means revenue often lags underlying improvements in performance. Overall, Q1 marked important progress in strengthening the foundation of our Advertising business. We improved performance across key direct response products, made meaningful progress in measurement, and continued to scale new inventory that expands both reach and conversion opportunity. These gains are already driving stronger results with SMBs and performance advertisers, and we are beginning to see early signs that larger advertisers in North America are responding as well. While there is still work to do, we believe the progress we made in Q1 positions us well to drive broader adoption and more durable revenue growth over time. In Q1, we continued to diversify our top line with other revenue reaching $285 million, up 87% year-over-year and representing a 25 percentage point acceleration over the prior quarter growth rate. Memories Storage was an important driver of this acceleration, and we are encouraged to see that a larger than anticipated share of new subscribers acquired through Memories are choosing higher ARPU subscription offerings, including Snapchat+. This performance reflects the increasing value of our subscription products as we continue to introduce features that enhance the user experience and create differentiated value for our community. We view subscriptions as strategically important for three reasons. First, they deepen our direct relationship with Snapchatters. Second, they help diversify revenue by adding a business line that is less exposed to the advertising cycle. Third, they can be attractive from a margin and cash generation perspective as we scale. We are strengthening the long-term foundation of our subscription strategy by creating new subscription tiers and offerings, including Lens+. AI-powered Lens interactions are deepening user engagement and increasingly serving as a natural discovery layer for premium AI-powered experiences. Lens+ is emerging as a key extension of this strategy, offering subscribers access to exclusive Lenses and AI-powered features. Early traction has been encouraging, with Lens+ contributing to higher subscription ARPU and gross margin expansion. We continue to innovate on additional direct value propositions for our community, including the launch of Creator Subscriptions in Q1. We believe this offering can deepen creator engagement on Snapchat, strengthen relationships between creators and their audiences, and further diversify our revenue streams over time. We are excited about the upcoming launch of Specs and our mission to make computing more human. For more than a decade, we have believed that smart glasses will be the most important computing platform transition since the smartphone. Snap is uniquely positioned to shape that future because we bring together a scaled augmented reality platform, a large developer ecosystem, and a vertically integrated software and hardware stack through Lens Studio, Snap OS, and Specs. Over the past year, we continued to improve our platform with major Snap OS updates, new tools and APIs for developers, and new experiences that expand what is possible on Specs across learning, gaming, utility, and AI-powered assistance. We are also seeing encouraging momentum in our developer ecosystem, with the number of Lenses submitted for Specs increasing 28% year-over-year. We are inspired by the range of Lens experiences developers are building for Specs. Early examples include Fossils from XR company VyuXR Immersive Studios, an interactive AR learning experience that uses spatial puzzle mechanics to let users uncover and assemble prehistoric fossils while bringing extinct animals to life. Artel from Yegor Ryabtsov, an AR drawing app that lets users create in 3D space with a wide range of brushes, colors and effects, and now includes physics-based interactions that allow drawings to respond to gravity and motion. The Heist by GrowPile, a co-located AR puzzle game in which players solve changing modules and challenges to disarm an anti-theft system, either solo or with others on Specs or mobile. We look forward to sharing more as we get closer to launch, and we hope you will join us at Augmented World Expo on June 16th as we continue our work to make computing more human. I'd now like to turn over the call to Derek to discuss our financial results. This will be Derek's last earnings call at Snap, and I want to thank him for his leadership and contributions to our team over the past eight years. Thank you, Evan. I really appreciate the kind words and thank you everybody for joining our call today. In Q1, we demonstrated substantial financial progress with revenue at the top end of our guidance range, gross margins expanding year-over-year and adjusted EBITDA materially favorable to our prior guidance. More broadly, we believe Q1 provides early evidence that the strategic framework we laid out last fall is beginning to translate into more durable revenue growth, a more efficient cost structure, and a clear path to net income profitability. Total revenue was $1.53 billion in Q1, up 12% year-over-year. Other revenue increased 87% year-over-year to $285 million in Q1, driven primarily by continued momentum in Snapchat+ subscriptions, strong adoption of our newer offerings such as Memories, and early traction from Lens+. Advertising revenue reached $1.24 billion in Q1, up 3% year-over-year, driven primarily by growth in direct response Advertising revenue, partially offset by continued headwinds in the North America large client advertising business and an approximately $20 million-$25 million impact from the geopolitical headwinds in the Middle East experienced during March. Global impression volume increased approximately 17% year-over-year, while total eCPMs declined approximately 12% year-over-year. These dynamics are driven by the rapid growth in Sponsored Snaps, as well as a mix shift in impression delivery towards Spotlight. These factors are driving strong impression growth and improved advertiser performance, but have created a near-term revenue headwind as we work to build demand for these newer services and ad units. We believe these dynamics are positive for the long-term health of the platform as improved pricing and performance are key inputs to building demand over time. Adjusted cost of revenue was $662 million in Q1, up 4% year-over-year. Total infrastructure costs were $401 million in Q1, up 7% year-over-year, driven primarily by community growth, strategic investments in AI model training, and monetization serving costs. The remaining components of adjusted cost of revenue were $261 million in Q1 or 17% of revenue, which is in line with our full year cost structure guidance range, an improvement of 2 percentage points year-over-year. These operational efficiencies contributed to adjusted gross margin improving 3 percentage points year-over-year to reach 57% in Q1, which we believe puts us on track for achieving our goal of 60% or better for fiscal 2026. Adjusted operating expenses were $633 million in Q1, up 2% year-over-year. The growth was driven primarily by a 7% increase in personnel costs, which was partially offset by reductions in community growth marketing as we continued to calibrate investments in community growth with the long-term monetization potential of each geography. Adjusted EBITDA was $233 million in Q1, an improvement of $125 million compared to the prior year. Adjusted EBITDA flow through, or the percentage of year-over-year revenue growth that flowed through to adjusted EBITDA, was 75% in Q1. We view this elevated flow through as a clear demonstration of our pivot to profitability becoming evident in our financial results. Net loss was $89 million in Q1 compared to $140 million in the prior year. The $51 million year-over-year improvement largely reflects the flow-through of the $125 million improvement in adjusted EBITDA, partially offset by a $49 million gain on debt extinguishment recognized in the prior year and a $24 million increase in net interest expense due to the high-yield notes issued in the prior year. Stock-based compensation and related payroll expenses were $263 million in Q1, which represents a modest decline year-over-year. We are focused on reducing SBC as a percentage of revenue and limiting dilution through disciplined equity compensation and opportunistic repurchases. We continued to manage our share count carefully with $350 million in share repurchases completed in Q1, which helped limit share count growth to 3.5%. We ended Q1 with approximately $2.8 billion in cash and marketable securities and had $400 million remaining in our previously authorized share repurchase program as of the end of Q1. Free cash flow was $286 million in Q1 while operating cash flow was $327 million. Over the trailing 12 months, free cash flow was $609 million and operating cash flow was $831 million as we continue to execute on translating top line growth into sustained growth in cash flow. Taken together, we believe our Q1 financial results provide early proof points that continued revenue diversification and improved cost discipline will support a more durable and profitable business over time. We also recognize that investor expectations are increasingly centered on the pace at which this progress translates into meaningful GAAP earnings. In April, we took the difficult but necessary action to make Snap a faster, more focused, and more efficient company. As a result, we expect to reduce our annualized cost structure by more than $500 million in the second half of 2026. We believe these actions establish a clearer path to net income profitability while prioritizing investment in the highest conviction opportunities across Snap. As we move into Q2, we remain focused on accelerating our top line, growing our community, deepening engagement, improving financial efficiency, and advancing toward the commercial launch of Specs later this year. Our guidance range for revenue in Q2 is $1.52 billion-$1.55 billion. Our revenue guidance range assumes no contribution from Perplexity as we amicably ended the relationship in Q1. Our guidance range also assumes that the operating environment in the Middle East region remains consistent relative to the magnitude of the headwinds we have experienced in March and April. Caution that the trajectory of the geopolitical situation in the region is uncertain. On the cost side, we anticipate that infrastructure costs will grow modestly year-over-year in Q2 while remaining on track toward our full year cost structure guidance. All other cost of revenue is expected to remain in line with our full year cost structure guidance at 16%-17% of revenue in Q2. From a personnel cost perspective, our recently announced restructuring will have a partial period benefit in Q2 while the reduction in our adjusted operating expenses and SBC will be more fully reflected in Q3 and beyond. As a result, we estimate that adjusted EBITDA will be between $175 million and $200 million in Q2. We also anticipate that we will incur pre-tax restructuring charges of between $95 million and $130 million related to our recent restructuring and that the majority of these costs will be incurred in Q2, which will be a headwind to net income in this period. Lastly, we continue to monitor the evolving legal and regulatory landscape in the U.S. and internationally. Areas of focus include age assurance, data use, privacy, advertising practices, and online safety. While outcomes remain uncertain, these developments may result in changes to our products and business practices, which could increase compliance and legal costs over time and may also impact user growth and engagement. Thank you. We will now take your questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. In the interest of time, we ask that you please limit yourself to one question. After your initial question is asked, your line will be muted. At this time, we will pause momentarily to assemble our roster. The first question comes from Ross Sandler with Barclays. You may proceed. Hey, guys. The 2Q revenue guidance has a couple-point acceleration baked in at the high end. Just curious, given what you said about the Middle East, what's driving that potential improving growth rate? Is it the Ad business? Is it Snapchat+? Any additional color there. Evan, I'm sure you guys saw the 70-page activist deck that was released. I'm just curious to get your take on some of the suggestions that were in that around cost improvement, monetization, and governance. Just curious your take on that. Thanks a lot. Hi, Ross. It's Derek speaking. I'll take the first one there on the guide. Probably worthwhile just to take a minute to contextualize the growth rates in Q1 and what we're expecting in Q2. In Q1, a couple of different factors there on the growth rate. One is we had about a 2-point FX tailwind, we also had the impact of the conflict in the Middle East that really impacted the business in March. Those two essentially largely washed with the headwind on the Middle East side being similar. That left us with a 12% growth rate, which was a 2 percentage point acceleration over Q4 and at the very high end of our guidance range with the strength there driven largely by the Subscription business and the momentum we saw there in Q1. As we move into Q2, there are again a few different factors there. You know, one, the comps on the growth rate in the prior year are a tailwind into Q2, of approximately 5 points from the prior year. That's essentially fully offset by, one, what we expect will be a diminished FX tailwind going from about 2 to about 1 points approximately. Also, we expect that the headwinds that we're seeing from the conflict in the Middle East will be a full quarter impact in Q2, relative to a single month impact in Q1. Those two factors combined offset the comp. With those factors set aside, you're really left with a 2-point acceleration at the midpoint of the guide relative to Q1, and that I would attribute to the strength that we are seeing in the North America Ads business. We've been talking for some time about the improvements in pricing and yields that advertisers are enjoying there and the progress we've made with the ad platform and improving ROAS that folks are seeing there. We saw that translate into really improved upfront commitments in Q1. We talked about that in the letter being up about 10% year-over-year, which is encouraging. That's starting to show up in the top line, and that gave us the confidence to put that into the guide for Q2 with an acceleration there driven largely by the North America Ads business and the guidance there. Hopefully that gives you good context on what we're seeing there from quarter-to-quarter and what's driving the acceleration. Hey, Ross, it's Evan. Thanks so much for the question. You know, we're really grateful obviously, from input from our shareholders, and I think we've taken some strong actions already, you know, to operate with better discipline, to improve profitability and sharpen capital allocation. Fundamentally, we think our job is to operate the business in the long-term interests of our shareholders, and we're gonna continue to invest against our core long-term opportunity. Thank you. The next question comes from Michael Nathanson with MoffettNathanson. You may proceed. Thanks. I have two for either of you guys. One is, you know, we cover Roku and CTV, and what we've seen happen is, as Roku has added third-party DSPs, they've been able to really accelerate ad growth because the walled gardens are hard to compete against. I wondered, have you thought about it, contemplated the idea of perhaps opening your inventory up to more sellers on the DSP side to encourage more density in the auctions? You know, why or why not? Then on Snapchat+, it's impressive what you guys are doing. Is there any color you could give us on who these users are? Where they're coming from? And kind of just the pricing dynamics that you've seen in terms of ability to what do you think your profitability is to raise price here? Anything you'd give us on color on the sustainability of Snapchat+ would be great. Thanks. Yeah, thanks so much for the question. You know, I think on the DSP side, we've just always believed that the advertiser relationship is very important strategically, especially as we've diversified with small and medium customers and focused more on lower funnel objectives. I do think to your point, there may be some opportunity around upper funnel video demand that, you know, we've been considering, but we'd have to really carefully think through the channel conflict and how to grow that demand while continuing to build strong direct advertiser relationships. I do think scaling through partners is important and, you know, as Derek mentioned, we do see some opportunity with agencies and by working more closely with them. We are, you know, pleased to see the growth in those upfront commitments. On Snapchat+, you know, obviously the growth is really exciting. I think there are a couple different ways to look at the long-term opportunity. One is, you know, increased tiers of Snapchat+. We've seen some strong momentum with Lens+, which is really anchored around our AI creative and editing tools in the camera. That I think could be a big, you know, opportunity for us long term. It's obviously a higher-priced offering. I think there's some real customer value there, obviously with our strength in the camera and our lens ecosystem. Tiering, I think is certainly one approach. You know, we just continue to see growth as we roll out new features. We've got a community that really loves our product, that's constantly asking for new and differentiated ways to use Snapchat. As we respond to those requests and continue to build out new features, you know, that tends to drive subscriber growth. You know, with the introduction of Memories, we have seen overall retention for Snapchat+ improve as well. That, you know, is helping as we look at just the long-term growth and durability of the subscription product. Thank you. The next question comes from Doug Anmuth with JPMorgan. You may proceed. Hi, this is Maggie on for Doug. Thanks for taking the question. I was wondering if you can just talk a bit more about the broader opportunity you see with AI Sponsored Snaps, sort of what you're hearing from advertisers in terms of overall interest in something like this. Thank you. Hey, thanks, Maggie. You know, advertiser feedback has been really positive, I think mostly because Sponsored Snaps are showing that chat can be monetized in a way that's really native to Snapchat. Brands are loving this combination of very high reach and high attention, especially because Chat is such a high-frequency behavior on Snapchat throughout the day. I think what's important for us strategically is that Chat's not just another inventory pool. It really gives us a differentiated environment where brands can engage users in, you know, a more direct and more personal way. AI Sponsored Snaps are really an extension of that because they can make those interactions and those conversations more useful and more relevant over time. I think just, you know, looking forward, the roadmap is really about just careful, you know, expansion of capability, improving demand and yield, obviously, with Sponsored Snaps, adding more direct response features, then, you know, continuing to work with new partners like Experian to evolve the AI Sponsored Snap product. Thank you. The next question comes from Rich Greenfield with LightShed Partners. You may proceed. Hey, thanks for taking the question. you know Evan, it looks like your North American Ad business was down, you know, call it about 7% with the growth really, the overall growth driven by subscription. I'm wondering how much of that downdraft in ad revenue is being caused by the drop in North American DAUs versus the transition that you and Derek talked about towards performance advertising. Fundamentally, can you grow North American ad revenue without reversing the trend in users? And I guess related to that, just given the growth that everyone is excited about on the subscription side of the business, how are you balancing your own time and focus on the Subscription business versus the Ad business overall? Yeah. Hey, thanks, Rich. I think, you know, at a high level, just looking at the North America DAU trend, it has been improving over the past two quarters after we pulled back on broad-based user acquisition spend. You know, I think we currently forecast something like a decline of 1 million daily active users in North America in Q2, but we also see a path to flat quarter-over-quarter if we can continue to land product improvements. I think, you know, more interestingly, though, under the hood, monetizable daily active users, meaning users who, you know, see an ad or make an in-app purchase or have a subscription, they've actually grown in North America and the U.S. over the past two years, with a meaningful increase, obviously, with the launch of Sponsored Snaps, which really extended ad reach into the messaging surface. Overall, the monetizable user trends have been improving while the North America large customer business, you know, has struggled and put some downward pressure on the overall Ad business. What has been encouraging to see is that the North America SMB business grew approximately 30% year-over-year in Q1. There's some nice momentum in the North America SMB business. We have seen some modest improvement, as Derek said, in the large customer segment. We're very focused on that large customer segment, especially around upper funnel brand advertising and, you know, with new leaders in place, with the team working more effectively together, you know, we'd really like to see some more progress there as we work through the year. You know, the direct revenue opportunity is a very large opportunity for us, you know, just given the frequency of use and the passion, you know, that our community, you know, really has for Snapchat. You know, we're continuing to develop the product offering. It's something we love to do. You know, as I mentioned, creating new tiers as well, which, you know, we think can contribute to increasing overall subscription ARPU. Thank you. The following comes from Nitin Bansal with Bank of America. You may proceed. Thank you for taking my question. Snapchat+ subscriber growth and revenue growth has remained quite strong. You mentioned Memories and Lens+ as like the key drivers behind the recent strength. Can you talk about, like, how sustainable do you believe the current growth trajectory is over the medium term, and whether you see any additional opportunities to deepen monetization and retention as the feature set continues to expand? Thank you. Yeah. We're really excited about the growth in direct revenue, and we do think the Subscription business and In-App Purchases as well can continue to contribute to our overall revenue growth. I think, you know, the importance for us is really just focusing on the user experience, making sure we're really delivering things that folks view as valuable to their overall product experience. I think recent additions like Creator Subscriptions, for example, both strengthen the content ecosystem by building, you know, deeper relationships between users and creators, creating new ways for creators to monetize, and obviously contributing to the overall direct revenue business. Lens+. I already mentioned, but I think is a really meaningful opportunity just given the excitement and momentum we see around AI creative tools and AI editing for images and videos. We certainly think that that could help, as, you know, drive ARPU higher over time. You know, the core Snapchat+ offering is really important to us, and I think we've been excited to see that folks who have entered through that Memories Storage entry point, you know, selecting into Snapchat+ to get those additional features, and that's also been a tailwind as well. Thank you. The next question comes from Mark Shmulik with Bernstein. You may proceed. Yes, thanks for taking the question. Evan, sorry, just another one on direct revenue, but, you know, I've kind of always come back to that kind of quote, you know, "It may not be the business you set out to kinda go after, but might be the one you're best suited to deliver." You know, when you look at kind of the torque and acceleration in that and the imminent kind of launch of Specs, is there a different way to think about what Snapchat looks like 12, 24 months from now that, you know, may be quite different than what you were thinking of six, 12 months ago? Hey, Mark. Yeah, I think that's a really inspiring question, something we've thought a lot about. Obviously, we worked on Specs for, I think, something like 12 years now. We really have believed that we can innovate and build awesome products for our community that they wanna buy. I think seeing that reflected in the direct revenue business and in Snapchat+ has really built a lot more confidence, you know, in the team because we love to innovate for our community. I think, you know, being able to demonstrate that our community's willing to pay for that innovation, I think, really bodes well for the future of the platform and the future of Specs. Certainly a lot of opportunity there. We're really excited to have more diversified revenue. Obviously, the growth has been fantastic, and it should just, you know, help us create a much more resilient business over time. Thank you. The next question comes from Eric Sheridan with Goldman Sachs. You may proceed. Thanks so much for taking the question. Maybe building on that answer, Evan, can you talk a little bit about some of the execution pieces that still have to be put in place as you look towards the remainder of this year with respect to the Specs rollout? Can you also talk to the Qualcomm collaboration, and how to think about what that means for where you wanna go as a platform and an ecosystem going forward? Lastly, just how should we be thinking about agentic AI as sort of an interface for Specs over the maybe into long term as well? Thanks so much. Yeah, there a lot of great questions in there, probably could talk for hours about that. I think, you know, just looking ahead to the launch of Specs later this year, it's just all hands on deck to execute, deliver an amazing product experience. We hope folks will join us at AWE on June 16th. We'll have more to share, you know, on our progress on Specs. Certainly we are spending a lot of time on the long-term roadmap there as well. As you mentioned, you know, the way that people are using their computers is changing really dramatically, I think that that's gonna be evident, you know, in the adoption of wearables and the adoption of Specs over time. People are gonna spend less time hunched over their computers or their phones, typing away on keyboards, and spend more time supervising agents who are doing that work on their behalf. We actually had a team member who, with AI, built out a pretty cool lens called Agent Center where you can, you know, oversee and manage your agents through Specs, you know, with the current developer version of the glasses. Which is a pretty cool way, you know, to stay on top of what your agents are getting done for you without carrying your laptop around. Certainly, I think a lot of opportunity there, and the way that people are using computing is changing so fundamentally in so many ways at this moment. We're just so excited to get this product out into the world soon. Thank you. Our last question comes from Dan Salmon with New Street Research. You may proceed. Great. Good afternoon, everyone. Evan, can we hear maybe a little update on how you and the company are addressing various pieces of legislation and litigation around the world regarding potential restrictions on teen social media and oftentimes mobile phone use as well? Just love to hear a little bit more about age verification work, including with the App Stores, how your legal and policy teams are approaching the issue as it evolves in different jurisdictions, and how you and the team are planning for different ranges of potential outcomes. Thanks. Thanks so much for the question. It's certainly something we care a lot about, and we invest deeply, you know, in keeping people safe on Snapchat. You know, we're thinking a lot about how we continue to evolve the platform. I think one of the biggest challenges we face is that we often get lumped in with social media, even though Snapchat's really different. It's focused on communication, especially between friends and family, and we see that validated in third-party research that continues to show that Snapchat can have a positive impact on well-being and on relationships. We really are, you know, proud of the positive impact that we can play in people's lives, and we have to do a lot of work to continue differentiating ourselves from more traditional social media platforms. I think age assurance is certainly, you know, an important issue for us. It's something that we're, you know, continuing to improve on the platform. We did integrate with Apple's new offering. Unfortunately, that offering requires users to essentially agree to share their age with Snapchat rather than being something that's on by default. That does, in some ways, limit its usefulness. We are exploring other, you know, additional age assurance practices. You know, we've implemented things like facial scanning or ID verification in Australia, and that's something we may roll out more broadly, you know, as things progress through the year. This concludes our question-and-answer session, as well as Snap Inc's first quarter 2026 earnings conference call. Thank you for attending today's session. You may now disconnect.

