Answering a caller’s query about Snap Inc. (NYSE:SNAP) during the lightning round of the September 17 Mad Money episode, Jim Cramer said:
Yeah, you know what? Look, I wish I could get behind those guys, I really do. And maybe they can show a profit, and I can get more positive. But it’s been a loser, and I think that we need profitability before I can get behind it.
Expanding Topline Revenue and Subscription Growth
Snap Inc. showed positive revenue momentum during the second quarter of 2026, generating $1.6 billion in total sales, which marked a 19% expansion year-over-year. Global daily active users grew 5% year-over-year to 493 million, while monthly active users reached 971 million worldwide. Driving much of this top-line acceleration was the expansion of non-advertising revenue streams, which climbed 85% year-over-year to $316 million, driven by Snapchat+, Memories Storage, and Lens+. Adjusted EBITDA surged to $250 million from $41 million a year earlier, while free cash flow reached $121 million during the quarter, highlighting operational progress within the core platform.
Persistent Net Losses and Regional Engagement Headwinds
Despite top-line expansion, Snap Inc. continues to struggle with GAAP profitability, recording a net loss of $164 million for the second quarter of 2026. While this represents a narrow improvement from the net loss posted in the same quarter of 2025, cumulative losses continue to weigh on market sentiment. North American daily active users contracted 7% year-over-year to 92 million, highlighting an engagement headwind in its highest-value advertising region. The stock valuation metrics remain under pressure, with shares trading around $5.4 after declining roughly 33% year-to-date. The balance sheet carries $3.5 billion in total debt, creating elevated financial leverage while current analyst consensus projects Snap to remain loss-making in 2026 before reaching positive net income in 2027.
Slightly Declining Hedge Fund Ownership and Elevated Short Interest
According to Insider Monkey’s database tracking top hedge funds, 45 hedge funds held positions in Snap Inc. at the end of the second quarter, representing a slight decline from 46 funds recorded in the prior quarter. Among those funds, Irenic Capital Management was the largest shareholder with 30 million shares. At the same time, short interest accounts for 9.39% of the public float, highlighting that a notable segment of the market continues to position for near-term price volatility or valuation downside.
Cramer remained firm that Snap Inc. must achieve verified net profitability before earning his endorsement. He views the stock as a historical laggard, warning investors that top-line gains and adjusted cash flows cannot substitute for true bottom-line earnings. Until management eliminates recurring GAAP losses and stabilizes user engagement in North America, the stock seems like an unconvincing long-term holding.
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