Why Snap Stock Was Sliding This Week

Key Points

• The social media mainstay posted a fairly deep loss on the bottom line in its most recently reported quarter.

• It also announced it was taking on $550 million of new debt in the form of a senior notes issue.

• 10 stocks we like better than Snap ›

This was hardly a good week to be a Snap (NYSE: SNAP) shareholder, as the social media company's shares were getting rocked after it published its second-quarter earnings report. Outside of that, the company announced it was going to the well in an effort to raise more capital.

The stock stumbled toward the weekend with a nearly 17% week-to-date fall in its price as of Friday before market open, according to data compiled by S&P Global Market Intelligence.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Not the most inspiring quarter

The quarter saw Snap book revenue of just under $1.35 billion, representing a rise of 9% year over year. That percentage rate increase matched that for daily active users (DAUs; a critical metric for the social media industry), which totaled 469 million. Another industry yardstick, average revenue per user (ARPU), however, only inched up by $0.01 to $2.87.

Image source: Getty Images.

Meanwhile, the company's net loss deepened, to almost $263 million ($0.16 per share) from the year-ago deficit of nearly $249 million.

This performance was broadly in line with analyst expectations. The consensus pundit estimate for revenue matched the actual $1.35 billion, while that for net loss was $0.15 per share.

In a conference call, Snap management proffered guidance for its current (third) quarter, saying it expected a rise in DAUs to around 476 million, with revenue landing at slightly under $1.48 billion to a bit over $1.5 billion.

New debt to come

Snap soon followed its earnings release announcement with an announcement that it was aiming to raise $550 million in fresh borrowings (upsized from its original target of $500 million). The company is floating a series of senior notes at that aggregate principal amount, with annual interest of nearly 6.88%. They mature on March 15, 2034.

Should you invest $1,000 in Snap right now?

Before you buy stock in Snap, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Snap wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,099,758!*

Now, it’s worth noting Stock Advisor’s total average return is 1,046% — a market-crushing outperformance compared to 181% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of August 4, 2025

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.