Speaker 10: Good afternoon, everyone, and welcome to Snap Inc's first quarter 2026 earnings conference call. At this time, participants are in a listen-only mode. I would now like to turn the call over to David Ometer, Head of Investor Relations. Good afternoon, everyone, and welcome to Snap Inc's first quarter 2026 earnings conference call. good afternoon everyone and welcome to snap inc's first quarter 2026 earnings conference call At this time, participants are in a listen-only mode. at this time participants are in a listen-only mode I would now like to turn the call over to David Ometer, Head of Investor Relations. i would now like to turn the call over to david ometer head of investor relations

Speaker 2: Thank you. Good afternoon, everyone. Welcome to Snap's first quarter 2026 earnings conference call. With us today are Evan Spiegel, Chief Executive Officer and Co-Founder, and Derek Andersen, Chief Financial Officer. Please refer to our investor relations website at investor.snap.com to find today's press release, earnings slides, and investor letter. This conference call includes forward-looking statements which are based on our assumptions as of today. Actual results may differ materially from those expressed in these forward-looking statements. We make no obligation to update our disclosures. For more information about factors that may cause actual results to differ materially from these forward-looking statements, please refer to the press release we issued today, as well as risks described in our most recent Form 10-K or Form 10-Q, particularly in the section titled Risk Factors. Today's call will include both GAAP and non-GAAP measures. Thank you. thank you Good afternoon, everyone. good afternoon everyone Welcome to Snap's first quarter 2026 earnings conference call. welcome to snap's first quarter 2026 earnings conference call With us today are Evan Spiegel, Chief Executive Officer and Co-Founder, and Derek Andersen, Chief Financial Officer. with us today are evan spiegel chief executive officer and co-founder and derek andersen chief financial officer Please refer to our investor relations website at investor.snap.com to find today's press release, earnings slides, and investor letter. please refer to our investor relations website at investor.snap.com to find today's press release earnings slides and investor letter This conference call includes forward-looking statements which are based on our assumptions as of today. this conference call includes forward-looking statements which are based on our assumptions as of today Actual results may differ materially from those expressed in these forward-looking statements. actual results may differ materially from those expressed in these forward-looking statements We make no obligation to update our disclosures. we make no obligation to update our disclosures For more information about factors that may cause actual results to differ materially from these forward-looking statements, please refer to the press release we issued today, as well as risks described in our most recent Form 10-K or Form 10-Q, particularly in the section titled Risk Factors. for more information about factors that may cause actual results to differ materially from these forward-looking statements please refer to the press release we issued today as well as risks described in our most recent form 10-k or form 10-q particularly in the section titled risk factors Today's call will include both GAAP and non-GAAP measures. today's call will include both gaap and non-gaap measures Reconciliations between the two can be found in today's press release. Please note that when we discuss all of our expense figures, they will exclude stock-based compensation and related payroll taxes, as well as depreciation and amortization and certain other items. Please refer to our filings with the SEC to understand how we calculate any of the metrics discussed on today's call. With that, I'd like to turn the call over to Evan. Reconciliations between the two can be found in today's press release. reconciliations between the two can be found in today's press release Please note that when we discuss all of our expense figures, they will exclude stock-based compensation and related payroll taxes, as well as depreciation and amortization and certain other items. please note that when we discuss all of our expense figures they will exclude stock-based compensation and related payroll taxes as well as depreciation and amortization and certain other items Please refer to our filings with the SEC to understand how we calculate any of the metrics discussed on today's call. please refer to our filings with the sec to understand how we calculate any of the metrics discussed on today's call With that, I'd like to turn the call over to Evan. with that i'd like to turn the call over to evan

