Snap Inc.

Q1 2026 Earnings Call — May 6, 2026

Ross Sandler (Barclays): Hey, guys. The 2Q revenue guidance has a couple-point acceleration baked in at the high end. Just curious, like, given what you said about the Middle East, what's driving that potential improving growth rate? Is it the ad business? Is it Snap Plus? Any additional color there? And then, Evan... So 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.

Derek (Management): Hi, Ross. This is 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 then what we're expecting in Q2. So in Q1, a couple of different factors there on the growth rate. One is we had about a two-point FX tailwind, but we also had the impact of the conflict in the Middle East that really impacted the business in March. And 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 two 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. One, the comps on the growth rate in the prior year are a tailwind into Q2 of approximately five points from the prior year, but that's essentially fully offset by one, what we expect will be a diminished FX tailwind going from about two to about one points approximately. And then 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. And so those two factors combined offset the comp. So with those factors set aside, you're really left with a two-point acceleration at the midpoint of the guide relative to Q1.

That I would attribute to the strength that we are seeing in the North America ads business. So 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. And 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. And 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. So hopefully that gives you good context on what we're seeing there from quarter to quarter and what's driving the acceleration.

Evan (Executive): 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. But fundamentally, we think our job is to operate the business in the long-term interests of our shareholders, and we're going to continue to invest against our core long-term opportunity. Thank you.

Michael Nathanson (Moffat Nathanson): Thanks. I have two for either of you guys. One is we cover Roku and CTV, and what we've seen happen is as Roku has added third-party DSPs, you've been able to really accelerate agros because the walled gardens are hard to compete against. And 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? Why, why not? And then on Snapchat Plus, 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 ability is to raise price here? So anything you can give us on color on the sustainability of Snapchat Plus would be great. Thanks.

Evan (Executive): Yeah, thanks so much for the question. You know, I think on the DSP side, we just always believe 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. So I do think scaling through partners is important. And as Derek mentioned, we do see some opportunity with agencies and by working more closely with them. And so we are pleased to see the growth in those upfront commitments.

On Snapchat Plus, obviously the growth is really exciting. I think there are a couple of different ways to look at the long-term opportunity. One is increased tiers of Snapchat Plus. So we've seen some strong momentum with Lens Plus, which is really anchored around our AI creative and editing tools in the camera. And that, I think, could be a big opportunity for us long term. It's obviously a higher priced offering. And I think there's some real customer value there, obviously, with our strength in the camera and our lens ecosystem. So tiering, I think, is certainly one approach. And then 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. And so as we respond to those requests and continue to build out new features, that tends to drive subscriber growth. With the introduction of memories, we have seen overall retention for Snapchat Plus improve as well, and so that is helping as we look at just the long-term growth and durability of the subscription product.

Maggie (JP Morgan): Hi, this is Maggie on for Doug. Thanks for taking the question. Um, I was wondering if you can just talk a bit more about the broader opportunity you see with AI sponsored snaps, um, and sort of what you're hearing from advertisers in terms of overall interest in something like this. Thank you.

Evan (Executive): Yeah. Hey, thanks Maggie. Uh, you know, advertiser feedback has been really positive. I think mostly because sponsor snaps are showing that chat can be monetized in a way that's really native, uh, 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. So 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 a more direct and more personal way. And 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, of sponsored snaps, adding more direct response features, and then, you know, continuing to work with new partners like Experian to evolve the AI-sponsored snap product.

Rich Greenfield (LightShed Partners): 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. And 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?

Evan (Executive): Yeah. Hey, thanks Rich. So 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. And, you know, I think we currently forecast something like a decline of one 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 improvement. So I think, you know, more interestingly, though, under the hood, monetizable daily active users, meaning users who see an ad or make an in-app purchase or have a subscription, have 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.

So overall, the monetizable user trends have been improving while the North America large customer business has struggled and put some downward pressure on the overall ad business. So what has been encouraging to see is that the North America SMB business grew approximately 30% year over year in Q1. So there's some nice momentum in the North America SMC business. And we have seen some modest improvement, as Derek said, in the large customer segment. So we're very focused on that large customer segment, especially around upper funnel brand advertising. And with new leaders in place, with the team working more effectively together, we'd really like to see some more progress there as we work through the year. And then the direct revenue opportunity is a very large opportunity for us, just given the frequency of use and the passion that our community really has for Snapchat. You know, we're continuing to develop the product offering. It's something we love to do. And, you know, as I mentioned, creating new tiers as well, which, you know, we think can contribute to increasing overall subscription ARPU.

