14 Years at Snap Inc.

Dear Team,

After starting the year with considerable momentum, we stumbled in Q2, with ad revenue growth slowing to just 4% year-over-year. Fortunately, the year isn’t over yet. We have an enormous opportunity to re-establish momentum and enter 2026 prepared for the most consequential year yet in the life of Snap Inc. We’re poised to reach one billion Snapchatters, introduce Specs to the world, and generate record revenues diversified across direct revenue (meaning in-app purchase and subscriptions) as well as advertising. The cutoff for inclusion in the Fortune 500 was $7.4 billion in revenue in 2025, and with analyst estimates suggesting Snap could reach nearly $6 billion in revenue in 2025, we’re not far from achieving Fortune 500 status. In short, there’s a lot for us to look forward to.

Snap operates in one of the most competitive industries in the world. Our largest competitors are worth trillions, invest hundreds of billions in capital each year, and are being sued for monopolistic practices. We also face smaller, nimbler competitors growing ad revenues faster off a smaller base with leaner cost structures and higher gross margins. Snap currently occupies a unique position, with significantly more scale and engagement than smaller players, but with less scale and market power than our larger competitors. Squeezed between the tech giants and smaller competitors, on the verge of greatness, we find ourselves in a crucible moment. I suppose it’s a bit like being the middle child.

This year, in an effort to sharpen our focus and increase clarity, we established working groups across the “key issues” we are facing as a company. At a high level, our strategy is simple: build upon Snap’s core strengths and accelerate the areas where we are seeing strong growth while always putting our community first. Mobile video and performance advertising are increasingly commoditized and we must focus on what makes us different to win more engagement from our community and more investment from advertisers, while simultaneously making it even easier for marketers to leverage Snapchat in a way that feels familiar. Below you will find the key issues and a brief summary of the actions we are taking. While we often discuss the need to prioritize a small number of critically important things as a team, the truth is that we need to do a lot, very well, to navigate this crucible.

Advertising Revenue

We are going to reaccelerate our advertising growth by focusing where the opportunity is greatest: medium-sized customers. This is a segment where our penetration is still below half a percent with high-fit customers who often spend at the scale of large accounts and retain at high rates. Our business development efforts have already brought in more than 2,000 new activations this year, with each of these sellers each contributing nearly $6 million in annualized revenue on average in the US. By rebalancing our sales coverage and product roadmap around these customers, we have a durable path to faster growth.

At the same time, we are doubling down on the foundations of our ad platform. Over the past year, we stabilized marketplace dynamics, launched tCPA v2, and rolled out the App Power Pack, which bundles performance-driving features like Sponsored Snaps and Playables. Early App Power Pack pilots in the Americas and India are delivering a 25% lift in app installs with unique converters up 18%. These improvements are improving our competitiveness in the lower funnel, where consistent performance earns advertiser trust and unlocks incremental budgets.

We must also emphasize what makes Snapchat different. Sponsored Snaps and Promoted Places are proving to be unique, high-impact formats. Sponsored Snaps drive up to 22% more conversions and nearly 20% lower CPAs when included in campaigns. Promoted Places have already shown double-digit visitation lifts in early testing, opening up an entirely new opportunity for advertisers. These products work because they are built on the core of Snapchat’s product value: communication, maps, and friends.

We remain under 1% share of a global digital ad market that is growing 13% year-over-year, which means the opportunity is enormous. Closing that gap requires consistent delivery against lower funnel objectives, reigniting brand dollars with differentiated formats like Sponsored Snaps, strengthening third-party measurement, and telling a sharper story through our new “Say it in a Snap” narrative. And it requires continuing to invest in AI to compound performance over time in ranking, creative generation, and personalization. If we execute with conviction, we can turn our scale and uniqueness into durable, market-beating growth.

Direct Revenue

We are accelerating our direct revenue efforts by expanding Snapchat+ with new, premium features, and bolder merchandising. We are also planning to introduce livestreaming and launch new tools to help creators build deeper relationships with their biggest fans. With more than 15 million subscribers and more than $700 million in ARR, direct revenue has become one of Snap’s fastest-growing opportunities. By investing in a stronger payments infrastructure, better lifecycle management, and creator monetization tools, we can make direct revenue a durable multi-billion dollar growth driver for Snap, powered by what our community values most: friendship, creativity, and self-expression.