Speaker 5: Hi, everyone, and welcome to our call. Last fall, we described a crucible moment for Snap and the imperative to grow our community and engagement, reaccelerate revenue growth, improve gross margins, and establish a clearer path to net income profitability. We made meaningful progress on each of these priorities in Q1. Hi, everyone, and welcome to our call. hi everyone and welcome to our call Last fall, we described a crucible moment for Snap and the imperative to grow our community and engagement, reaccelerate revenue growth, improve gross margins, and establish a clearer path to net income profitability. last fall we described a crucible moment for snap and the imperative to grow our community and engagement reaccelerate revenue growth improve gross margins and establish a clearer path to net income profitability We made meaningful progress on each of these priorities in Q1. we made meaningful progress on each of these priorities in q1 Q1 marked a return to growth in daily active users, reaching 483 million, while monthly active users grew to 956 million. Revenue increased 12% year-over-year to $1.53 billion, including a 3% year-over-year increase in Advertising revenue to $1.24 billion and an 87% year-over-year increase in other revenue to $285 million. Net loss improved to $89 million. Operating cash flow was $327 million. Free cash flow was $286 million. Adjusted EBITDA was $233 million. These results indicate that we are closing the gap between engagement and monetization while converting revenue growth into a more durable path towards GAAP profitability. As we look ahead, our priorities are clear. Q1 marked a return to growth in daily active users, reaching 483 million, while monthly active users grew to 956 million. q1 marked a return to growth in daily active users reaching 483 million while monthly active users grew to 956 million Revenue increased 12% year-over-year to $1.53 billion, including a 3% year-over-year increase in Advertising revenue to $1.24 billion and an 87% year-over-year increase in other revenue to $285 million. revenue increased 12% year-over-year to $1.53 billion including a 3% year-over-year increase in advertising revenue to $1.24 billion and an 87% year-over-year increase in other revenue to $285 million Net loss improved to $89 million. net loss improved to $89 million Operating cash flow was $327 million. operating cash flow was $327 million Free cash flow was $286 million. free cash flow was $286 million Adjusted EBITDA was $233 million. adjusted ebitda was $233 million These results indicate that we are closing the gap between engagement and monetization while converting revenue growth into a more durable path towards GAAP profitability. these results indicate that we are closing the gap between engagement and monetization while converting revenue growth into a more durable path towards gaap profitability As we look ahead, our priorities are clear. as we look ahead our priorities are clear First, grow our community and deepen engagement across Snapchat with a focus on highly monetizable geographies. Second, accelerate and diversify revenue growth. Third, build a more profitable and cash generative core business while investing with discipline in Specs and our long-term opportunity in intelligent eyewear. Our first priority is growing our community and deepening engagement by making Snapchat the best place to communicate with close friends and family. Engagement on our platform is built around relationships. People use Snapchat to talk to their friends, to express themselves visually, to share what they're seeing, and to stay connected to what is happening around them. That is why we continue to believe that our communication service is our strongest long-term advantage. In Q1, we continued to invest in new conversation starters to make communicating with friends easier and more fun. First, grow our community and deepen engagement across Snapchat with a focus on highly monetizable geographies. first grow our community and deepen engagement across snapchat with a focus on highly monetizable geographies Second, accelerate and diversify revenue growth. second accelerate and diversify revenue growth Third, build a more profitable and cash generative core business while investing with discipline in Specs and our long-term opportunity in intelligent eyewear. third build a more profitable and cash generative core business while investing with discipline in specs and our long-term opportunity in intelligent eyewear Our first priority is growing our community and deepening engagement by making Snapchat the best place to communicate with close friends and family. our first priority is growing our community and deepening engagement by making snapchat the best place to communicate with close friends and family Engagement on our platform is built around relationships. engagement on our platform is built around relationships People use Snapchat to talk to their friends, to express themselves visually, to share what they're seeing, and to stay connected to what is happening around them. people use snapchat to talk to their friends to express themselves visually to share what they're seeing and to stay connected to what is happening around them That is why we continue to believe that our communication service is our strongest long-term advantage. that is why we continue to believe that our communication service is our strongest long-term advantage In Q1, we continued to invest in new conversation starters to make communicating with friends easier and more fun. in q1 we continued to invest in new conversation starters to make communicating with friends easier and more fun Topic Chats, which allow Snapchatters to participate in public conversations around trending topics and events, gained momentum as we broadened the rollout in Q1. For example, the March Madness Topic Chat was one of the most active real-time group chats, with more than 90,000 messages sent and peak concurrent participation exceeding 40,000 people. Games are also emerging as a popular conversation starter, with new two-player turn-based experiences creating low-friction ways for friends and family to connect. We also added new entry points for Games in Q1 to improve discovery, contributing to Games reaching 255 million monthly active users. In addition, we enhanced our messaging infrastructure by improving notification timeliness and relevance, and by making it easier for Snapchatters to seamlessly share content into conversations. Topic Chats, which allow Snapchatters to participate in public conversations around trending topics and events, gained momentum as we broadened the rollout in Q1. topic chats which allow snapchatters to participate in public conversations around trending topics and events gained momentum as we broadened the rollout in q1 For example, the March Madness Topic Chat was one of the most active real-time group chats, with more than 90,000 messages sent and peak concurrent participation exceeding 40,000 people. for example the march madness topic chat was one of the most active real-time group chats with more than 90,000 messages sent and peak concurrent participation exceeding 40,000 people Games are also emerging as a popular conversation starter, with new two-player turn-based experiences creating low-friction ways for friends and family to connect. games are also emerging as a popular conversation starter with new two-player turn-based experiences creating low-friction ways for friends and family to connect We also added new entry points for Games in Q1 to improve discovery, contributing to Games reaching 255 million monthly active users. we also added new entry points for games in q1 to improve discovery contributing to games reaching 255 million monthly active users In addition, we enhanced our messaging infrastructure by improving notification timeliness and relevance, and by making it easier for Snapchatters to seamlessly share content into conversations. in addition we enhanced our messaging infrastructure by improving notification timeliness and relevance and by making it easier for snapchatters to seamlessly share content into conversations Our community is increasingly using content sharing as a conversation starter, and Spotlight is playing an important role in recommending more shareable content. In Q1 2026, Spotlight shares and reposts grew 62% year-over-year globally and 124% year-over-year in the U.S. Our focus on prioritizing authentic content created using the Snapchat Camera and our investments in the Creator experience are driving Spotlight posts, contributing to nearly 74% year-over-year growth in Spotlight posters in the U.S. and over 61% globally. These efforts, combined with continued investment in resulted in higher engagement, with total time spent watching Spotlight increasing 11% year-over-year. Our augmented reality and Lens ecosystem continues to play an important role in enhancing communication and self-expression on Snapchat. Our community is increasingly using content sharing as a conversation starter, and Spotlight is playing an important role in recommending more shareable content. our community is increasingly using content sharing as a conversation starter and spotlight is playing an important role in recommending more shareable content In Q1 2026, Spotlight shares and reposts grew 62% year-over-year globally and 124% year-over-year in the U.S. in q1 2026 spotlight shares and reposts grew 62% year-over-year globally and 124% year-over-year in the u.s Our focus on prioritizing authentic content created using the Snapchat Camera and our investments in the Creator experience are driving Spotlight posts, contributing to nearly 74% year-over-year growth in Spotlight posters in the U.S. and over 61% globally. our focus on prioritizing authentic content created using the snapchat camera and our investments in the creator experience are driving spotlight posts contributing to nearly 74% year-over-year growth in spotlight posters in the u.s and over 61% globally These efforts, combined with continued investment in resulted in higher engagement, with total time spent watching Spotlight increasing 11% year-over-year. these efforts combined with continued investment in resulted in higher engagement with total time spent watching spotlight increasing 11% year-over-year Our augmented reality and Lens ecosystem continues to play an important role in enhancing communication and self-expression on Snapchat. our augmented reality and lens ecosystem continues to play an important role in enhancing communication and self-expression on snapchat More than 75% of Snapchatters are engaging with augmented reality every day on average, and our community uses Lenses in our Snapchat Camera 9 billion times per day on average. AI-powered Lens creation is transforming our AR ecosystem, with more than 400,000 Lenses submitted in Q1, increasing more than 150% year-over-year. The significant growth this quarter was driven primarily by the adoption of new Lens creation tools such as Easy Lens, our free tool designed to make Lens creation simpler, more fun, and more personal. The Map continues to play a growing role as a way to stay up-to-date with friends and discover new places. More than 75% of Snapchatters are engaging with augmented reality every day on average, and our community uses Lenses in our Snapchat Camera 9 billion times per day on average. more than 75% of snapchatters are engaging with augmented reality every day on average and our community uses lenses in our snapchat camera 9 billion times per day on average AI-powered Lens creation is transforming our AR ecosystem, with more than 400,000 Lenses submitted in Q1, increasing more than 150% year-over-year. ai-powered lens creation is transforming our ar ecosystem with more than 400,000 lenses submitted in q1 increasing more than 150% year-over-year The significant growth this quarter was driven primarily by the adoption of new Lens creation tools such as Easy Lens, our free tool designed to make Lens creation simpler, more fun, and more personal. the significant growth this quarter was driven primarily by the adoption of new lens creation tools such as easy lens our free tool designed to make lens creation simpler more fun and more personal The Map continues to play a growing role as a way to stay up- to- date with friends and discover new places. the map continues to play a growing role as a way to stay up- to- date with friends and discover new places With more than 450 million global monthly active users in Q1, we believe that the Snap Map is the world's most personal map, continually adapting to highlight the friends, places, and real-world experiences that matter most to Snapchatters. As we layer in richer content and local signals, we see Snap Map developing into a powerful platform for connecting our community with places and services in the physical world, creating a durable foundation for local commerce and advertising over time. The innovation we delivered across new conversation starters, content sharing, Lenses, and Snap Map all contributed to the growth in our global community in Q1, with global daily active users and monthly active users both growing 5% year-over-year in Q1. Advertising execution improved in Q1, led by continued strength with SMBs and better performance across our lower funnel products. With more than 450 million global monthly active users in Q1, we believe that the Snap Map is the world's most personal map, continually adapting to highlight the friends, places, and real-world experiences that matter most to Snapchatters. As we layer in richer content and local signals, we see Snap Map developing into a powerful platform for connecting our community with places and services in the physical world, creating a durable foundation for local commerce and advertising over time. with more than 450 million global monthly active users in q1 we believe that the snap map is the world's most personal map continually adapting to highlight the friends places and real-world experiences that matter most to snapchatters. as we layer in richer content and local signals we see snap map developing into a powerful platform for connecting our community with places and services in the physical world creating a durable foundation for local commerce and advertising over time The innovation we delivered across new conversation starters, content sharing, Lenses, and Snap Map all contributed to the growth in our global community in Q1, with global daily active users and monthly active users both growing 5% year-over-year in Q1. the innovation we delivered across new conversation starters content sharing lenses and snap map all contributed to the growth in our global community in q1 with global daily active users and monthly active users both growing 5% year-over-year in q1 Advertising execution improved in Q1, led by continued strength with SMBs and better performance across our lower funnel products. advertising execution improved in q1 led by continued strength with smbs and better performance across our lower funnel products Large advertisers in North America remained a headwind, but we are beginning to see early signs of improvement as performance gains are more fully reflected in third-party measurement systems and as newer inventory in Chat is more widely adopted. Our focus is on three priorities: improving performance and measurement across the core ad platform, expanding new inventory, and translating those gains into broader advertiser adoption and larger commitments. First, we continue to make meaningful progress improving performance across our core direct response products. Growth in Q1 was led by lower funnel solutions and by performance-oriented advertisers responding to stronger ROI. Dynamic Product Ads revenue grew more than 30% year-over-year, while adoption among small and medium-sized customers more than doubled. We also saw strong momentum in App Advertising, where goal-based bidding revenue grew 27% year-over-year, and App Purchases revenue grew 87% year-over-year. Large advertisers in North America remained a headwind, but we are beginning to see early signs of improvement as performance gains are more fully reflected in third-party measurement systems and as newer inventory in Chat is more widely adopted. large advertisers in north america remained a headwind but we are beginning to see early signs of improvement as performance gains are more fully reflected in third-party measurement systems and as newer inventory in chat is more widely adopted Our focus is on three priorities: improving performance and measurement across the core ad platform, expanding new inventory, and translating those gains into broader advertiser adoption and larger commitments. our focus is on three priorities improving performance and measurement across the core ad platform expanding new inventory and translating those gains into broader advertiser adoption and larger commitments First, we continue to make meaningful progress improving performance across our core direct response products. first we continue to make meaningful progress improving performance across our core direct response products Growth in Q1 was led by lower funnel solutions and by performance-oriented advertisers responding to stronger ROI. growth in q1 was led by lower funnel solutions and by performance-oriented advertisers responding to stronger roi Dynamic Product Ads revenue grew more than 30% year-over-year, while adoption among small and medium-sized customers more than doubled. dynamic product ads revenue grew more than 30% year-over-year while adoption among small and medium-sized customers more than doubled We also saw strong momentum in App Advertising, where goal-based bidding revenue grew 27% year-over-year, and App Purchases revenue grew 87% year-over-year. we also saw strong momentum in app advertising where goal-based bidding revenue grew 27% year-over-year and app purchases revenue grew 87% year-over-year Across Pixel Purchase campaigns, 7-0 purchases generated per dollar of revenue grew more than 23% year-over-year, which we view as a sign that conversion efficiency is improving. These gains are being driven by continued progress in AI, ranking, retrieval, and automation across the ad platform. Nearly 70% of advertising spend now use at least one of our AI-powered automation solutions, including Smart Audience, Smart Budget, or Smart Placement, which gives us confidence that these improvements are benefiting a broad share of the business. In Q1, we launched LLM-based user intent understanding for Dynamic Product Ads retrieval, which improved Pixel Purchase conversions by more than 2% and multimodal similar product retrieval using a vision language model fine-tuned on Snap data, which delivered an additional high-single-digit lift in DPA purchase conversions. Across Pixel Purchase campaigns, 7-0 purchases generated per dollar of revenue grew more than 23% year-over-year, which we view as a sign that conversion efficiency is improving. across pixel purchase campaigns 7-0 purchases generated per dollar of revenue grew more than 23% year-over-year which we view as a sign that conversion efficiency is improving These gains are being driven by continued progress in AI, ranking, retrieval, and automation across the ad platform. these gains are being driven by continued progress in ai ranking retrieval and automation across the ad platform Nearly 70% of advertising spend now use at least one of our AI-powered automation solutions, including Smart Audience, Smart Budget, or Smart Placement, which gives us confidence that these improvements are benefiting a broad share of the business. nearly 70% of advertising spend now use at least one of our ai-powered automation solutions including smart audience smart budget or smart placement which gives us confidence that these improvements are benefiting a broad share of the business In Q1, we launched LLM-based user intent understanding for Dynamic Product Ads retrieval, which improved Pixel Purchase conversions by more than 2% and multimodal similar product retrieval using a vision language model fine-tuned on Snap data, which delivered an additional high- single-digit lift in DPA purchase conversions. in q1 we launched llm-based user intent understanding for dynamic product ads retrieval which improved pixel purchase conversions by more than 2% and multimodal similar product retrieval using a vision language model fine-tuned on snap data which delivered an additional high- single-digit lift in dpa purchase conversions We also upgraded our App Re-engagement model with stronger foundational user embeddings and a new multitask architecture, increasing purchase conversions by approximately 2% while improving CPA by nearly 9%. Together, these changes are making the platform more effective at matching the right advertiser, product, and creative with the right Snapchatter at the right moment. Measurement remains a critical priority, particularly for large advertisers and agencies. It is not enough for our internal systems to show better performance. Those gains need to be reflected in the third-party measurement tools advertisers use to evaluate spend and allocate budgets. Over the past year, we have made progress closing long-standing measurement gaps so that external systems more accurately reflect the performance we are delivering. We also upgraded our App Re-engagement model with stronger foundational user embeddings and a new multitask architecture, increasing purchase conversions by approximately 2% while improving CPA by nearly 9%. we also upgraded our app re-engagement model with stronger foundational user embeddings and a new multitask architecture increasing purchase conversions by approximately 2% while improving cpa by nearly 9% Together, these changes are making the platform more effective at matching the right advertiser, product, and creative with the right Snapchatter at the right moment. together these changes are making the platform more effective at matching the right advertiser product and creative with the right snapchatter at the right moment Measurement remains a critical priority, particularly for large advertisers and agencies. measurement remains a critical priority particularly for large advertisers and agencies It is not enough for our internal systems to show better performance. it is not enough for our internal systems to show better performance Those gains need to be reflected in the third-party measurement tools advertisers use to evaluate spend and allocate budgets. those gains need to be reflected in the third-party measurement tools advertisers use to evaluate spend and allocate budgets Over the past year, we have made progress closing long-standing measurement gaps so that external systems more accurately reflect the performance we are delivering. over the past year we have made progress closing long-standing measurement gaps so that external systems more accurately reflect the performance we are delivering According to Measured, median iROAS on Snapchat grew 104% from the April through September 2025 test period to the October 2025 through March 2026 test period. This matters because larger advertisers typically move budgets only after platform improvements are validated externally. Second, we are expanding new inventory in places where Snapchatters