Nathan Bensal (Bank of America): Thank you for taking my question. So Snapchat Plus subscriber growth and revenue growth has remained quite strong. You mentioned memory and lensless as like the key drivers behind the recent strength. Can you talk about how sustainable do you believe the current growth trajectory is over the medium term? And whether you see any additional opportunities for deep end monetization and retention as the feature set continues to expand? Thank you.

Evan (Executive): Yeah, we're really excited about the growth in direct revenue. And we do think that subscription business and in-app purchases as well can continue to contribute to our overall revenue growth. I think 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 deeper relationships between users and creators, creating new ways for creators to monetize and obviously contributing to the overall direct revenue business.

LensPlus, 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. So we certainly think that that could help drive ARPU higher over time. And then the core Snapchat Plus offering is really important to us. And I think we've been excited to see that folks who have entered through that memory storage entry point, selecting into Snapchat Plus to get those additional features. And that's also been a tailwind as well.

Mark Smolik (Bernstein): 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 kind of go after, but it might be the one you're best set 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 may be quite different than what you were thinking of six, 12 months ago?

Evan (Executive): Hey, Mark. Yeah, I think that's a really inspiring question, something we've thought a lot about. Obviously, we've 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 want to buy. And I think seeing that reflected in the direct revenue business and in Snapchat Plus has really built a lot more confidence in the team because we love to innovate for our community. And I think being able to demonstrate that our community is willing to pay for that innovation I think really bodes well for the future of the platform and the future of specs. So 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 help us create a much more resilient business over time.

Eric Sheridan (Goldman Sachs): 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 want to go as a platform and an ecosystem going forward? And then lastly, just how should we be thinking about agentic AI as sort of an interface for specs over the medium to long-term as well. Thanks so much.

Evan (Executive): A lot of great questions in there and 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. And as you mentioned, you know, the way that people are using their computers is changing really dramatically. And I think that that's going to be evident, you know, in the adoption of wearables and the adoption of specs over time, because people are going to 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.

So 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. So 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. And we're just so excited to get this product out into the world soon.

Dan Selman (New Street Research): Great. Good afternoon, everyone. Adam, 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? I'd 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.

Evan (Executive): Thanks so much for the question. It's certainly something we care a lot about, and we invest deeply in keeping people safe on Snapchat. And 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. And so we really are 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 an important issue for us. It's something that we're 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. And so that does in some ways limit its usefulness. So 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.

Q4 2025 Earnings Call — February 4, 2026

will be partially offset by reduced spending on community growth marketing as we adjust these investments to better reflect the long-term monetization potential of each geography. As a result, we estimate that full-year adjusted operating expenses will be approximately $3 billion. For SVC and related expenses, we estimate approximately 1.2 billion in 2026. For Q1 specifically, our guidance range for revenue is 1.5 to 1.53 billion. Our Q1 revenue guidance range excludes any potential revenue from the perplexity integration as we have yet to mutually agree on a path to a broader rollout. Given this revenue range and our investment plans for the year ahead, We estimate that adjusted EBITDA will be between 170 million and 190 million in Q1. As we begin 2026, we are excited to execute on our pivot towards profitable growth and to make incremental progress toward our medium-term goal of delivering meaningful net income profitability. The impacts of this strategic direction are already evident in our Q4 results, and we are incredibly proud of the work our team is doing to build on this momentum in Q1. Thank you for joining our call today, and 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 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then 2. 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 Eric Sheridan with Goldman Sachs. You may proceed. Thanks so much for taking the question, and thanks for all the depth of details in the updates on the quarterly results. I want to talk about one of the forward initiatives, Evan. You know, with SNAP specs as one of the key priorities in the next one to two years, can you just go a little bit deeper into what you've built on the platform and the application and use case side and how you think it feeds into where you want to take the hardware side of the business when we think about the next 12 to 18 months and how this fits into your broader strategic priorities for the company and more particularly for spatial computing longer term. Thanks so much. Eric, thanks so much for the question. We're super excited about what's ahead this year with the launch of specs and obviously graduating from the R&D phase of specs to, you know, broader consumer adoption. And in preparation of that, you know, we've been working on several prior versions of specs, including most recently the version released in 2024 to developers, you know, who can subscribe to to specs and start building lens experiences.

