Snap's International Revenue Trends Highlighted Amid Persistent North America Weakness

What happened

A Zacks article advises investors to scrutinize Snap's international revenue patterns, suggesting they could influence Wall Street's outlook on the stock. The DeepValue master report reveals Snap's Q3 2025 revenue grew 10% year-over-year, buoyed by a 54% surge in other revenue, but ad revenue increased only 5% with North America ad revenue up just 1%, indicating regional stagnation. Geographically, 2024 revenue was concentrated in North America ($3.236 billion), with Europe ($957 million) and Rest of World ($1.168 billion) contributing smaller but growing shares, though international markets face competitive and pricing pressures. The article's focus on international trends aligns with the report's data showing global ad impressions rose 22% while eCPM fell 13%, implying volume-driven growth abroad may be masking domestic softness rather than signaling robust monetization. Consequently, while international revenue is a critical component, investors must evaluate whether it can sustainably drive overall double-digit growth without North America stabilization or improved profitability.

Implication

The attention on international revenue underscores Snap's dependency on global markets to compensate for flat North America ad growth, but this reliance exposes the company to regional economic volatility and intense competition from larger players like Meta and TikTok. International expansion may support top-line numbers in the short term, yet it often comes with lower ARPU and higher customer acquisition costs, potentially limiting margin improvement and FCF generation. For the investment thesis to improve, Snap must demonstrate that international revenue can consistently achieve double-digit growth with stable or rising eCPMs, a scenario not yet evident from the current mid-single-digit ad growth and declining pricing power. Key indicators to watch include quarterly geographic revenue splits, international ARPU trends, and management's commentary on large-brand adoption outside North America, as these will signal whether diversification is effective. Ultimately, while international trends are a necessary factor, they alone are insufficient to shift the 'WAIT' rating without concurrent progress in North America recovery, subscription scaling, or Perplexity monetization.

Thesis delta

The article reinforces the known role of international revenue in Snap's growth narrative, but it does not alter the core investment thesis, which already accounts for geographic diversification as a partial mitigant to North America softness. No shift in the 'WAIT' rating is justified, as international growth must be sustained at higher rates and coupled with improved profitability to meaningfully change the risk-reward profile. Investors should continue to await clearer evidence of durable double-digit revenue growth across all regions before considering an upgrade, as highlighted in the DeepValue report's criteria for a potential buy signal.