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Snap runs Snapchat, a free app that makes money by showing ads between photos, videos, and short shows.
Snap Inc. owns Snapchat, a free phone app where people send disappearing photos and videos to friends, post stories, and watch short shows. Almost all of its money comes from advertising — roughly 90% or more — because brands pay to place video and image ads between snaps, stories, and creator content. Think of it as a free TV channel where the shows are your friends' daily lives, and the commercials pay for everything. Its main users are younger people, especially teens and people in their 20s, mostly in North America and Europe, though it is growing in other regions too. The company is based in Santa Monica, California, which helps it stay close to the entertainment and advertising industries.
The rest of revenue comes from a few smaller lines. Snap sells a subscription called Snapchat+ for a few dollars a month, which gives users extra features like custom app icons and early access to new tools — this has grown quickly and now brings in several hundred million dollars a year. It also sells hardware: Spectacles, its camera glasses, though that business is tiny. Snap's main costs are running huge computer servers to store and deliver videos, paying employees (especially engineers), and spending on research to build new features like augmented reality lenses that overlay digital objects on the real world. The company has struggled to be profitable for most of its life, but it has been cutting costs and buying back some of its own stock in recent years to try to boost the share price.
Snap was started in 2011 by Evan Spiegel, Bobby Murphy, and Reggie Brown while they were students at Stanford. The original idea was simple: send a photo that disappears, so you do not have to worry about it living online forever. That caught on fast with young people who wanted a more private, playful way to chat. Snapchat later added Stories, where posts vanish after 24 hours — a format that Instagram and others copied. It also invented the camera-first design, opening straight to the camera instead of a feed. The company faces fierce competition from Meta's Instagram and TikTok, plus changing privacy rules that make it harder to target ads. It went public in 2017. To grow, Snap is pushing augmented reality shopping, creator monetization, and its subscription business. It uses its cash to fund these bets, repurchase shares, and occasionally make small acquisitions, though it has no dividend.
Saved answer · last researched 15 Oct 2026