are already taking action. Sponsored Snaps continues to demonstrate the potential of bringing brands into the Chat experience in a way that feels native to Snapchat while also creating a meaningful new surface for performance advertising. We are scaling this surface carefully with a focus on preserving the quality and frequency of close-friend communication. In Q1, nearly 75% of U.S. Chat daily active users viewed ads in Chat, and roughly 1/3 of Sponsored Snaps reach was unique to Chat, clearly demonstrating that Chat is driving meaningful incremental reach. According to Measured, median iROAS on Snapchat grew 104% from the April through September 2025 test period to the October 2025 through March 2026 test period. This matters because larger advertisers typically move budgets only after platform improvements are validated externally. Second, we are expanding new inventory in places where Snapchatters are already taking action. according to measured median iroas on snapchat grew 104% from the april through september 2025 test period to the october 2025 through march 2026 test period. this matters because larger advertisers typically move budgets only after platform improvements are validated externally. second we are expanding new inventory in places where snapchatters are already taking action Sponsored Snaps continues to demonstrate the potential of bringing brands into the Chat experience in a way that feels native to Snapchat while also creating a meaningful new surface for performance advertising. sponsored snaps continues to demonstrate the potential of bringing brands into the chat experience in a way that feels native to snapchat while also creating a meaningful new surface for performance advertising We are scaling this surface carefully with a focus on preserving the quality and frequency of close- friend communication. we are scaling this surface carefully with a focus on preserving the quality and frequency of close- friend communication In Q1, nearly 75% of U.S. in q1 nearly 75% of u.s Chat daily active users viewed ads in Chat, and roughly 1/3 of Sponsored Snaps reach was unique to Chat, clearly demonstrating that Chat is driving meaningful incremental reach. chat daily active users viewed ads in chat and roughly 1/3 of sponsored snaps reach was unique to chat clearly demonstrating that chat is driving meaningful incremental reach We are seeing encouraging performance from Sponsored Snaps. In Q1, per impression click-through rate improved 226%, and seven-day conversion volume increased 59%. While this remains an early opportunity, those results suggest that Chat can support both scale and measurable performance over time. Building on this momentum, we introduced AI Sponsored Snaps, a new format that enables brands to engage Snapchatters through interactive AI-powered conversations in Chat and extends our strategy of delivering more personalized, high-intent advertising experiences. We are also encouraged by the progress we are seeing with Promoted Places, which helps connect digital discovery on Snapchat with real-world action. Early campaigns generated more than 20 million incremental visits and double-digit growth in foot traffic. For example, Carl's Jr. achieved an 18% lift in incremental visits alongside gains in ad awareness and brand favorability. We are seeing encouraging performance from Sponsored Snaps. we are seeing encouraging performance from sponsored snaps In Q1, per impression click-through rate improved 226%, and seven-day conversion volume increased 59%. in q1 per impression click-through rate improved 226% and seven-day conversion volume increased 59% While this remains an early opportunity, those results suggest that Chat can support both scale and measurable performance over time. while this remains an early opportunity those results suggest that chat can support both scale and measurable performance over time Building on this momentum, we introduced AI Sponsored Snaps, a new format that enables brands to engage Snapchatters through interactive AI-powered conversations in Chat and extends our strategy of delivering more personalized, high-intent advertising experiences. building on this momentum we introduced ai sponsored snaps a new format that enables brands to engage snapchatters through interactive ai-powered conversations in chat and extends our strategy of delivering more personalized high-intent advertising experiences We are also encouraged by the progress we are seeing with Promoted Places, which helps connect digital discovery on Snapchat with real-world action. we are also encouraged by the progress we are seeing with promoted places which helps connect digital discovery on snapchat with real-world action Early campaigns generated more than 20 million incremental visits and double-digit growth in foot traffic. early campaigns generated more than 20 million incremental visits and double-digit growth in foot traffic For example, Carl's Jr. achieved an 18% lift in incremental visits alongside gains in ad awareness and brand favorability. for example carl's jr achieved an 18% lift in incremental visits alongside gains in ad awareness and brand favorability We believe products like Sponsored Snaps and Promoted Places can expand our lower funnel footprint over time by adding more differentiated inventory while creating more measurable outcomes for advertisers. Third, we are continuing to grow and diversify our advertiser base. Over the past three years, the number of current SMB advertisers on our platform has nearly tripled. In Q1, SMBs grew spend by more than 30% year-over-year in North America. SMBs accounted for more than 30% of global ad revenue and remained our largest ad growth driver for the seventh consecutive quarter. This continues to reflect strong product market fit in the segment, as well as the improvements we are making in onboarding, automation, and advertiser support. At the same time, large advertisers in North America remained a headwind to Advertising growth in Q1. We believe products like Sponsored Snaps and Promoted Places can expand our lower funnel footprint over time by adding more differentiated inventory while creating more measurable outcomes for advertisers. we believe products like sponsored snaps and promoted places can expand our lower funnel footprint over time by adding more differentiated inventory while creating more measurable outcomes for advertisers Third, we are continuing to grow and diversify our advertiser base. third we are continuing to grow and diversify our advertiser base Over the past three years, the number of current SMB advertisers on our platform has nearly tripled. over the past three years the number of current smb advertisers on our platform has nearly tripled In Q1, SMBs grew spend by more than 30% year-over-year in North America. in q1 smbs grew spend by more than 30% year-over-year in north america SMBs accounted for more than 30% of global ad revenue and remained our largest ad growth driver for the seventh consecutive quarter. smbs accounted for more than 30% of global ad revenue and remained our largest ad growth driver for the seventh consecutive quarter This continues to reflect strong product market fit in the segment, as well as the improvements we are making in onboarding, automation, and advertiser support. this continues to reflect strong product market fit in the segment as well as the improvements we are making in onboarding automation and advertiser support At the same time, large advertisers in North America remained a headwind to Advertising growth in Q1. at the same time large advertisers in north america remained a headwind to advertising growth in q1 We are not satisfied with that outcome, but we are beginning to see encouraging signs that this part of the business is improving. As measurement systems have time to reflect the performance gains we have delivered and as newer inventory becomes available at greater scale, we are seeing better traction with large customers. North America upfront commitments for 2026 grew approximately 10% year-over-year, which we view as an important sign that agencies and advertisers are increasingly willing to invest as performance and measurement improve. At the same time, we want to be clear that recovery among larger North American advertisers remains early and uneven. These customers typically make planning and investment decisions on quarterly or semi-annual cycles, which means revenue often lags underlying improvements in performance. Overall, Q1 marked important progress in strengthening the foundation of our Advertising business. We are not satisfied with that outcome, but we are beginning to see encouraging signs that this part of the business is improving. we are not satisfied with that outcome but we are beginning to see encouraging signs that this part of the business is improving As measurement systems have time to reflect the performance gains we have delivered and as newer inventory becomes available at greater scale, we are seeing better traction with large customers. as measurement systems have time to reflect the performance gains we have delivered and as newer inventory becomes available at greater scale we are seeing better traction with large customers North America upfront commitments for 2026 grew approximately 10% year-over-year, which we view as an important sign that agencies and advertisers are increasingly willing to invest as performance and measurement improve. At the same time, we want to be clear that recovery among larger North American advertisers remains early and uneven. north america upfront commitments for 2026 grew approximately 10% year-over-year which we view as an important sign that agencies and advertisers are increasingly willing to invest as performance and measurement improve. at the same time we want to be clear that recovery among larger north american advertisers remains early and uneven These customers typically make planning and investment decisions on quarterly or semi-annual cycles, which means revenue often lags underlying improvements in performance. these customers typically make planning and investment decisions on quarterly or semi-annual cycles which means revenue often lags underlying improvements in performance Overall, Q1 marked important progress in strengthening the foundation of our Advertising business. overall q1 marked important progress in strengthening the foundation of our advertising business We improved performance across key direct response products, made meaningful progress in measurement, and continued to scale new inventory that expands both reach and conversion opportunity. These gains are already driving stronger results with SMBs and performance advertisers, and we are beginning to see early signs that larger advertisers in North America are responding as well. While there is still work to do, we believe the progress we made in Q1 positions us well to drive broader adoption and more durable revenue growth over time. In Q1, we continued to diversify our top line with other revenue reaching $285 million, up 87% year-over-year and representing a 25 percentage point acceleration over the prior quarter growth rate. We improved performance across key direct response products, made meaningful progress in measurement, and continued to scale new inventory that expands both reach and conversion opportunity. we improved performance across key direct response products made meaningful progress in measurement and continued to scale new inventory that expands both reach and conversion opportunity These gains are already driving stronger results with SMBs and performance advertisers, and we are beginning to see early signs that larger advertisers in North America are responding as well. these gains are already driving stronger results with smbs and performance advertisers and we are beginning to see early signs that larger advertisers in north america are responding as well While there is still work to do, we believe the progress we made in Q1 positions us well to drive broader adoption and more durable revenue growth over time. while there is still work to do we believe the progress we made in q1 positions us well to drive broader adoption and more durable revenue growth over time In Q1, we continued to diversify our top line with other revenue reaching $285 million, up 87% year-over-year and representing a 25 percentage point acceleration over the prior quarter growth rate. in q1 we continued to diversify our top line with other revenue reaching $285 million up 87% year-over-year and representing a 25 percentage point acceleration over the prior quarter growth rate Memories Storage was an important driver of this acceleration, and we are encouraged to see that a larger than anticipated share of new subscribers acquired through Memories are choosing higher ARPU subscription offerings, including Snapchat+. This performance reflects the increasing value of our subscription products as we continue to introduce features that enhance the user experience and create differentiated value for our community. We view subscriptions as strategically important for three reasons. First, they deepen our direct relationship with Snapchatters. Second, they help diversify revenue by adding a business line that is less exposed to the advertising cycle. Third, they can be attractive from a margin and cash generation perspective as we scale. We are strengthening the long-term foundation of our subscription strategy by creating new subscription tiers and offerings, including Lens+. Memories Storage was an important driver of this acceleration, and we are encouraged to see that a larger than anticipated share of new subscribers acquired through Memories are choosing higher ARPU subscription offerings, including Snapchat+. memories storage was an important driver of this acceleration and we are encouraged to see that a larger than anticipated share of new subscribers acquired through memories are choosing higher arpu subscription offerings including snapchat+ This performance reflects the increasing value of our subscription products as we continue to introduce features that enhance the user experience and create differentiated value for our community. this performance reflects the increasing value of our subscription products as we continue to introduce features that enhance the user experience and create differentiated value for our community We view subscriptions as strategically important for three reasons. we view subscriptions as strategically important for three reasons First, they deepen our direct relationship with Snapchatters. first they deepen our direct relationship with snapchatters Second, they help diversify revenue by adding a business line that is less exposed to the advertising cycle. second they help diversify revenue by adding a business line that is less exposed to the advertising cycle Third, they can be attractive from a margin and cash generation perspective as we scale. third they can be attractive from a margin and cash generation perspective as we scale We are strengthening the long-term foundation of our subscription strategy by creating new subscription tiers and offerings, including Lens+. we are strengthening the long-term foundation of our subscription strategy by creating new subscription tiers and offerings including lens+ AI-powered Lens interactions are deepening user engagement and increasingly serving as a natural discovery layer for premium AI-powered experiences. Lens+ is emerging as a key extension of this strategy, offering subscribers access to exclusive Lenses and AI-powered features. Early traction has been encouraging, with Lens+ contributing to higher subscription ARPU and gross margin expansion. We continue to innovate on additional direct value propositions for our community, including the launch of Creator Subscriptions in Q1. We believe this offering can deepen creator engagement on Snapchat, strengthen relationships between creators and their audiences, and further diversify our revenue streams over time. We are excited about the upcoming launch of Specs and our mission to make computing more human. For more than a decade, we have believed that smart glasses will be the most important computing platform transition since the smartphone. AI-powered Lens interactions are deepening user engagement and increasingly serving as a natural discovery layer for premium AI-powered experiences. ai-powered lens interactions are deepening user engagement and increasingly serving as a natural discovery layer for premium ai-powered experiences Lens+ is emerging as a key extension of this strategy, offering subscribers access to exclusive Lenses and AI-powered features. lens+ is emerging as a key extension of this strategy offering subscribers access to exclusive lenses and ai-powered features Early traction has been encouraging, with Lens+ contributing to higher subscription ARPU and gross margin expansion. early traction has been encouraging with lens+ contributing to higher subscription arpu and gross margin expansion We continue to innovate on additional direct value propositions for our community, including the launch of Creator Subscriptions in Q1. we continue to innovate on additional direct value propositions for our community including the launch of creator subscriptions in q1 We believe this offering can deepen creator engagement on Snapchat, strengthen relationships between creators and their audiences, and further diversify our revenue streams over time. we believe this offering can deepen creator engagement on snapchat strengthen relationships between creators and their audiences and further diversify our revenue streams over time We are excited about the upcoming launch of Specs and our mission to make computing more human. we are excited about the upcoming launch of specs and our mission to make computing more human For more than a decade, we have believed that smart glasses will be the most important computing platform transition since the smartphone. for more than a decade we have believed that smart glasses will be the most important computing platform transition since the smartphone Snap is uniquely positioned to shape that future because we bring together a scaled augmented reality platform, a large developer ecosystem, and a vertically integrated software and hardware stack through Lens Studio, Snap OS, and Specs. Over the past year, we continued to improve our platform with major Snap OS updates, new tools and APIs for developers, and new experiences that expand what is possible on Specs across learning, gaming, utility, and AI-powered assistance. We are also seeing encouraging momentum in our developer ecosystem, with the number of Lenses submitted for Specs increasing 28% year-over-year. We are inspired by the range of Lens experiences developers are building for Specs. Early examples include Fossils from XR company VyuXR Immersive Studios, an interactive AR learning experience that uses spatial puzzle mechanics to let users uncover and assemble prehistoric fossils while bringing extinct animals to life. Snap is uniquely positioned to shape that future because we bring together a scaled augmented reality platform, a large developer ecosystem, and a vertically integrated software and hardware stack through Lens Studio, Snap OS, and Specs. snap is uniquely positioned to shape that future because we bring together a scaled augmented reality platform a large developer ecosystem and a vertically integrated software and hardware stack through lens studio snap os and specs Over the past year, we continued to improve our platform with major Snap OS updates, new tools and APIs for developers, and new experiences that expand what is possible on Specs across learning, gaming, utility, and AI-powered assistance. over the past year we continued to improve our platform with major snap os updates new tools and apis for developers and new experiences that expand what is possible on specs across learning gaming utility and ai-powered assistance We are also seeing encouraging momentum in our developer ecosystem, with the number of Lenses submitted for Specs increasing 28% year-over-year. we are also seeing encouraging momentum in our developer ecosystem with the number of lenses submitted for specs increasing 28% year-over-year We are inspired by the range of Lens experiences developers are building for Specs. we are inspired by the range of lens experiences developers are building for specs Early examples include Fossils from XR company VyuXR Immersive Studios, an interactive AR learning experience that uses spatial puzzle mechanics to let users uncover and assemble prehistoric fossils while bringing extinct animals to life. early examples include fossils from xr company vyuxr immersive studios an interactive ar learning experience that uses spatial puzzle mechanics to let users uncover and assemble prehistoric fossils while bringing extinct animals to life Artel from Yegor Ryabtsov, an AR drawing app that lets users create in 3D space with a wide range of brushes, colors and effects, and now includes physics-based interactions that allow drawings to respond to gravity and motion. The Heist by GrowPile, a co-located AR puzzle game in which players solve changing modules and challenges to disarm an anti-theft system, either solo or with others on Specs or mobile. We look forward to sharing more as we get closer to launch, and we hope you will join us at Augmented World Expo on June 16th as we continue our work to make computing more human. I'd now like to turn over the call to Derek to discuss our financial results. This will be Derek's last earnings call at Snap, and I want to thank him for his leadership and contributions to our team over the past eight years. Artel from Yegor Ryabtsov, an AR drawing app that lets users create in 3D space with a wide range of brushes, colors and effects, and now includes physics-based interactions that allow drawings to respond to gravity and motion. artel from yegor ryabtsov an ar drawing app that lets users create in 3d space with a wide range of brushes colors and effects and now includes physics-based interactions that allow drawings to respond to gravity and motion The Heist by GrowPile, a co-located AR puzzle game in which players solve changing modules and challenges to disarm an anti-theft system, either solo or with others on Specs or mobile. the heist by growpile a co-located ar puzzle game in which players solve changing modules and challenges to disarm an anti-theft system either solo or with others on specs or mobile We look forward to sharing more as we get closer to launch, and we hope you will join us at Augmented World Expo on June 16th as we continue our work to make computing more human. we look forward to sharing more as we get closer to launch and we hope you will join us at augmented world expo on june 16th as we continue our work to make computing more human I'd now like to turn over the call to Derek to discuss our financial results. i'd now like to turn over the call to derek to discuss our financial results This will be Derek's last earnings call at Snap, and I want to thank him for his leadership and contributions to our team over the past eight years. this will be derek's last earnings call at snap and i want to thank him for his leadership and contributions to our team over the past eight years

