Snap Inc. (SNAP) Q2'26 Review Improved Advertising Performance & Operating Margin Leverage Drove Solid Results

Equity Research 4 August 2026 | 12:00AM EDT

Snap Inc. (SNAP) Q2’26 Review: Improved Advertising Performance & Operating Margin Leverage Drove Solid Results

SNAP 12m Price Target: $6.50 Price: $5.04 Upside: 29.0% NEUTRAL Eric Sheridan Snap’s Q2’26 earnings report emphasized a few key themes from | Goldman Sachs & Co. LLC management: 1) the operating momentum of the advertising Alex Vegliante, CFA business drove upside in terms of performance relative to the | Goldman Sachs & Co. LLC company guidance, with platform and product iterations beginning to take hold & drive healthy rate of change (led by a ~56% YoY Emma Huang | Goldman Sachs & Co. LLC improvement in conversions); 2) significant upside in terms of Adj EBITDA & free cash flow as a result of opex discipline, the scope for current and forward gross margin scaled improvements, realization Key Data _____________________________________ Market cap: $9.5bn of restructuring savings & emphasis on stock buyback inside capital Enterprise value: $11.5bn 3m ADTV: $220.6mn allocation (lessening the historical impact of stock based United States compensation dilution); 3) the company remains focused on the Americas Internet M&A Rank: 3 platform computing shift toward AR/Spatial computing in terms of GS Forecast __________________________________ their SPECS (hardware + software development) which is on track 12/25 12/26E 12/27E 12/28E

for a Fall 2026 launch; & 4) the scope for revenue diversification (on Revenue ($ mn) New Revenue ($ mn) Old 5,931.4 5,931.4 6,812.9 6,608.1 7,552.4 7,266.6 8,317.1 7,945.7 display in the operating results and as a potential for increased mix EBITDA ($ mn) 689.5 1,291.2 1,523.5 1,822.8 EBIT ($ mn) ( in forward periods) driven by Snap+, Lens+ and medium/long-term EPS ($) New ( by SPECS platform. In total, Snap management expressed optimism EPS ($) Old ( P/E (X) NM NM 97.6 32.4 about AI driven ad platform improvements and how it might sustain Dividend yield (%) -- -- -- -- durable levels of growth in forward periods. Net debt/EBITDA (X) 3.6 1.6 0.5 (0.4)

6/26 9/26E 12/26E 3/27E Over the short term, we expect investor focus will remain on the EPS ($) ( ) ability to continue building momentum in ad revenues in forward GS Factor Profile ______________________________ periods (including a likely short duration impact of World Cup Growth

benefit in summer 2026 and its impact deeper into 2026), further Financial Returns proof around consumer demand & go-to-market strategy with Multiple respect to SPECS in 2H 2026 & how much balance can be maintained in terms of operating margin trajectory. Beyond the next Integrated

6-12 months, we see SNAP as building toward its multi-year Percentile 20th 40th 60th 80th 100th strategic vision for where consumer engagement is shifting (AR/spatial computing) and shifting its platform/product evolution SNAP relative to Americas Coverage SNAP relative to Americas Internet (including SPECS hardware) to meet this vision. We maintain our Neutral rating & adjust our 12-month PT from $6.00 to $6.50 as we Source: Company data, Goldman Sachs Research estimates. See disclosures for details. update our estimates for this earnings report and management commentary.

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.

Goldman Sachs Snap Inc. (SNAP)

Snap Inc. (SNAP) Balance Sheet ($ mn) _______________________________________ NEUTRAL Rating since Jul 22, 2022 12/25 12/26E 12/27E 12/28E Cash & cash equivalents 1,030.4 1,480.1 2,700.2 4,309.0 Accounts receivable 1,372.2 1,480.0 1,581.7 1,660.9 Inventory -- -- -- -- Ratios & Valuation __________________________________________ Other current assets 2,182.2 1,969.7 1,815.8 1,684.6 12/25 12/26E 12/27E 12/28E Total current assets…