Snap inc earnings are coming up on may 6. A lot of people expect the state of daily active users in North America to be the determining factor in how the stock price will move after the report. They argue that’s the main concern for shareholders. It makes sense because for the past many quarters numbers have been flat or even declining and it’s a concern because it’s their most profitable region by far. I however believe that it’s not a big concern because the market is simply maturing and because of that they are deliberately going for profitability at the expense of growth. I think the bigger factor in how the stock price will move right after the report is how well Snapchat+ subscriptions are going.
The reason most people are worried about North American DAUs is pure math. North American users are roughly **3x more valuable** than European users and **10-15x more valuable** than those in the "Rest of World" category. In recent quarters (including Q4 2025), North American DAUs actually **declined by 5-6% year-over-year** (dropping to around 94 million). If the user base in the most profitable region shrinks, the advertising engine has to work twice as hard just to keep revenue flat.
But, Snap is pivoting toward a **"monetization per head"** strategy rather than a "growth at all costs" strategy. As of early 2026, Snapchat+ has surged to roughly **25 million subscribers**. At $3.99/month, that’s an annualized revenue run rate of nearly **$1.2 billion**. Unlike advertising, which requires expensive sales teams and constant infrastructure tweaks to battle Apple’s privacy changes, subscription revenue is extremely high-margin. Management has been vocal about cost-cutting (including the \~16% workforce reduction earlier this month). If they can show that 25 million people are paying for the app, it proves the platform has "utility" value, not just "scrolling" value. Even if DAUs are flat, if ARPU rises because of Snapchat+ and better ad targeting (like the "Sponsored Snaps" rollout), I think the stock will pop. Snap recently raised its Q1 revenue outlook to roughly **$1.53 billion**. If they beat this while showing a path to consistent net income, I think the market will forgive a slight user dip in North America. If Snap proves they can squeeze more profit out of a stable North American audience via subscriptions, the "maturing market" narrative becomes a bull case rather than a bear one.