Speaker 3: Thank you, Evan. I really appreciate the kind words and thank you everybody for joining our call today. In Q1, we demonstrated substantial financial progress with revenue at the top end of our guidance range, gross margins expanding year-over-year and adjusted EBITDA materially favorable to our prior guidance. More broadly, we believe Q1 provides early evidence that the strategic framework we laid out last fall is beginning to translate into more durable revenue growth, a more efficient cost structure, and a clear path to net income profitability. Total revenue was $1.53 billion in Q1, up 12% year-over-year. Other revenue increased 87% year-over-year to $285 million in Q1, driven primarily by continued momentum in Snapchat+ subscriptions, strong adoption of our newer offerings such as Memories, and early traction from Lens+. Thank you, Evan. thank you evan I really appreciate the kind words and thank you everybody for joining our call today. i really appreciate the kind words and thank you everybody for joining our call today In Q1, we demonstrated substantial financial progress with revenue at the top end of our guidance range, gross margins expanding year-over-year and adjusted EBITDA materially favorable to our prior guidance. in q1 we demonstrated substantial financial progress with revenue at the top end of our guidance range gross margins expanding year-over-year and adjusted ebitda materially favorable to our prior guidance More broadly, we believe Q1 provides early evidence that the strategic framework we laid out last fall is beginning to translate into more durable revenue growth, a more efficient cost structure, and a clear path to net income profitability. more broadly we believe q1 provides early evidence that the strategic framework we laid out last fall is beginning to translate into more durable revenue growth a more efficient cost structure and a clear path to net income profitability Total revenue was $1.53 billion in Q1, up 12% year-over-year. total revenue was $1.53 billion in q1 up 12% year-over-year Other revenue increased 87% year-over-year to $285 million in Q1, driven primarily by continued momentum in Snapchat+ subscriptions, strong adoption of our newer offerings such as Memories, and early traction from Lens+. other revenue increased 87% year-over-year to $285 million in q1 driven primarily by continued momentum in snapchat+ subscriptions strong adoption of our newer offerings such as memories and early traction from lens+ Advertising revenue reached $1.24 billion in Q1, up 3% year-over-year, driven primarily by growth in direct response Advertising revenue, partially offset by continued headwinds in the North America large client advertising business and an approximately $20 million-$25 million impact from the geopolitical headwinds in the Middle East experienced during March. Global impression volume increased approximately 17% year-over-year, while total eCPMs declined approximately 12% year-over-year. These dynamics are driven by the rapid growth in Sponsored Snaps, as well as a mix shift in impression delivery towards Spotlight. Advertising revenue reached $1.24 billion in Q1, up 3% year-over-year, driven primarily by growth in direct response Advertising revenue, partially offset by continued headwinds in the North America large client advertising business and an approximately $20 million-$25 million impact from the geopolitical headwinds in the Middle East experienced during March. advertising revenue reached $1.24 billion in q1 up 3% year-over-year driven primarily by growth in direct response advertising revenue partially offset by continued headwinds in the north america large client advertising business and an approximately $20 million-$25 million impact from the geopolitical headwinds in the middle east experienced during march Global impression volume increased approximately 17% year-over-year, while total eCPMs declined approximately 12% year-over-year. global impression volume increased approximately 17% year-over-year while total ecpms declined approximately 12% year-over-year These dynamics are driven by the rapid growth in Sponsored Snaps, as well as a mix shift in impression delivery towards Spotlight. these dynamics are driven by the rapid growth in sponsored snaps as well as a mix shift in impression delivery towards spotlight These factors are driving strong impression growth and improved advertiser performance, but have created a near-term revenue headwind as we work to build demand for these newer services and ad units. We believe these dynamics are positive for the long-term health of the platform as improved pricing and performance are key inputs to building demand over time. Adjusted cost of revenue was $662 million in Q1, up 4% year-over-year. Total infrastructure costs were $401 million in Q1, up 7% year-over-year, driven primarily by community growth, strategic investments in AI model training, and monetization serving costs. The remaining components of adjusted cost of revenue were $261 million in Q1 or 17% of revenue, which is in line with our full year cost structure guidance range, an improvement of 2 percentage points year-over-year. These factors are driving strong impression growth and improved advertiser performance, but have created a near-term revenue headwind as we work to build demand for these newer services and ad units. We believe these dynamics are positive for the long-term health of the platform as improved pricing and performance are key inputs to building demand over time. these factors are driving strong impression growth and improved advertiser performance but have created a near-term revenue headwind as we work to build demand for these newer services and ad units. we believe these dynamics are positive for the long-term health of the platform as improved pricing and performance are key inputs to building demand over time Adjusted cost of revenue was $662 million in Q1, up 4% year-over-year. adjusted cost of revenue was $662 million in q1 up 4% year-over-year Total infrastructure costs were $401 million in Q1, up 7% year-over-year, driven primarily by community growth, strategic investments in AI model training, and monetization serving costs. total infrastructure costs were $401 million in q1 up 7% year-over-year driven primarily by community growth strategic investments in ai model training and monetization serving costs The remaining components of adjusted cost of revenue were $261 million in Q1 or 17% of revenue, which is in line with our full year cost structure guidance range, an improvement of 2 percentage points year-over-year. the remaining components of adjusted cost of revenue were $261 million in q1 or 17% of revenue which is in line with our full year cost structure guidance range an improvement of 2 percentage points year-over-year These operational efficiencies contributed to adjusted gross margin improving 3 percentage points year-over-year to reach 57% in Q1, which we believe puts us on track for achieving our goal of 60% or better for fiscal 2026. Adjusted operating expenses were $633 million in Q1, up 2% year-over-year. The growth was driven primarily by a 7% increase in personnel costs, which was partially offset by reductions in community growth marketing as we continued to calibrate investments in community growth with the long-term monetization potential of each geography. Adjusted EBITDA was $233 million in Q1, an improvement of $125 million compared to the prior year. Adjusted EBITDA flow through, or the percentage of year-over-year revenue growth that flowed through to adjusted EBITDA, was 75% in Q1. These operational efficiencies contributed to adjusted gross margin improving 3 percentage points year-over-year to reach 57% in Q1, which we believe puts us on track for achieving our goal of 60% or better for fiscal 2026. these operational efficiencies contributed to adjusted gross margin improving 3 percentage points year-over-year to reach 57% in q1 which we believe puts us on track for achieving our goal of 60% or better for fiscal 2026 Adjusted operating expenses were $633 million in Q1, up 2% year-over-year. adjusted operating expenses were $633 million in q1 up 2% year-over-year The growth was driven primarily by a 7% increase in personnel costs, which was partially offset by reductions in community growth marketing as we continued to calibrate investments in community growth with the long-term monetization potential of each geography. the growth was driven primarily by a 7% increase in personnel costs which was partially offset by reductions in community growth marketing as we continued to calibrate investments in community growth with the long-term monetization potential of each geography Adjusted EBITDA was $233 million in Q1, an improvement of $125 million compared to the prior year. adjusted ebitda was $233 million in q1 an improvement of $125 million compared to the prior year Adjusted EBITDA flow through, or the percentage of year-over-year revenue growth that flowed through to adjusted EBITDA, was 75% in Q1. adjusted ebitda flow through or the percentage of year-over-year revenue growth that flowed through to adjusted ebitda was 75% in q1 We view this elevated flow through as a clear demonstration of our pivot to profitability becoming evident in our financial results. Net loss was $89 million in Q1 compared to $140 million in the prior year. The $51 million year-over-year improvement largely reflects the flow-through of the $125 million improvement in adjusted EBITDA, partially offset by a $49 million gain on debt extinguishment recognized in the prior year and a $24 million increase in net interest expense due to the high-yield notes issued in the prior year. Stock-based compensation and related payroll expenses were $263 million in Q1, which represents a modest decline year-over-year. We are focused on reducing SBC as a percentage of revenue and limiting dilution through disciplined equity compensation and opportunistic repurchases. We view this elevated flow through as a clear demonstration of our pivot to profitability becoming evident in our financial results. we view this elevated flow through as a clear demonstration of our pivot to profitability becoming evident in our financial results Net loss was $89 million in Q1 compared to $140 million in the prior year. net loss was $89 million in q1 compared to $140 million in the prior year The $51 million year-over-year improvement largely reflects the flow-through of the $125 million improvement in adjusted EBITDA, partially offset by a $49 million gain on debt extinguishment recognized in the prior year and a $24 million increase in net interest expense due to the high-yield notes issued in the prior year. the $51 million year-over-year improvement largely reflects the flow-through of the $125 million improvement in adjusted ebitda partially offset by a $49 million gain on debt extinguishment recognized in the prior year and a $24 million increase in net interest expense due to the high-yield notes issued in the prior year Stock-based compensation and related payroll expenses were $263 million in Q1, which represents a modest decline year-over-year. stock-based compensation and related payroll expenses were $263 million in q1 which represents a modest decline year-over-year We are focused on reducing SBC as a percentage of revenue and limiting dilution through disciplined equity compensation and opportunistic repurchases. we are focused on reducing sbc as a percentage of revenue and limiting dilution through disciplined equity compensation and opportunistic repurchases We continued to manage our share count carefully with $350 million in share repurchases completed in Q1, which helped limit share count growth to 3.5%. We ended Q1 with approximately $2.8 billion in cash and marketable securities and had $400 million remaining in our previously authorized share repurchase program as of the end of Q1. Free cash flow was $286 million in Q1 while operating cash flow was $327 million. Over the trailing 12 months, free cash flow was $609 million and operating cash flow was $831 million as we continue to execute on translating top line growth into sustained growth in cash flow. We continued to manage our share count carefully with $350 million in share repurchases completed in Q1, which helped limit share count growth to 3.5%. we continued to manage our share count carefully with $350 million in share repurchases completed in q1 which helped limit share count growth to 3.5% We ended Q1 with approximately $2.8 billion in cash and marketable securities and had $400 million remaining in our previously authorized share repurchase program as of the end of Q1. we ended q1 with approximately $2.8 billion in cash and marketable securities and had $400 million remaining in our previously authorized share repurchase program as of the end of q1 Free cash flow was $286 million in Q1 while operating cash flow was $327 million. free cash flow was $286 million in q1 while operating cash flow was $327 million Over the trailing 12 months, free cash flow was $609 million and operating cash flow was $831 million as we continue to execute on translating top line growth into sustained growth in cash flow. over the trailing 12 months free cash flow was $609 million and operating cash flow was $831 million as we continue to execute on translating top line growth into sustained growth in cash flow Taken together, we believe our Q1 financial results provide early proof points that continued revenue diversification and improved cost discipline will support a more durable and profitable business over time. We also recognize that investor expectations are increasingly centered on the pace at which this progress translates into meaningful GAAP earnings. In April, we took the difficult but necessary action to make Snap a faster, more focused, and more efficient company. As a result, we expect to reduce our annualized cost structure by more than $500 million in the second half of 2026. We believe these actions establish a clearer path to net income profitability while prioritizing investment in the highest conviction opportunities across Snap. As we move into Q2, we remain focused on accelerating our top line, growing our community, deepening engagement, improving financial efficiency, and advancing toward the commercial launch of Specs later this year. Taken together, we believe our Q1 financial results provide early proof points that continued revenue diversification and improved cost discipline will support a more durable and profitable business over time. taken together we believe our q1 financial results provide early proof points that continued revenue diversification and improved cost discipline will support a more durable and profitable business over time We also recognize that investor expectations are increasingly centered on the pace at which this progress translates into meaningful GAAP earnings. we also recognize that investor expectations are increasingly centered on the pace at which this progress translates into meaningful gaap earnings In April, we took the difficult but necessary action to make Snap a faster, more focused, and more efficient company. in april we took the difficult but necessary action to make snap a faster more focused and more efficient company As a result, we expect to reduce our annualized cost structure by more than $500 million in the second half of 2026. as a result we expect to reduce our annualized cost structure by more than $500 million in the second half of 2026 We believe these actions establish a clearer path to net income profitability while prioritizing investment in the highest conviction opportunities across Snap. we believe these actions establish a clearer path to net income profitability while prioritizing investment in the highest conviction opportunities across snap As we move into Q2, we remain focused on accelerating our top line, growing our community, deepening engagement, improving financial efficiency, and advancing toward the commercial launch of Specs later this year. as we move into q2 we remain focused on accelerating our top line growing our community deepening engagement improving financial efficiency and advancing toward the commercial launch of specs later this year Our guidance range for revenue in Q2 is $1.52 billion-$1.55 billion. Our revenue guidance range assumes no contribution from Perplexity as we amicably ended the relationship in Q1. Our guidance range also assumes that the operating environment in the Middle East region remains consistent relative to the magnitude of the headwinds we have experienced in March and April. Caution that the trajectory of the geopolitical situation in the region is uncertain. On the cost side, we anticipate that infrastructure costs will grow modestly year-over-year in Q2 while remaining on track toward our full year cost structure guidance. All other cost of revenue is expected to remain in line with our full year cost structure guidance at 16%-17% of revenue in Q2. Our guidance range for revenue in Q2 is $1.52 billion-$1.55 billion. our guidance range for revenue in q2 is $1.52 billion-$1.55 billion Our revenue guidance range assumes no contribution from Perplexity as we amicably ended the relationship in Q1. our revenue guidance range assumes no contribution from perplexity as we amicably ended the relationship in q1 Our guidance range also assumes that the operating environment in the Middle East region remains consistent relative to the magnitude of the headwinds we have experienced in March and April. our guidance range also assumes that the operating environment in the middle east region remains consistent relative to the magnitude of the headwinds we have experienced in march and april Caution that the trajectory of the geopolitical situation in the region is uncertain. caution that the trajectory of the geopolitical situation in the region is uncertain On the cost side, we anticipate that infrastructure costs will grow modestly year-over-year in Q2 while remaining on track toward our full year cost structure guidance. on the cost side we anticipate that infrastructure costs will grow modestly year-over-year in q2 while remaining on track toward our full year cost structure guidance All other cost of revenue is expected to remain in line with our full year cost structure guidance at 16%-17% of revenue in Q2. all other cost of revenue is expected to remain in line with our full year cost structure guidance at 16%-17% of revenue in q2 From a personnel cost perspective, our recently announced restructuring will have a partial period benefit in Q2 while the reduction in our adjusted operating expenses and SBC will be more fully reflected in Q3 and beyond. As a result, we estimate that adjusted EBITDA will be between $175 million and $200 million in Q2. We also anticipate that we will incur pre-tax restructuring charges of between $95 million and $130 million related to our recent restructuring and that the majority of these costs will be incurred in Q2, which will be a headwind to net income in this period. Lastly, we continue to monitor the evolving legal and regulatory landscape in the U.S. and internationally. Areas of focus include age assurance, data use, privacy, advertising practices, and online safety. From a personnel cost perspective, our recently announced restructuring will have a partial period benefit in Q2 while the reduction in our adjusted operating expenses and SBC will be more fully reflected in Q3 and beyond. from a personnel cost perspective our recently announced restructuring will have a partial period benefit in q2 while the reduction in our adjusted operating expenses and sbc will be more fully reflected in q3 and beyond As a result, we estimate that adjusted EBITDA will be between $175 million and $200 million in Q2. as a result we estimate that adjusted ebitda will be between $175 million and $200 million in q2 We also anticipate that we will incur pre-tax restructuring charges of between $95 million and $130 million related to our recent restructuring and that the majority of these costs will be incurred in Q2, which will be a headwind to net income in this period. we also anticipate that we will incur pre-tax restructuring charges of between $95 million and $130 million related to our recent restructuring and that the majority of these costs will be incurred in q2 which will be a headwind to net income in this period Lastly, we continue to monitor the evolving legal and regulatory landscape in the U.S. and internationally. lastly we continue to monitor the evolving legal and regulatory landscape in the u.s and internationally Areas of focus include age assurance, data use, privacy, advertising practices, and online safety. areas of focus include age assurance data use privacy advertising practices and online safety While outcomes remain uncertain, these developments may result in changes to our products and business practices, which could increase compliance and legal costs over time and may also impact user growth and engagement. Thank you. We will now take your questions. While outcomes remain uncertain, these developments may result in changes to our products and business practices, which could increase compliance and legal costs over time and may also impact user growth and engagement. while outcomes remain uncertain these developments may result in changes to our products and business practices which could increase compliance and legal costs over time and may also impact user growth and engagement Thank you. thank you We will now take your questions. we will now take your questions

