Snap is working to expand its business beyond advertising. The company is focusing more on subscriptions and future hardware products. Its latest Q4 earnings report shows mixed but steady progress.
Revenue rises in Q4
In the fourth quarter, Snap reported $1.7 billion in revenue, up 10% year over year.
Average revenue per user increased slightly, rising from $3.44 to $3.62.
The company also posted $45 million in net income, compared with $9 million a year earlier. This marks a strong improvement in profitability.
Snap+ subscriptions continue to grow
Snap continues to see success with Snap+, its paid subscription service launched in 2022.
Subscriber numbers jumped 71% year over year, reaching 24 million users.
This growth highlights Snap’s efforts to build recurring revenue outside advertising.
Daily users see a small drop
Despite higher revenue, Snap reported a slight decline in daily active users.
The number fell from 477 million to 474 million during the quarter.
The drop came mainly from North America and Europe, while other regions recorded modest growth.
Ad pressure impacts outlook
Snap also warned that its Q1 revenue may fall below analyst expectations.
The company pointed to strong competition from Facebook, Instagram, and TikTok, which continues to impact ad spending.
Focus shifts to new products and Specs
During the earnings call, CEO Evan Spiegel highlighted newer revenue ideas. These include charging users for additional Memories storage, which allows saved Snaps to be archived.
He also discussed plans to launch Specs, Snap’s augmented-reality glasses, later this year.
Snap has not released consumer AR glasses since 2019. Ahead of the launch, the company created a new subsidiary called Specs Inc., focused only on developing the product.
Long-term vision for augmented reality
Spiegel said Snap sees augmented reality as a long-term opportunity beyond smartphones. He explained that Specs will be positioned as a standalone brand and may appeal to a different audience than Snapchat’s core users.
However, Snap is still finalising how it will monetise the product. For now, the company is focused on delivering a strong launch and refining its strategy after release.