We've seen some people build really spectacular things, whether it's utilities or new educational tools, for example, like an at-home chemistry lab. You can have an augmented reality to even some of the more interesting work we've been doing with the browser and the ability to stream video on a virtual screen grounded in the real world through your glasses. So it's been really exciting to see all the new use cases that developers are building for specs with the current version released back in 2024. And those will be able to run on the forthcoming version of specs released later this year. So I think we'll be able to launch with a really wide variety of compelling experiences, which I think is so important for the early success of a product like this. And We're just really focused on getting the hands of early adopters. We're so fortunate to have this passionate base of developers, you know, hundreds of thousands of developers who have used Lens Studio to build lenses. And I think they're really excited about this forthcoming product. So really trying to engage them and early adopters with specs later this year. is super exciting.

And, you know, I think as we look out, you know, to future generations of the product through the end of this decade, you know, we've got a really clear path here to, you know, lightweight, affordable, and incredibly powerful glasses that can deliver immersive experiences in the real world. Great. Thank you.

Thank you.

The next question comes from Ross Sandler with Barclays. You may proceed. end of the range and it also yep can you hear me we can now yeah go ahead we can now go okay sorry okay the one cue guide uh assumes a pickup and growth at the high end uh and you guys mentioned that there's no perplexity in there could you just talk about what's driving that between dr and brand and how you're kind of expecting trends in 2026 in the ad business to play out. Thank you. Hey, thanks for the question. On the ad side, the biggest focus is continuing to generate additional demand by demonstrating the strong performance of the ad platform. So, you know, at the top of that, we're seeing really strong growth in active advertisers. They were up 28% year over year in Q4. As we continue to invest and scale our S&B go-to-market operations, And that's something you're going to see us build on into 2026. That's part of the investment plan for the year ahead is to continue to scale that out so that we can build on the momentum we have there.

We've seen especially strong growth in the medium customer segment globally, with medium customers in North America in particular being the largest contributor to absolute dollar growth there, which is good. So that's the kind of momentum we want to build on in 2026. We do continue to face some headwinds in the North America large customer business, but there are some bright spots there. including U.S. LCS financial services, vertical, as well as autos. You know, we have new leadership in place over the North America LCS segment. We've got new products to connect brands with Snapchatters, including sponsored snaps and promoted places to build with there, and smart campaign solutions to make it easier for advertisers to leverage the full set of Snapchat placements to make those connections easy and performant. So those will be big themes that we'll be building on in 26 as well. In terms of the guide for Q1, you know, the macro operating environment has thus far remained relatively stable compared to what we saw in Q4. There's a lot of quarter left to go in Q1, of course, but our guidance range is built on the assumption that the macro environment continues to be stable.

I hope that extra color helps a little bit.

Thank you.

The next question comes from Rich Greensville with LightShed Partners. You may proceed. a couple of questions first you know the subscription side which i know evan if i go back to your um your letter a while ago you sort of marked the importance of subscription it seemed like it really accelerated this quarter and i'm curious are you marketing it differently are there new features that you added i know you're you've talked about sort of charging for memories and other things that will add to this but just in terms of what happened in q4 it'd be great to better understand what's happening inside of that snap and then The other thing, I think two years ago, Evan, you got on this earnings call and you talked about the fact that you were sort of refocusing user growth efforts from Android developing markets to the bigger markets like the U.S. where the meat of your monetization was.

And, you know, if I look at sort of where U.S. users or North American users have fallen to at $94 million, Do you need to put even more effort into those efforts to sort of drive U.S. users or North American users? Just what's happening in the North American user market would be great to just better understand, given your focus there. Thanks. Yeah, thanks, Rich. We're definitely excited about what we're seeing on the subscriber side of the business. You know, certainly memory storage plans were a big driver of the subscriber growth. growth that we've seen recently, and also, you know, have helped improve retention rates overall. So that definitely, you know, has been really helpful to the subscription business. And we've got some other great, you know, features on deck coming up this year for the direct pay segment of our business. So really excited about that overall, and I think really helps support our efforts to diversify our revenue in addition to the small and medium customer growth that Derek mentioned. So overall, really excited about the progress on subscriptions and the diversification of our revenue.