Speaker 10: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. In the interest of time, we ask that you please limit yourself to one question. After your initial question is asked, your line will be muted. At this time, we will pause momentarily to assemble our roster. The first question comes from Ross Sandler with Barclays. You may proceed. Thank you. thank you We will now begin the question- and- answer session. we will now begin the question- and- answer session To ask a question, you may press star then one on your touch tone phone. to ask a question you may press star then one on your touch tone phone If you are using a speakerphone, please pick up your handset before pressing the keys. if you are using a speakerphone please pick up your handset before pressing the keys To withdraw your question, please press star then two. to withdraw your question please press star then two In the interest of time, we ask that you please limit yourself to one question. in the interest of time we ask that you please limit yourself to one question After your initial question is asked, your line will be muted. after your initial question is asked your line will be muted At this time, we will pause momentarily to assemble our roster. at this time we will pause momentarily to assemble our roster The first question comes from Ross Sandler with Barclays. the first question comes from ross sandler with barclays You may proceed. you may proceed

Speaker 12: Hey, guys. The 2Q revenue guidance has a couple-point acceleration baked in at the high end. Just curious, given what you said about the Middle East, what's driving that potential improving growth rate? Is it the Ad business? Is it Snapchat+? Any additional color there. Evan, I'm sure you guys saw the 70-page activist deck that was released. I'm just curious to get your take on some of the suggestions that were in that around cost improvement, monetization, and governance. Just curious your take on that. Thanks a lot. Hey, guys. hey guys The 2Q revenue guidance has a couple-point acceleration baked in at the high end. the 2q revenue guidance has a couple-point acceleration baked in at the high end Just curious, given what you said about the Middle East, what's driving that potential improving growth rate? just curious given what you said about the middle east what's driving that potential improving growth rate Is it the Ad business? is it the ad business Is it Snapchat+? is it snapchat+ Any additional color there. any additional color there Evan, I'm sure you guys saw the 70-page activist deck that was released. evan i'm sure you guys saw the 70-page activist deck that was released I'm just curious to get your take on some of the suggestions that were in that around cost improvement, monetization, and governance. i'm just curious to get your take on some of the suggestions that were in that around cost improvement monetization and governance Just curious your take on that. just curious your take on that Thanks a lot. thanks a lot

Speaker 3: Hi, Ross. It's Derek speaking. I'll take the first one there on the guide. Probably worthwhile just to take a minute to contextualize the growth rates in Q1 and what we're expecting in Q2. In Q1, a couple of different factors there on the growth rate. One is we had about a 2-point FX tailwind, we also had the impact of the conflict in the Middle East that really impacted the business in March. Those two essentially largely washed with the headwind on the Middle East side being similar. That left us with a 12% growth rate, which was a 2 percentage point acceleration over Q4 and at the very high end of our guidance range with the strength there driven largely by the Subscription business and the momentum we saw there in Q1. Hi, Ross. hi ross It's Derek speaking. it's derek speaking I'll take the first one there on the guide. i'll take the first one there on the guide Probably worthwhile just to take a minute to contextualize the growth rates in Q1 and what we're expecting in Q2. probably worthwhile just to take a minute to contextualize the growth rates in q1 and what we're expecting in q2 In Q1, a couple of different factors there on the growth rate. in q1 a couple of different factors there on the growth rate One is we had about a 2-point FX tailwind, we also had the impact of the conflict in the Middle East that really impacted the business in March. one is we had about a 2-point fx tailwind we also had the impact of the conflict in the middle east that really impacted the business in march Those two essentially largely washed with the headwind on the Middle East side being similar. those two essentially largely washed with the headwind on the middle east side being similar That left us with a 12% growth rate, which was a 2 percentage point acceleration over Q4 and at the very high end of our guidance range with the strength there driven largely by the Subscription business and the momentum we saw there in Q1. that left us with a 12% growth rate which was a 2 percentage point acceleration over q4 and at the very high end of our guidance range with the strength there driven largely by the subscription business and the momentum we saw there in q1 As we move into Q2, there are again a few different factors there. You know, one, the comps on the growth rate in the prior year are a tailwind into Q2, of approximately 5 points from the prior year. That's essentially fully offset by, one, what we expect will be a diminished FX tailwind going from about 2 to about 1 points approximately. Also, we expect that the headwinds that we're seeing from the conflict in the Middle East will be a full quarter impact in Q2, relative to a single month impact in Q1. Those two factors combined offset the comp. As we move into Q2, there are again a few different factors there. as we move into q2 there are again a few different factors there You know, one, the comps on the growth rate in the prior year are a tailwind into Q2, of approximately 5 points from the prior year. you know one the comps on the growth rate in the prior year are a tailwind into q2 of approximately 5 points from the prior year That's essentially fully offset by, one, what we expect will be a diminished FX tailwind going from about 2 to about 1 points approximately. that's essentially fully offset by one what we expect will be a diminished fx tailwind going from about 2 to about 1 points approximately Also, we expect that the headwinds that we're seeing from the conflict in the Middle East will be a full quarter impact in Q2, relative to a single month impact in Q1. also we expect that the headwinds that we're seeing from the conflict in the middle east will be a full quarter impact in q2 relative to a single month impact in q1 Those two factors combined offset the comp. those two factors combined offset the comp With those factors set aside, you're really left with a 2-point acceleration at the midpoint of the guide relative to Q1, and that I would attribute to the strength that we are seeing in the North America Ads business. We've been talking for some time about the improvements in pricing and yields that advertisers are enjoying there and the progress we've made with the ad platform and improving ROAS that folks are seeing there. With those factors set aside, you're really left with a 2-point acceleration at the midpoint of the guide relative to Q1, and that I would attribute to the strength that we are seeing in the North America Ads business. with those factors set aside you're really left with a 2-point acceleration at the midpoint of the guide relative to q1 and that i would attribute to the strength that we are seeing in the north america ads business We've been talking for some time about the improvements in pricing and yields that advertisers are enjoying there and the progress we've made with the ad platform and improving ROAS that folks are seeing there. we've been talking for some time about the improvements in pricing and yields that advertisers are enjoying there and the progress we've made with the ad platform and improving roas that folks are seeing there We saw that translate into really improved upfront commitments in Q1. We talked about that in the letter being up about 10% year-over-year, which is encouraging. That's starting to show up in the top line, and that gave us the confidence to put that into the guide for Q2 with an acceleration there driven largely by the North America Ads business and the guidance there. Hopefully that gives you good context on what we're seeing there from quarter-to-quarter and what's driving the acceleration. We saw that translate into really improved upfront commitments in Q1. we saw that translate into really improved upfront commitments in q1 We talked about that in the letter being up about 10% year-over-year, which is encouraging. we talked about that in the letter being up about 10% year-over-year which is encouraging That's starting to show up in the top line, and that gave us the confidence to put that into the guide for Q2 with an acceleration there driven largely by the North America Ads business and the guidance there. that's starting to show up in the top line and that gave us the confidence to put that into the guide for q2 with an acceleration there driven largely by the north america ads business and the guidance there Hopefully that gives you good context on what we're seeing there from quarter-to-quarter and what's driving the acceleration. hopefully that gives you good context on what we're seeing there from quarter-to-quarter and what's driving the acceleration

Speaker 5: Hey, Ross, it's Evan. Thanks so much for the question. You know, we're really grateful obviously, from input from our shareholders, and I think we've taken some strong actions already, you know, to operate with better discipline, to improve profitability and sharpen capital allocation. Fundamentally, we think our job is to operate the business in the long-term interests of our shareholders, and we're gonna continue to invest against our core long-term opportunity. Hey, Ross, it's Evan. hey ross it's evan Thanks so much for the question. thanks so much for the question You know, we're really grateful obviously, from input from our shareholders, and I think we've taken some strong actions already, you know, to operate with better discipline, to improve profitability and sharpen capital allocation. you know we're really grateful obviously from input from our shareholders and i think we've taken some strong actions already you know to operate with better discipline to improve profitability and sharpen capital allocation Fundamentally, we think our job is to operate the business in the long-term interests of our shareholders, and we're gonna continue to invest against our core long-term opportunity. fundamentally we think our job is to operate the business in the long-term interests of our shareholders and we're gonna continue to invest against our core long-term opportunity

Speaker 10: Thank you. The next question comes from Michael Nathanson with MoffettNathanson. You may proceed. Thank you. thank you The next question comes from Michael Nathanson with MoffettNathanson. the next question comes from michael nathanson with moffettnathanson You may proceed. you may proceed

Speaker 8: Thanks. I have two for either of you guys. One is, you know, we cover Roku and CTV, and what we've seen happen is, as Roku has added third-party DSPs, they've been able to really accelerate ad growth because the walled gardens are hard to compete against. I wondered, have you thought about it, contemplated the idea of perhaps opening your inventory up to more sellers on the DSP side to encourage more density in the auctions? You know, why or why not? Then on Snapchat+, it's impressive what you guys are doing. Is there any color you could give us on who these users are? Where they're coming from? And kind of just the pricing dynamics that you've seen in terms of ability to what do you think your profitability is to raise price here? Thanks. thanks I have two for either of you guys. i have two for either of you guys One is, you know, we cover Roku and CTV, and what we've seen happen is, as Roku has added third-party DSPs, they've been able to really accelerate ad growth because the walled gardens are hard to compete against. one is you know we cover roku and ctv and what we've seen happen is as roku has added third-party dsps they've been able to really accelerate ad growth because the walled gardens are hard to compete against I wondered, have you thought about it, contemplated the idea of perhaps opening your inventory up to more sellers on the DSP side to encourage more density in the auctions? i wondered have you thought about it contemplated the idea of perhaps opening your inventory up to more sellers on the dsp side to encourage more density in the auctions You know, why or why not? you know why or why not Then on Snapchat+ , it's impressive what you guys are doing. then on snapchat+ it's impressive what you guys are doing Is there any color you could give us on who these users are? is there any color you could give us on who these users are Where they're coming from? where they're coming from And kind of just the pricing dynamics that you've seen in terms of ability to what do you think your profitability is to raise price here? and kind of just the pricing dynamics that you've seen in terms of ability to what do you think your profitability is to raise price here Anything you'd give us on color on the sustainability of Snapchat+ would be great. Thanks. Anything you'd give us on color on the sustainability of Snapchat + would be great. anything you'd give us on color on the sustainability of snapchat + would be great Thanks. thanks