Gross Margins

At 52%, our gross margin is meaningfully below many of our competitors largely because of our higher infrastructure costs as a share of revenue and the meaningful portion of revenue we share with creators, publishers, and platforms. To begin to close this gap, we are focusing on a set of initiatives designed to improve efficiency, reduce costs, and better monetize the depth of engagement with our core products. On infrastructure, our goal is to hold spending flat from 2025 to 2026 by improving compute and machine learning utilization, and tailoring our cost to serve different features based on their long-term monetization potential. On content, as we introduce more tools for creators to earn direct revenue and partner with brands, we are evolving our revenue sharing arrangements with creators and publishers so that we can continue to sustainably reward the unique creativity of our community. And on payments, we see an opportunity to reduce platform fees by building our own first-party wallet, which could eventually result in significant savings. In total, we believe these efforts can improve gross margins by several percentage points, creating a path to 60% gross margins and putting us on stronger footing to scale profitably while continuing to invest in our community.

Growth and Engagement

Our path to reaching one billion monthly active users by 2026 is clear, but it requires us to be honest about where we are today. We reach more than 75% of 13–34 year olds in over 20 countries, including the US, but growth has lagged in North America, with daily active users declining 2% year-over-year to 98 million in Q2. 

Content engagement globally continues to climb, but in North America we are challenged by declines in Friend Stories that haven’t yet been offset by enough growth in Spotlight. Historically, Friend Stories served as one of our most important conversation starters, creating the spark that turned a story reply into a chat and a chat into a deeper friendship. But today, conversations are increasingly being sparked in new ways, like sharing content from Spotlight.

We need to embrace this transition fully. That means adjusting our ranking systems to prioritize sharing and conversations, building new ways to play games and remix Lenses with friends, and making it effortless to share Spotlight into Stories and Chat. Our goal is not just to increase view time but to power the flywheel of communication: content sharing that sparks conversations, conversations that strengthen friendships, and friendships that inspire more creativity.

We’re making significant investments to improve Spotlight, from better tools for real Snapchatters to post and be discovered, to larger, fresher models that make Spotlight feel more responsive with new creators and timely trends, to higher quality playback that rivals or exceeds the competition, as well as exploratory work on generative recommendations. We recently shipped streaming logjoin, reducing end-to-end latency by two hours and driving measurable gains in favorites. We rolled out dynamic embeddings, removing the technical limits that capped our model size and unblocking scale. These breakthroughs mean our content systems can now update continuously, moving toward two-hour training cycles instead of days-long delays.

The result will be a content experience that feels more alive, distributing the creators, trends, and moments that matter right now. And critically, we’re elevating real creators: the millions of Snapchatters who use our Camera every day to share authentic, original perspectives. By connecting these creators with a broader audience, we can make Snapchat feel more relevant, relatable, and rewarding.

At the same time, we’re developing new conversation starters that span new Status updates, Flashbacks, Topics, and games, so that Snapchatters have more reasons to reach out and more fun ways to connect.

We also have tremendous headroom to continue growing with new Snapchatters around the world. To increase the number of new users on Snapchat, we must sharpen how we position Snapchat as the fastest, easiest, and most fun way to stay close with your real friends. That means telling the story of Snapchat with bolder campaigns like Say it in a Snap, increasing visibility at cultural tentpoles like sports and music, and making it unmistakable that Snapchat is where real friends connect first.

The AI of it All

Snapchat is likely one of the largest AI-based video and image generation and editing services in the world, with people using Lenses more than 8 billion times per day. While the underlying technology continues to commoditize, and open source proliferates, the customer relationship is becoming far more important.

That’s our opportunity. Snapchat is one of the only places where AI can be woven directly into the fabric of your friendships, Snaps, and conversations. We don’t just want to make AI smarter. We want to make it more personal, social, and fun. Our vision for AI enhances your relationships, instead of replacing them.

To do this, we’re focused on five priorities: First, we’re building a partner platform that makes Snap an easy and valuable distribution channel for AI agents. Second, we’re developing the personalization layer, creating experiences that strengthen friendships and deepen connections by learning from interactions across Snapchat. Third, we’ll unlock direct revenue with subscriptions, giving people access to premium AI tools through Lens+ and Platinum bundles. Fourth, we’ll roll out Sponsored AI Chats so people can experiment with AI tools from brands directly in chat. Finally, we’ll keep innovating in social AI experiences, showing the world what’s possible when AI isn’t just a solo tool but something you can share with your friends.

