Snap Reports Q4 Revenue Growth Amid User Decline as AR Glasses Launch Approaches

05.02.2026

Snap Inc. is actively pursuing a strategic pivot to diversify its revenue streams beyond traditional advertising, incorporating subscription services and hardware products into its business model. The company's Q4 financial results demonstrate mixed progress in executing this transformation strategy.

Financial Performance Highlights

For Q4, Snap reported revenue of $1.7 billion, representing a 10% year-over-year increase. Key financial metrics include:

• Average revenue per user (ARPU) increased to $3.62 from $3.44
• Net income reached $45 million, up from $9 million in the prior year
• Snap+ subscription service grew 71% YoY, reaching 24 million subscribers since its 2022 launch

User Engagement Challenges

Despite positive revenue trends, the platform experienced a slight contraction in daily active users (DAU), declining from 477 million to 474 million. Geographic analysis reveals user attrition concentrated in North America and Europe, while other regions showed modest growth. Additionally, the company projects Q1 revenue below analyst estimates due to intensifying competition from Meta's Facebook and Instagram, as well as TikTok, impacting advertising revenue.

Strategic Initiatives and Hardware Expansion

CEO Evan Spiegel emphasized emerging revenue opportunities during the earnings call, including:

• Monetization of the Memories feature through storage fees
• Upcoming launch of Specs augmented reality glasses later this year
• Establishment of Specs Inc., a dedicated subsidiary focused on AR hardware development

This marks Snap's first consumer-facing AR glasses release since 2019. Spiegel articulated the company's vision: "Our long-term vision for augmented reality extends beyond the smartphone to a future when computing is more natural, contextual and seamlessly integrated into the real world."

The CEO emphasized the importance of developing a "strong standalone brand" for Specs, noting the hardware product may appeal to different demographic segments than Snapchat's core user base. However, Spiegel acknowledged that commercialization strategies remain fluid, stating the immediate priority is "nailing the launch and making sure that we deliver an extraordinary product" before finalizing long-term capitalization plans.

Sources:
Snap Inc. Q4 Earnings Report
Reuters: Snap Forecasts Quarterly Revenue Below Estimates
WCNC: Snapchat Charge for Memories Storage