Speaker 5: Yeah, thanks so much for the question. You know, I think on the DSP side, we've just always believed that the advertiser relationship is very important strategically, especially as we've diversified with small and medium customers and focused more on lower funnel objectives. I do think to your point, there may be some opportunity around upper funnel video demand that, you know, we've been considering, but we'd have to really carefully think through the channel conflict and how to grow that demand while continuing to build strong direct advertiser relationships. I do think scaling through partners is important and, you know, as Derek mentioned, we do see some opportunity with agencies and by working more closely with them. We are, you know, pleased to see the growth in those upfront commitments. Yeah, thanks so much for the question. yeah thanks so much for the question You know, I think on the DSP side, we've just always believed that the advertiser relationship is very important strategically, especially as we've diversified with small and medium customers and focused more on lower funnel objectives. you know i think on the dsp side we've just always believed that the advertiser relationship is very important strategically especially as we've diversified with small and medium customers and focused more on lower funnel objectives I do think to your point, there may be some opportunity around upper funnel video demand that, you know, we've been considering, but we'd have to really carefully think through the channel conflict and how to grow that demand while continuing to build strong direct advertiser relationships. i do think to your point there may be some opportunity around upper funnel video demand that you know we've been considering but we'd have to really carefully think through the channel conflict and how to grow that demand while continuing to build strong direct advertiser relationships I do think scaling through partners is important and, you know, as Derek mentioned, we do see some opportunity with agencies and by working more closely with them. i do think scaling through partners is important and you know as derek mentioned we do see some opportunity with agencies and by working more closely with them We are, you know, pleased to see the growth in those upfront commitments. we are you know pleased to see the growth in those upfront commitments On Snapchat+, you know, obviously the growth is really exciting. I think there are a couple different ways to look at the long-term opportunity. One is, you know, increased tiers of Snapchat+. We've seen some strong momentum with Lens+, which is really anchored around our AI creative and editing tools in the camera. That I think could be a big, you know, opportunity for us long term. It's obviously a higher-priced offering. I think there's some real customer value there, obviously with our strength in the camera and our lens ecosystem. Tiering, I think is certainly one approach. You know, we just continue to see growth as we roll out new features. On Snapchat+, you know, obviously the growth is really exciting. on snapchat+ you know obviously the growth is really exciting I think there are a couple different ways to look at the long-term opportunity. i think there are a couple different ways to look at the long-term opportunity One is, you know, increased tiers of Snapchat+. one is you know increased tiers of snapchat+ We've seen some strong momentum with Lens+, which is really anchored around our AI creative and editing tools in the camera. we've seen some strong momentum with lens+ which is really anchored around our ai creative and editing tools in the camera That I think could be a big, you know, opportunity for us long term. that i think could be a big you know opportunity for us long term It's obviously a higher-priced offering. it's obviously a higher-priced offering I think there's some real customer value there, obviously with our strength in the camera and our lens ecosystem. i think there's some real customer value there obviously with our strength in the camera and our lens ecosystem Tiering, I think is certainly one approach. tiering i think is certainly one approach You know, we just continue to see growth as we roll out new features. you know we just continue to see growth as we roll out new features We've got a community that really loves our product, that's constantly asking for new and differentiated ways to use Snapchat. As we respond to those requests and continue to build out new features, you know, that tends to drive subscriber growth. You know, with the introduction of Memories, we have seen overall retention for Snapchat+ improve as well. That, you know, is helping as we look at just the long-term growth and durability of the subscription product. We've got a community that really loves our product, that's constantly asking for new and differentiated ways to use Snapchat. we've got a community that really loves our product that's constantly asking for new and differentiated ways to use snapchat As we respond to those requests and continue to build out new features, you know, that tends to drive subscriber growth. as we respond to those requests and continue to build out new features you know that tends to drive subscriber growth You know, with the introduction of Memories, we have seen overall retention for Snapchat+ improve as well. you know with the introduction of memories we have seen overall retention for snapchat+ improve as well That, you know, is helping as we look at just the long-term growth and durability of the subscription product. that you know is helping as we look at just the long-term growth and durability of the subscription product

Speaker 10: Thank you. The next question comes from Doug Anmuth with JPMorgan. You may proceed. Thank you. thank you The next question comes from Doug Anmuth with JP Morgan. the next question comes from doug anmuth with jp morgan You may proceed. you may proceed

Speaker 6: Hi, this is Maggie on for Doug. Thanks for taking the question. I was wondering if you can just talk a bit more about the broader opportunity you see with AI Sponsored Snaps, sort of what you're hearing from advertisers in terms of overall interest in something like this. Thank you. Hi, this is Maggie on for Doug. hi this is maggie on for doug Thanks for taking the question. thanks for taking the question I was wondering if you can just talk a bit more about the broader opportunity you see with AI Sponsored Snaps, sort of what you're hearing from advertisers in terms of overall interest in something like this. i was wondering if you can just talk a bit more about the broader opportunity you see with ai sponsored snaps sort of what you're hearing from advertisers in terms of overall interest in something like this Thank you. thank you

Speaker 5: Hey, thanks, Maggie. You know, advertiser feedback has been really positive, I think mostly because Sponsored Snaps are showing that chat can be monetized in a way that's really native to Snapchat. Brands are loving this combination of very high reach and high attention, especially because Chat is such a high-frequency behavior on Snapchat throughout the day. I think what's important for us strategically is that Chat's not just another inventory pool. It really gives us a differentiated environment where brands can engage users in, you know, a more direct and more personal way. AI Sponsored Snaps are really an extension of that because they can make those interactions and those conversations more useful and more relevant over time. Hey, thanks, Maggie. hey thanks maggie You know, advertiser feedback has been really positive, I think mostly because Sponsored Snaps are showing that chat can be monetized in a way that's really native to Snapchat. you know advertiser feedback has been really positive i think mostly because sponsored snaps are showing that chat can be monetized in a way that's really native to snapchat Brands are loving this combination of very high reach and high attention, especially because Chat is such a high-frequency behavior on Snapchat throughout the day. brands are loving this combination of very high reach and high attention especially because chat is such a high-frequency behavior on snapchat throughout the day I think what's important for us strategically is that Chat's not just another inventory pool. i think what's important for us strategically is that chat's not just another inventory pool It really gives us a differentiated environment where brands can engage users in, you know, a more direct and more personal way. it really gives us a differentiated environment where brands can engage users in you know a more direct and more personal way AI Sponsored Snaps are really an extension of that because they can make those interactions and those conversations more useful and more relevant over time. ai sponsored snaps are really an extension of that because they can make those interactions and those conversations more useful and more relevant over time I think just, you know, looking forward, the roadmap is really about just careful, you know, expansion of capability, improving demand and yield, obviously, with Sponsored Snaps, adding more direct response features, then, you know, continuing to work with new partners like Experian to evolve the AI Sponsored Snap product. I think just, you know, looking forward, the roadmap is really about just careful, you know, expansion of capability, improving demand and yield, obviously, with Sponsored Snaps, adding more direct response features, then, you know, continuing to work with new partners like Experian to evolve the AI Sponsored Snap product. i think just you know looking forward the roadmap is really about just careful you know expansion of capability improving demand and yield obviously with sponsored snaps adding more direct response features then you know continuing to work with new partners like experian to evolve the ai sponsored snap product

Speaker 10: Thank you. The next question comes from Rich Greenfield with LightShed Partners. You may proceed. Thank you. thank you The next question comes from Rich Greenfield with LightShed Partners. the next question comes from rich greenfield with lightshed partners You may proceed. you may proceed

Speaker 11: Hey, thanks for taking the question. you know Evan, it looks like your North American Ad business was down, you know, call it about 7% with the growth really, the overall growth driven by subscription. I'm wondering how much of that downdraft in ad revenue is being caused by the drop in North American DAUs versus the transition that you and Derek talked about towards performance advertising. Fundamentally, can you grow North American ad revenue without reversing the trend in users? And I guess related to that, just given the growth that everyone is excited about on the subscription side of the business, how are you balancing your own time and focus on the Subscription business versus the Ad business overall? Hey, thanks for taking the question. you know Evan, it looks like your North American Ad business was down, you know, call it about 7% with the growth really, the overall growth driven by subscription. hey thanks for taking the question you know evan it looks like your north american ad business was down you know call it about 7% with the growth really the overall growth driven by subscription I'm wondering how much of that downdraft in ad revenue is being caused by the drop in North American DAUs versus the transition that you and Derek talked about towards performance advertising. i'm wondering how much of that downdraft in ad revenue is being caused by the drop in north american daus versus the transition that you and derek talked about towards performance advertising Fundamentally, can you grow North American ad revenue without reversing the trend in users? fundamentally can you grow north american ad revenue without reversing the trend in users And I guess related to that, just given the growth that everyone is excited about on the subscription side of the business, how are you balancing your own time and focus on the Subscription business versus the Ad business overall? and i guess related to that just given the growth that everyone is excited about on the subscription side of the business how are you balancing your own time and focus on the subscription business versus the ad business overall

Speaker 5: Yeah. Hey, thanks, Rich. I think, you know, at a high level, just looking at the North America DAU trend, it has been improving over the past two quarters after we pulled back on broad-based user acquisition spend. You know, I think we currently forecast something like a decline of 1 million daily active users in North America in Q2, but we also see a path to flat quarter-over-quarter if we can continue to land product improvements. Yeah. yeah Hey, thanks, Rich. hey thanks rich I think, you know, at a high level, just looking at the North America DAU trend, it has been improving over the past two quarters after we pulled back on broad-based user acquisition spend. i think you know at a high level just looking at the north america dau trend it has been improving over the past two quarters after we pulled back on broad-based user acquisition spend You know, I think we currently forecast something like a decline of 1 million daily active users in North America in Q2, but we also see a path to flat quarter-over-quarter if we can continue to land product improvements. you know i think we currently forecast something like a decline of 1 million daily active users in north america in q2 but we also see a path to flat quarter-over-quarter if we can continue to land product improvements I think, you know, more interestingly, though, under the hood, monetizable daily active users, meaning users who, you know, see an ad or make an in-app purchase or have a subscription, they've actually grown in North America and the U.S. over the past two years, with a meaningful increase, obviously, with the launch of Sponsored Snaps, which really extended ad reach into the messaging surface. Overall, the monetizable user trends have been improving while the North America large customer business, you know, has struggled and put some downward pressure on the overall Ad business. What has been encouraging to see is that the North America SMB business grew approximately 30% year-over-year in Q1. There's some nice momentum in the North America SMB business. I think, you know, more interestingly, though, under the hood, monetizable daily active users, meaning users who, you know, see an ad or make an in-app purchase or have a subscription, they've actually grown in North America and the U.S. over the past two years, with a meaningful increase, obviously, with the launch of Sponsored Snaps, which really extended ad reach into the messaging surface. i think you know more interestingly though under the hood monetizable daily active users meaning users who you know see an ad or make an in-app purchase or have a subscription they've actually grown in north america and the u.s over the past two years with a meaningful increase obviously with the launch of sponsored snaps which really extended ad reach into the messaging surface Overall, the monetizable user trends have been improving while the North America large customer business, you know, has struggled and put some downward pressure on the overall Ad business. overall the monetizable user trends have been improving while the north america large customer business you know has struggled and put some downward pressure on the overall ad business What has been encouraging to see is that the North America SMB business grew approximately 30% year-over-year in Q1. what has been encouraging to see is that the north america smb business grew approximately 30% year-over-year in q1 There's some nice momentum in the North America SMB business. there's some nice momentum in the north america smb business We have seen some modest improvement, as Derek said, in the large customer segment. We're very focused on that large customer segment, especially around upper funnel brand advertising and, you know, with new leaders in place, with the team working more effectively together, you know, we'd really like to see some more progress there as we work through the year. You know, the direct revenue opportunity is a very large opportunity for us, you know, just given the frequency of use and the passion, you know, that our community, you know, really has for Snapchat. You know, we're continuing to develop the product offering. It's something we love to do. We have seen some modest improvement, as Derek said, in the large customer segment. we have seen some modest improvement as derek said in the large customer segment We're very focused on that large customer segment, especially around upper funnel brand advertising and, you know, with new leaders in place, with the team working more effectively together, you know, we'd really like to see some more progress there as we work through the year. we're very focused on that large customer segment especially around upper funnel brand advertising and you know with new leaders in place with the team working more effectively together you know we'd really like to see some more progress there as we work through the year You know, the direct revenue opportunity is a very large opportunity for us, you know, just given the frequency of use and the passion, you know, that our community, you know, really has for Snapchat. you know the direct revenue opportunity is a very large opportunity for us you know just given the frequency of use and the passion you know that our community you know really has for snapchat You know, we're continuing to develop the product offering. you know we're continuing to develop the product offering It's something we love to do. it's something we love to do You know, as I mentioned, creating new tiers as well, which, you know, we think can contribute to increasing overall subscription ARPU. You know, as I mentioned, creating new tiers as well, which, you know, we think can contribute to increasing overall subscription ARPU. you know as i mentioned creating new tiers as well which you know we think can contribute to increasing overall subscription arpu

Speaker 10: Thank you. The following comes from Nitin Bansal with Bank of America. You may proceed. Thank you. thank you The following comes from Nitin Bansal with Bank of America. the following comes from nitin bansal with bank of america You may proceed. you may proceed

Speaker 9: Thank you for taking my question. Snapchat+ subscriber growth and revenue growth has remained quite strong. You mentioned Memories and Lens+ as like the key drivers behind the recent strength. Can you talk about, like, how sustainable do you believe the current growth trajectory is over the medium term, and whether you see any additional opportunities to deepen monetization and retention as the feature set continues to expand? Thank you. Thank you for taking my question. thank you for taking my question Snapchat+ subscriber growth and revenue growth has remained quite strong. snapchat+ subscriber growth and revenue growth has remained quite strong You mentioned Memories and Lens+ as like the key drivers behind the recent strength. you mentioned memories and lens+ as like the key drivers behind the recent strength Can you talk about, like, how sustainable do you believe the current growth trajectory is over the medium term, and whether you see any additional opportunities to deepen monetization and retention as the feature set continues to expand? can you talk about like how sustainable do you believe the current growth trajectory is over the medium term and whether you see any additional opportunities to deepen monetization and retention as the feature set continues to expand Thank you. thank you

