Snap Inc. (SNAP) Securities Class Action Lawsuit Filed [September 30, 2025]

Introduction to Snap Inc. (SNAP) Securities Class Action Lawsuit

A federal securities fraud class action has been filed against Snap Inc. (NYSE: SNAP) covering April 29, 2025 through August 5, 2025, inclusive. Investors allege the company misled the market by expressing confidence in its ad platform and execution while providing assurances about advertising revenue expectations for Q2 and full-year 2025. Behind those assurances, the complaint states that advertising revenue growth had fallen sharply—from about 9% in the first quarter to approximately 1% in April—due to Snap's own execution failure. The truth allegedly surfaced when management later revealed an internal ad platform change caused auctions to clear at reduced prices, depressing revenue. After the disclosure, Snap's stock fell sharply, affecting investors who bought during the class period.

Snap Inc. (SNAP) Securities Lawsuit Case Details

Case Name: Abdul-Hameed v. Snap, Inc., et al.
Case No.: 2:25-cv-07844
Jurisdiction: U.S. District Court, Central District of California
Filed on: August 21, 2025

Snap Inc. (SNAP) Company Profile

Snap, Inc. (“Snap”) is a technology company best known for Snapchat, a visual messaging application. It connects brand and direct response advertisers to users through multiple ad types, integrations, and auction-based placements on the Snapchat platform.

Snap Inc. (SNAP) Securities Lawsuit Class Period

April 29, 2025–August 5, 2025, inclusive. 

All investors who purchased or otherwise acquired Snap securities between April 29, 2025 and August 5, 2025, may fall within the proposed class definition as described in the complaint.

Allegations in the Snap Inc. (SNAP) Securities Class Action Lawsuit

The lawsuit targets Snap Inc., along with Evan T. Spiegel (Co-Founder, Chief Executive Officer, and Director) and Derek Andersen (Chief Financial Officer). According to the complaint, these defendants told investors they had made meaningful progress with the company's advertising platform and were executing against 2025 strategic priorities, setting expectations for improved performance and free cash flow.

On April 29, 2025, during the company's earnings call, Spiegel said Snap was well positioned to deliver improved business performance based on progress with the ad platform. That same day, Andersen told investors he remained optimistic about Snap's long-term prospects because of improvements to the ad platform and emphasized continued focus on execution. In the Q&A, Andersen reiterated that management would stay focused on executing for customers and improving the ad platform, and discussed early‑quarter headwinds in terms of external factors such as macro uncertainty and changes to the de minimis exemption, while April was referenced by analysts in their questions.

Meanwhile, the complaint alleges a different picture inside the business. Advertising revenue growth, which the company reported at roughly 9% in the first quarter of 2025, had dropped to approximately 1% in April. Plaintiffs allege this was not due to external headwinds but to Snap's own execution failures on its ad platform, facts that were concealed while management conveyed confidence in its execution and growth trajectory.

The Truth Emerges

On August 5, 2025, Snap announced its second quarter financial results and, on the earnings call, revealed an internal problem with the ad platform. Management disclosed that in an effort to improve advertiser performance, Snap had shipped a change that caused some campaigns to clear the auction at substantially reduced prices. The company stated it had reverted the change and that advertising revenue growth improved as advertisers adjusted their bidding strategies.

That same day, Andersen acknowledged the growth pattern: ad revenue grew about 9% in the first quarter but declined to approximately 1% in April before largely recovering through May. These revelations undercut prior assurances about execution strength and contradicted earlier framing of April headwinds as external.

Market Reaction

Following the August 5, 2025 disclosure, the market reacted immediately. Snap's stock fell from a closing price of $9.39 per share on August 5, 2025 to $7.78 per share on August 6, 2025, a decline of about 17.15% in the span of a single day.

Next Steps

• Submissions for lead plaintiff are due October 20, 2025.  
• The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.
• The Court will then consider motion for class certification.
• The Court will later consider a Motion to Dismiss.

To learn if you are eligible for recovery under the SNAP securities class action lawsuit, visit the case submission page here.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.