You know, as it pertains to user growth, I think, you know, if you take a step back and look at the growth overall of the platform, you know, monthly active users now 946 million. So we're pretty close to our goal of a billion monthly active users. And I think, as you know, over the past three years, our community growth has really outpaced our revenue growth and ARPU has actually declined while we've simultaneously increased the cost to serve, which has put downward pressure on our margins. So as we look at this crucible moment and the pivot to profitability, we have immense daily reach and engagement in many of the most valuable advertising markets, including in North America. And we think we can strike a much better balance between pursuing community growth and also growing average revenue per user. So In addition to that, obviously, we're working through some of the regulatory landscape and some of the shifting user engagement patterns as we focus on organic growth.

But I think taking that all in totality, we've made some choices to reduce community growth marketing spend, to adjust the cost to serve, and to roll out additional paid features like the memory storage plans that we just discussed. And all those can cause headwinds to user engagement. So those changes actually free up more resources to focus on our most valuable geographies. so that we can continue innovating and delivering great customer experiences, which we really believe is the most important driver of long-term growth.

Thank you.

The next question comes from Dan Salmon with New Street Research. You may proceed. Great. Good afternoon, everyone. Evan, I wanted to just talk a little bit more about, as you called it, the sort of litigation or regulatory risk. caused by changes in age verification policies, sort of broader teen smartphone and social media restrictions. You obviously commented on the actions that you took in Australia following the ban going into place there. But what I'm particularly interested to hear a little bit more about is the potential for those types of actions to impact North America. Obviously, a $4 million step down in the DAU this quarter. I'm curious just maybe to unpack a little bit of what drove that more and what the outlook could be there during the year based on some of those litigation risks or regulatory risks you mentioned. Thanks. We're certainly aware of some pending legislation. Obviously, there's quite a bit working its way to the court system right now that would further restrict the use of Snapchat for our community. I think as we look at, for example, global ad revenue from impressions served to users under the age of 18, that revenue is not material.

So I think, you know, looking at sort of the revenue-generating potential of business looking forward, you know, we're not overly concerned about the changing regulatory environment. I will say, you know, one of the things that's very interesting is that if you look at the research studies that look at Snapchat specifically as separate from some of the studies that look at social media in totality. You know, I think what we continue to see, which, you know, makes us proud of the service we've developed, is that Snapchat actually has a positive impact on people's well-being and people's friendships. And that's actually in contrast to other services that don't necessarily have that positive impact. But I think we have had quite a bit of trouble as we look at the regulators explaining how different Snapchat is because there is really this moment you know, where people are expressing concern about, you know, use of social media. So we have to continue making the case that, you know, Snapchat and its orientation around your close friends and your family can have a really positive impact.

I think that's backed up by the research, but certainly it's going to take time to prove that out, and especially as these regulations sort of work their way through the court system. Thank you. The following comes from Ken Goreski with Wells Fargo. You may proceed. Thanks. Maybe first I'll touch on specs. Could you talk about, maybe Evan, can you talk about the kind of synergy between specs and Snap services more broadly and the audience and kind of the developer base? And then talk about, you know, the right way to capitalize that entity. I mean, if there's... If you have confidence in the end product, how do you think about appropriately capitalizing that? Should it happen all within Snap? Should there be outside partners? And how do you accelerate kind of the development and the deployment of specs throughout the ecosystem? I'll stop there. Thank you.

Yeah, well, I think to just maybe take a step back on why we started working on specs in the first place, you know, when we invented Snap and we worked on things like ephemeral messaging or stories that put content in chronological order or even things like opening to the camera, our vision, our work was really designed to make, you know, computing or smartphones feel more human. And we think that's played a really important role in connecting people with their friends and their family. But we also saw a lot of limitations. you know, of the smartphone and of computers. And I think today people are spending something like seven hours a day in front of a screen. And so I think there is at this moment a real opportunity to change what the computer is instead of something that, you know, you're constantly operating using a keyboard and a mouse, something that, you know, now powered by AI can actually get work done for you. And so in that way, it's really a continuation of this vision to try to work to make computing a more human for folks. And so I think now that we are exiting the R&D phase of specs development, there's a couple important things.

