06:36 AM EDT, 08/06/2025 (MT Newswires) -- Snap (SNAP) shares dropped early Wednesday as the social media company reported a second-quarter loss that unexpectedly widened amid higher operating expenses, while issues tied to a planned update to its advertising platform weighed on overall revenue growth.

The Snapchat parent announced a net loss of $0.16 per share for the June quarter late Tuesday, compared with a loss of $0.15 a year ago, which was the consensus on FactSet. Total costs and expenses rose to $1.6 billion from $1.49 billion in the prior-year period. The stock fell 17% in the most recent premarket activity.

Revenue rose 9% to $1.34 billion, but was just shy of the Street's view for $1.35 billion. "Our rate of topline growth was impacted by a number of factors in (the second quarter), including an issue related to our ad platform, the timing of Ramadan, and the effects of the de minimis changes," Chief Financial Officer Derek Andersen said during a conference call, according to a FactSet transcript.

The White House announced last month that it will suspend duty-free "de minimis" exemption for low-value commercial shipments, effective Aug. 29.

As part of Snap's efforts to improve advertiser performance, the company "shipped a change" that resulted in some ad campaigns clearing the "auction at substantially reduced prices," Andersen said on the call. "We have since reverted this change and advertising revenue growth has improved as advertisers adjust their bid strategies to achieve their objectives," the CFO added.

Advertising revenue came in at $1.17 billion in the second quarter, representing an annual increase of 4%, while other revenue surged 64% to $171 million, Andersen told analysts. Daily active users inclined 9% year over year to 469 million, ahead of the average analyst estimate of 467.4 million. Average revenue per user ticked up to $2.87 from $2.86, but missed the market's forecast of $2.89.

For the ongoing quarter, the company anticipates revenue to come in between $1.48 billion and $1.51 billion, Andersen said on the call. The Street is looking for $1.48 billion. Daily active users are pegged at 476 million, compared with the current consensus on FactSet of 475.2 million.

"We believe it is prudent to continue to balance our level of investment with realized revenue growth, and are updating our full-year cost structure guidance to reflect our current investment plans," according to Andersen. The company continues to project infrastructure costs per daily active user to be in a range of $0.82 to $0.87 per quarter for the ongoing year, and expects the metric to be in the top half of the range in the third quarter, Andersen said.