At the enterprise level, our strategy is moving from experimentation with generative AI tools to scaled, outcome-driven adoption that transforms the way we work. While team use of tools like ChatGPT and Gemini has taken off and we’ve seen early wins with workflow-specific pilots such as code assist, the true opportunity lies in embedding automation, agentic workflows, and AI-driven augmentation into the core of our business. Our immediate priority is to double down on four key functions—Engineering, Sales, Trust & Safety, and Customer Support—where AI is already delivering measurable impact. 

Engineering is already seeing momentum, with AI now generating about a quarter of all code and new agentic infrastructure underway to further boost developer productivity. In Sales, we’re beginning to cut down manual processes, surface smarter insights, and even pilot customer-facing agents that simplify advertiser support. Trust & Safety is harnessing AI to dramatically reduce response times, shift moderation from reactive to proactive, and automate over half of review tasks—all while maintaining accuracy and safety standards. Customer Support has seen automation rise from 3% to 67% of inquiries, freeing team members to focus on higher-value work and dramatically lowering response times. By combining short-term productivity gains with long-term investments in platforms, skills, and infrastructure, we are building an operating model that scales with AI at its core.

At the same time, we’re also experiencing friction between teams eager to accelerate with AI tools and our security teams. While Snap was not compromised in the recent Salesloft Drift incident, attackers stole OAuth tokens through the Drift–Salesforce integration from hundreds of organizations, gaining access to customer support case data and contact information. This is the kind of risk we face with AI integrations: large language models mix code and data, making them vulnerable to prompt injections that can leak sensitive credentials. The downstream effects, including compromised systems, lateral movement, and exposure of trade secrets, could be similar. We’re putting strong guardrails in place and articulating a clear framework to determine what’s fine, what’s OK with caution, and what’s too risky, so teams can move quickly and safely.

Trust & Safety

Nothing matters more than the trust of our community as we navigate one of the most intense regulatory environments our industry has ever faced. Around the world, views about online services and the rules that apply to them are under scrutiny, with particular focus on age verification, parental consent, data use, and algorithm transparency as well as the legal foundations that enable internet companies to operate. These pressures often reinforce one another, creating an environment where every product decision carries heightened scrutiny.

Our response must be both clear-eyed and constructive. We are constantly working to enhance Snapchatters’ safety and privacy to strengthen trust while keeping Snapchat simple and familiar. At the same time, we are defending ourselves vigorously in court, while also engaging regulators with transparency and diligence on new mandates such as Europe’s Digital Services Act.

These challenges underscore the importance of resilience. Just as we are building trust with advertisers through marketplace stability and product innovation, we must also demonstrate to policymakers, parents, and our community that Snapchat continues to be both safe and sustainable. By doing so, we not only mitigate risk but also reinforce the long-term credibility of our brand, ensuring that Snap remains a trusted partner to our community and an attractive platform for advertisers and creators alike.

Reliability and Performance

Over the past few quarters, we’ve encountered reliability issues that have reminded us how critical performance is to our community and partners. Even short disruptions can affect millions of people and lead to frustration for advertisers. At our scale, small problems can quickly become big ones, which is why we’re taking a closer look at how we ship and safeguard our products.

We are addressing these issues head-on. Teams across Snap are rewriting brittle systems like our notifications service from the ground up, revamping our iOS app architecture so it opens as fast as the native camera, building a new playback engine that supports super-resolution, and consolidating dozens of ad ranking models to improve consistency and speed. We’re also institutionalizing a Unified Safe Rollout program to prevent risky changes from slipping into production, new Ops programs to enforce service-level rigor, and AI-driven runbooks to help engineers diagnose issues in minutes instead of hours.

But this is about more than tooling. It’s about culture. We’re ring-fencing reliability work in every roadmap, holding executive reviews of Sev-1 and Sev-2 incidents, and making operational excellence part of how we evaluate performance and promotions. Leaders are expected to be in the details of outages and regressions. And we’re putting ourselves in our customers’ shoes by dogfooding more aggressively on low-end Android phones, where our day-to-day experience has lagged.

Our reliability and performance goal is simple: make Snapchat feel instant and effortless, every time you open it. In 2026, we will complete the core rewrites, expand safe-rollout coverage to 100% of Tier-0 services, adopt freshness SLAs across all critical ML models, and set clear targets for incident reduction and performance gains. Reliability doesn’t often get headlines, but it’s the foundation upon which everything else rests, from advertiser trust to daily communication with friends.