Speaker 5: Yeah. We're really excited about the growth in direct revenue, and we do think the Subscription business and In-App Purchases as well can continue to contribute to our overall revenue growth. I think, you know, the importance for us is really just focusing on the user experience, making sure we're really delivering things that folks view as valuable to their overall product experience. I think recent additions like Creator Subscriptions, for example, both strengthen the content ecosystem by building, you know, deeper relationships between users and creators, creating new ways for creators to monetize, and obviously contributing to the overall direct revenue business. Lens+. I already mentioned, but I think is a really meaningful opportunity just given the excitement and momentum we see around AI creative tools and AI editing for images and videos. Yeah. yeah We're really excited about the growth in direct revenue, and we do think the Subscription business and In-App Purchases as well can continue to contribute to our overall revenue growth. we're really excited about the growth in direct revenue and we do think the subscription business and in-app purchases as well can continue to contribute to our overall revenue growth I think, you know, the importance for us is really just focusing on the user experience, making sure we're really delivering things that folks view as valuable to their overall product experience. i think you know the importance for us is really just focusing on the user experience making sure we're really delivering things that folks view as valuable to their overall product experience I think recent additions like Creator Subscriptions, for example, both strengthen the content ecosystem by building, you know, deeper relationships between users and creators, creating new ways for creators to monetize, and obviously contributing to the overall direct revenue business. i think recent additions like creator subscriptions for example both strengthen the content ecosystem by building you know deeper relationships between users and creators creating new ways for creators to monetize and obviously contributing to the overall direct revenue business Lens+. lens+ I already mentioned, but I think is a really meaningful opportunity just given the excitement and momentum we see around AI creative tools and AI editing for images and videos. i already mentioned but i think is a really meaningful opportunity just given the excitement and momentum we see around ai creative tools and ai editing for images and videos We certainly think that that could help, as, you know, drive ARPU higher over time. You know, the core Snapchat+ offering is really important to us, and I think we've been excited to see that folks who have entered through that Memories Storage entry point, you know, selecting into Snapchat+ to get those additional features, and that's also been a tailwind as well. We certainly think that that could help, as, you know, drive ARPU higher over time. we certainly think that that could help as you know drive arpu higher over time You know, the core Snapchat + offering is really important to us, and I think we've been excited to see that folks who have entered through that Memories Storage entry point, you know, selecting into Snapchat + to get those additional features, and that's also been a tailwind as well. you know the core snapchat + offering is really important to us and i think we've been excited to see that folks who have entered through that memories storage entry point you know selecting into snapchat + to get those additional features and that's also been a tailwind as well

Speaker 10: Thank you. The next question comes from Mark Shmulik with Bernstein. You may proceed. Thank you. thank you The next question comes from Mark Shmulik with Bernstein. the next question comes from mark shmulik with bernstein You may proceed. you may proceed

Speaker 7: Yes, thanks for taking the question. Evan, sorry, just another one on direct revenue, but, you know, I've kind of always come back to that kind of quote, you know, "It may not be the business you set out to kinda go after, but might be the one you're best suited to deliver." You know, when you look at kind of the torque and acceleration in that and the imminent kind of launch of Specs, is there a different way to think about what Snapchat looks like 12, 24 months from now that, you know, may be quite different than what you were thinking of six, 12 months ago? Yes, thanks for taking the question. yes thanks for taking the question Evan, sorry, just another one on direct revenue, but, you know, I've kind of always come back to that kind of quote, you know, "It may not be the business you set out to kinda go after, but might be the one you're best suited to deliver." You know, when you look at kind of the torque and acceleration in that and the imminent kind of launch of Specs, is there a different way to think about what Snapchat looks like 12, 24 months from now that, you know, may be quite different than what you were thinking of six, 12 months ago? evan sorry just another one on direct revenue but you know i've kind of always come back to that kind of quote you know "it may not be the business you set out to kinda go after but might be the one you're best suited to deliver." you know when you look at kind of the torque and acceleration in that and the imminent kind of launch of specs is there a different way to think about what snapchat looks like 12 24 months from now that you know may be quite different than what you were thinking of six 12 months ago

Speaker 5: Hey, Mark. Yeah, I think that's a really inspiring question, something we've thought a lot about. Obviously, we worked on Specs for, I think, something like 12 years now. We really have believed that we can innovate and build awesome products for our community that they wanna buy. I think seeing that reflected in the direct revenue business and in Snapchat+ has really built a lot more confidence, you know, in the team because we love to innovate for our community. I think, you know, being able to demonstrate that our community's willing to pay for that innovation, I think, really bodes well for the future of the platform and the future of Specs. Certainly a lot of opportunity there. We're really excited to have more diversified revenue. Hey, Mark. hey mark Yeah, I think that's a really inspiring question, something we've thought a lot about. yeah i think that's a really inspiring question something we've thought a lot about Obviously, we worked on Specs for, I think, something like 12 years now. obviously we worked on specs for i think something like 12 years now We really have believed that we can innovate and build awesome products for our community that they wanna buy. we really have believed that we can innovate and build awesome products for our community that they wanna buy I think seeing that reflected in the direct revenue business and in Snapchat+ has really built a lot more confidence, you know, in the team because we love to innovate for our community. i think seeing that reflected in the direct revenue business and in snapchat+ has really built a lot more confidence you know in the team because we love to innovate for our community I think, you know, being able to demonstrate that our community's willing to pay for that innovation, I think, really bodes well for the future of the platform and the future of Specs. i think you know being able to demonstrate that our community's willing to pay for that innovation i think really bodes well for the future of the platform and the future of specs Certainly a lot of opportunity there. certainly a lot of opportunity there We're really excited to have more diversified revenue. we're really excited to have more diversified revenue Obviously, the growth has been fantastic, and it should just, you know, help us create a much more resilient business over time. Obviously, the growth has been fantastic, and it should just, you know, help us create a much more resilient business over time. obviously the growth has been fantastic and it should just you know help us create a much more resilient business over time

Speaker 10: Thank you. The next question comes from Eric Sheridan with Goldman Sachs. You may proceed. Thank you. thank you The next question comes from Eric Sheridan with Goldman Sachs. the next question comes from eric sheridan with goldman sachs You may proceed. you may proceed

Speaker 4: Thanks so much for taking the question. Maybe building on that answer, Evan, can you talk a little bit about some of the execution pieces that still have to be put in place as you look towards the remainder of this year with respect to the Specs rollout? Can you also talk to the Qualcomm collaboration, and how to think about what that means for where you wanna go as a platform and an ecosystem going forward? Lastly, just how should we be thinking about agentic AI as sort of an interface for Specs over the maybe into long term as well? Thanks so much. Thanks so much for taking the question. thanks so much for taking the question Maybe building on that answer, Evan, can you talk a little bit about some of the execution pieces that still have to be put in place as you look towards the remainder of this year with respect to the Specs rollout? maybe building on that answer evan can you talk a little bit about some of the execution pieces that still have to be put in place as you look towards the remainder of this year with respect to the specs rollout Can you also talk to the Qualcomm collaboration, a nd how to think about what that means for where you wanna go as a platform and an ecosystem going forward? can you also talk to the qualcomm collaboration, a nd how to think about what that means for where you wanna go as a platform and an ecosystem going forward Lastly, just how should we be thinking about agentic AI as sort of an interface for Specs over the maybe into long term as well? lastly just how should we be thinking about agentic ai as sort of an interface for specs over the maybe into long term as well Thanks so much. thanks so much

Speaker 5: Yeah, there a lot of great questions in there, probably could talk for hours about that. I think, you know, just looking ahead to the launch of Specs later this year, it's just all hands on deck to execute, deliver an amazing product experience. We hope folks will join us at AWE on June 16th. We'll have more to share, you know, on our progress on Specs. Certainly we are spending a lot of time on the long-term roadmap there as well. As you mentioned, you know, the way that people are using their computers is changing really dramatically, I think that that's gonna be evident, you know, in the adoption of wearables and the adoption of Specs over time. Yeah, there a lot of great questions in there, probably could talk for hours about that. yeah there a lot of great questions in there probably could talk for hours about that I think, you know, just looking ahead to the launch of Specs later this year, it's just all hands on deck to execute, deliver an amazing product experience. i think you know just looking ahead to the launch of specs later this year it's just all hands on deck to execute deliver an amazing product experience We hope folks will join us at AWE on June 16th. we hope folks will join us at awe on june 16th We'll have more to share, you know, on our progress on Specs. we'll have more to share you know on our progress on specs Certainly we are spending a lot of time on the long-term roadmap there as well. certainly we are spending a lot of time on the long-term roadmap there as well As you mentioned, you know, the way that people are using their computers is changing really dramatically, I think that that's gonna be evident, you know, in the adoption of wearables and the adoption of Specs over time. as you mentioned you know the way that people are using their computers is changing really dramatically i think that that's gonna be evident you know in the adoption of wearables and the adoption of specs over time People are gonna spend less time hunched over their computers or their phones, typing away on keyboards, and spend more time supervising agents who are doing that work on their behalf. We actually had a team member who, with AI, built out a pretty cool lens called Agent Center where you can, you know, oversee and manage your agents through Specs, you know, with the current developer version of the glasses. Which is a pretty cool way, you know, to stay on top of what your agents are getting done for you without carrying your laptop around. Certainly, I think a lot of opportunity there, and the way that people are using computing is changing so fundamentally in so many ways at this moment. People are gonna spend less time hunched over their computers or their phones, typing away on keyboards, and spend more time supervising agents who are doing that work on their behalf. people are gonna spend less time hunched over their computers or their phones typing away on keyboards and spend more time supervising agents who are doing that work on their behalf We actually had a team member who, with AI, built out a pretty cool lens called Agent Center where you can, you know, oversee and manage your agents through Specs, you know, with the current developer version of the glasses. we actually had a team member who with ai built out a pretty cool lens called agent center where you can you know oversee and manage your agents through specs you know with the current developer version of the glasses Which is a pretty cool way, you know, to stay on top of what your agents are getting done for you without carrying your laptop around. which is a pretty cool way you know to stay on top of what your agents are getting done for you without carrying your laptop around Certainly, I think a lot of opportunity there, and the way that people are using computing is changing so fundamentally in so many ways at this moment. certainly i think a lot of opportunity there and the way that people are using computing is changing so fundamentally in so many ways at this moment We're just so excited to get this product out into the world soon. We're just so excited to get this product out into the world soon. we're just so excited to get this product out into the world soon

Speaker 10: Thank you. Our last question comes from Dan Salmon with New Street Research. You may proceed. Thank you. thank you Our last question comes from Dan Salmon with New Street Research. our last question comes from dan salmon with new street research You may proceed. you may proceed

Speaker 1: Great. Good afternoon, everyone. Evan, can we hear maybe a little update on how you and the company are addressing various pieces of legislation and litigation around the world regarding potential restrictions on teen social media and oftentimes mobile phone use as well? Just love to hear a little bit more about age verification work, including with the App Stores, how your legal and policy teams are approaching the issue as it evolves in different jurisdictions, and how you and the team are planning for different ranges of potential outcomes. Thanks. Great. great Good afternoon, everyone. good afternoon everyone Evan, can we hear maybe a little update on how you and the company are addressing various pieces of legislation and litigation around the world regarding potential restrictions on teen social media and oftentimes mobile phone use as well? evan can we hear maybe a little update on how you and the company are addressing various pieces of legislation and litigation around the world regarding potential restrictions on teen social media and oftentimes mobile phone use as well Just love to hear a little bit more about age verification work, including with the App Stores, how your legal and policy teams are approaching the issue as it evolves in different jurisdictions, and how you and the team are planning for different ranges of potential outcomes. just love to hear a little bit more about age verification work including with the app stores how your legal and policy teams are approaching the issue as it evolves in different jurisdictions and how you and the team are planning for different ranges of potential outcomes Thanks. thanks

Speaker 5: Thanks so much for the question. It's certainly something we care a lot about, and we invest deeply, you know, in keeping people safe on Snapchat. You know, we're thinking a lot about how we continue to evolve the platform. I think one of the biggest challenges we face is that we often get lumped in with social media, even though Snapchat's really different. It's focused on communication, especially between friends and family, and we see that validated in third-party research that continues to show that Snapchat can have a positive impact on well-being and on relationships. We really are, you know, proud of the positive impact that we can play in people's lives, and we have to do a lot of work to continue differentiating ourselves from more traditional social media platforms. Thanks so much for the question. thanks so much for the question It's certainly something we care a lot about, and we invest deeply, you know, in keeping people safe on Snapchat. it's certainly something we care a lot about and we invest deeply you know in keeping people safe on snapchat You know, we're thinking a lot about how we continue to evolve the platform. you know we're thinking a lot about how we continue to evolve the platform I think one of the biggest challenges we face is that we often get lumped in with social media, even though Snapchat's really different. i think one of the biggest challenges we face is that we often get lumped in with social media even though snapchat's really different It's focused on communication, especially between friends and family, and we see that validated in third-party research that continues to show that Snapchat can have a positive impact on well-being and on relationships. it's focused on communication especially between friends and family and we see that validated in third-party research that continues to show that snapchat can have a positive impact on well-being and on relationships We really are, you know, proud of the positive impact that we can play in people's lives, and we have to do a lot of work to continue differentiating ourselves from more traditional social media platforms. we really are you know proud of the positive impact that we can play in people's lives and we have to do a lot of work to continue differentiating ourselves from more traditional social media platforms I think age assurance is certainly, you know, an important issue for us. It's something that we're, you know, continuing to improve on the platform. We did integrate with Apple's new offering. Unfortunately, that offering requires users to essentially agree to share their age with Snapchat rather than being something that's on by default. That does, in some ways, limit its usefulness. We are exploring other, you know, additional age assurance practices. You know, we've implemented things like facial scanning or ID verification in Australia, and that's something we may roll out more broadly, you know, as things progress through the year. I think age assurance is certainly, you know, an important issue for us. i think age assurance is certainly you know an important issue for us It's something that we're, you know, continuing to improve on the platform. it's something that we're you know continuing to improve on the platform We did integrate with Apple's new offering. we did integrate with apple's new offering Unfortunately, that offering requires users to essentially agree to share their age with Snapchat rather than being something that's on by default. unfortunately that offering requires users to essentially agree to share their age with snapchat rather than being something that's on by default That does, in some ways, limit its usefulness. that does in some ways limit its usefulness We are exploring other, you know, additional age assurance practices. we are exploring other you know additional age assurance practices You know, we've implemented things like facial scanning or ID verification in Australia, and that's something we may roll out more broadly, you know, as things progress through the year. you know we've implemented things like facial scanning or id verification in australia and that's something we may roll out more broadly you know as things progress through the year

Speaker 10: This concludes our question-and-answer session, as well as Snap Inc's first quarter 2026 earnings conference call. Thank you for attending today's session. You may now disconnect. This concludes our question- and- answer session, as well as Snap Inc's first quarter 2026 earnings conference call. this concludes our question- and- answer session as well as snap inc's first quarter 2026 earnings conference call Thank you for attending today's session. thank you for attending today's session You may now disconnect. you may now disconnect