One is developing a strong standalone brand. I think specs, the product itself, in many ways appeals to a different audience segment than the core Snapchat audience. And it's going to be really important for us to develop a standalone brand identity. for specs. And then I think longer term, you know, as we look at the rollout and broader deployment of specs, there may be opportunities to, you know, raise additional capital to accelerate, you know, balancing that obviously with our own sort of ownership interest and any potential dilution. So I think right now, you know, given that we're so close to launch, the key here is really just, you know, nailing the launch and making sure that we deliver an extraordinary product. And then, you know, I think we have a lot of flexibility to think about how we want to capitalize it

Thank you.

The next question comes from Justin Patterson with KeyBank. You may proceed. Great. Thank you. Good afternoon. I wanted to talk about agentic coding. We've seen more companies see meaningful improvements in engineering productivity from these tools. How is this being deployed at Snap today? And how should we think about potential benefits, whether it's product velocity, more engagement on the platform, more monetization opportunities, or expense efficiency? Thank you. Yeah, there's just so much opportunity here, obviously. You know, I think now something like 40% of new code at Snap is AI generated. We made a ton of headway with, you know, trust and safety and customer service. in terms of automating those workflows. I think there's a lot of opportunity for the sales workflow as well to empower our sales team, but also to automate quite a bit of that. So certainly we're seeing gains across the board in how we're operating our business today. I also think this can be a real accelerant for our own creativity.

I mean, one of the things we love to do is invent new services, and we've got a bunch of ideas for new apps, for example, that we could build using these AI tools and deploy very, very quickly, leveraging, of course, the distribution we have, our friend graph, some of the unique assets we have, like folks' memories, for example. So I think there's a lot of opportunity here for us to think about how we accelerate the growth of our business and actually develop new services that quickly using these tools. And I think in addition to that, we're just running as fast as we can to roll out new agents across the enterprise, new tools. And especially for a small team like the one we've got at Snap, this is just a massive force multiplier. And I think really will help accelerate a lot of the creative vision we have in terms of turning it into reality. Thank you.

Our last question comes from Benjamin Black with Deutsche Bank. You may proceed. Great. Thanks for taking my question. You know, can you talk about the decision to moderate infrastructure spending at a time when others are ramping spend to drive ad performance? Was there sort of slack in the system? Maybe just talk us through that decision. Thank you. Hey, it's a great question. Thanks for asking it. I think, you know, the first thing I would say just for context, the big driver in the ramp of infrastructure investment over the last couple of years has been a really significant growth in our ML and AI investment, and that was to both support the rebuild of the ad platform and the DR advertising business, and also to support the content business and ranking and personalization and all the work that we've done there. And I think I would say, first and foremost, we intend to continue to invest pretty heavily there. And so that's not an area, you know, focused for pulling back.

You know, as it pertains to infrastructure specifically, there are really two big catalysts where we see a lot of opportunity and are already making progress in terms of driving, you know, margin efficiency for the business and margin expansion. You know, the first there is just our investments in how we handle cost to serve. and getting that in a place where we're calibrating that better relative to the monetization potential of each of the markets in which we're operating. And there's a lot we can do to optimize that. And that's really about the theme that we've been talking about in terms of getting to profitable growth. And so translating that, you know, into the growth and infrastructure really being keyed in against the growth in monetization. The other real opportunity we see here is to take you know, some of the infrastructure things that are costs right now and turn them into revenue generating investments.

And so I think the recent launch of the memory storage plans is a great example of that, where we can take a cost and not only, you know, find ways to make it more efficient, but then also turn it into a revenue generating source of top line growth, which is going to help with even further margin expansion. So a lot of this is about efficiency. A lot of it is about being really sensible about our cost to serve relative monetization potential markets and then scaling efficiently. But those investments in AI and ML will continue to be really important to the performance of the business and both the ads and the content side. So hopefully that gives a little bit more context there. Thanks for asking. This concludes our question and answer session as well as SNAP Inc.' 's fourth quarter 2025 earnings conference call. Thank you for attending today's session. You may now disconnect.