Startup Energy, Snap Scale

When we started Snap, we were a handful of people in my Dad’s dining room, moving fast to prove that ephemerality and a camera-first design could empower people to express themselves and build stronger relationships. That same energy and willingness to move fast, risk failure, and build the impossible is the only way we’re going to win against competitors ten times our size and startups ten times more fearless.

Our current stock price reflects doubt. At this valuation, there’s startup-style return potential. But unlike a seed-stage company, we’re a team of 5,000, serving almost half a billion people every day. That means extreme accountability. Every line of code, every sales call, every minute, every day matters.

We’re going to try a new way of organizing around a handful of our big, new bets. Five to seven teams—squads of 10 to 15 people—will run like startups inside Snap, with single-threaded leaders accountable for outcomes. Weekly demo days, 90-day mission cycles, and a culture of fast failure will keep us moving. Our platform teams will be enablers, handing squads the toolkits and guardrails to ship safely at speed.

We’ve already seen what this looks like. Snapchat+ started as a small, cross-functional squad that moved with urgency and launched fast. In under three years, it scaled from zero to ~15 million paying subscribers and nearly $700M in ARR, now driving more than half of our incremental revenue growth. That’s the model: a startup within Snap, leveraging our brand, distribution, and infrastructure, and fueled by focus, accountability, and hustle. Now we need to replicate that energy across all of Snap. No one will hand us the future. We have to earn it.

If you want a 9-5 job, there are plenty of companies to choose from. But if you want to be part of a team where every person matters, where the upside is massive but the work is hard, where accountability is extreme but the potential rewards are extraordinary, that’s Snap. We have the platform, the distribution, the data, and the vision to reinvent personal computing itself. What we need now is to prove it.

Specs

For more than a decade, we’ve been building towards a new kind of computer, one that doesn’t live on a desk or in your pocket, but one you wear, built inside a pair of glasses. Specs are the continuation of our vision to make computing more human. They lift your eyes up from screens, merge the digital and physical world, and allow you to interact with computing the way you already do with the world by using your hands and voice.

The need for Specs has become urgent. People spend over seven hours a day staring at screens. AI is transforming the way we work, shifting us from micromanaging files and apps to supervising agents. And the costs of manufacturing physical goods are skyrocketing. Specs address all three challenges with eyes-up computing, a new AI-native operating system that understands your context, and the replacement of physical products with photons, reducing waste while opening a vast new economy of digital goods.

Specs are not about cramming today’s phone apps into a pair of glasses. They represent a shift away from the app paradigm to an AI-first experience — personalized, contextual, and shared. Imagine pulling up last week’s document just by asking, streaming a movie on a giant, see-through, and private display that only you can see, or reviewing a 3D prototype at scale with your teammate standing next to you. Imagine your kids learning biology from a virtual cadaver, or your friends playing chess around a real table with a virtual board. Specs make computing social by providing shared experiences in the real world.

Specs are also an enormous business opportunity. One pair of Specs can substitute for many screens. Our operating system, personalized with context and memory, compounds in value over time. A marketplace of digital goods, from spatial Lenses to virtual tools, has near-zero marginal cost and global reach. Specs are how we move beyond the limits of smartphones, beyond red-ocean competition, and into a once-in-a-generation transformation towards human-centered computing.

The Crucible Moment

While our share price performance has not yet reflected the full potential of our business, we have a clear path forward. We must reaccelerate revenue growth, improve gross margins, and grow our community and engagement to expand our long-term potential. Achieving net income profitability would also help offset the dilution risk of stock-based compensation and establish a stronger foundation under our share price. These are the facts of our crucible moment.

But facts alone don’t define Snap. What defines us is not the obstacles in front of us, but how we face them together. Every time people have doubted us, every time we’ve been underestimated, we’ve come back stronger. We’ve done that by holding fast to our values: being kind, smart, and creative. That spirit runs through every team, every line of code, every Snap.

This moment isn’t just about survival. It’s about proving that a different way of building technology, one that deepens friendships and inspires creativity, can succeed in a world that often rewards the opposite. 

We serve a community of 932 million people. We have the vision. And most importantly, we have each other.

The road ahead won’t be easy. But when I think about the team I get to work with every day, and your commitment, your brilliance, and your generosity of spirit, I know we will rise to the challenge. The crucible is where strength is forged. Together, we will emerge not just stronger, but ready to redefine the future of personal computing.

Thank you for believing in our mission, and for bringing your full selves to it. I’m proud, honored, and grateful to build Snap with all of you.

— Evan