As it prepares specs for the masses, Snap’s fourth quarter shows revenue growth but fewer daily users

Snap has a mission to diversify its revenue streams, moving from a business model in which it largely pursues advertising revenue to one where it can also make money through subscriptions and, eventually, Devices. The company’s latest quarterly earnings report shows that the company has so far had moderate success with this strategy.

In the fourth quarter, Snap’s revenue It was $1.7 billionwhich increased by 10% year-on-year. Its average revenue per user also rose slightly (to $3.62 from $3.44). The company’s net income reached $45 million, up from $9 million the previous year, the company’s earnings report showed.

The company also continued to generate a significant amount of revenue from Snap+, the paid subscription service offered by the platform It launches again in 2022. The number of subscribers to the service increased by 71% compared to last year, reaching 24 million.

While these numbers may indicate a company headed in the right direction, the earnings report also shows that the system had slightly fewer daily active users last quarter — falling from 477 million to 474 million. The report shows that these users declined in North America and Europe, while their number increased slightly in the rest of the world.

Reuters also reports The company expects its revenues during the first quarter of this year to be lower than previous analyst estimates, as competition from Facebook, Instagram, and TikTok reduces its advertising profits.

During Wednesday’s earnings call, CEO Evan Spiegel focused on the company’s newest offerings, including its latest efforts Charging users for memories Storage — a feature that allows users to save and store their snapshots — is planning to launch the spec later this year. The company has not released a public version of its augmented reality glasses since 2019. In anticipation of that event, Snap recently He declared creation From a new subsidiary, Specs Inc., which focuses solely on further development of eyewear.

“Our long-term vision for augmented reality extends beyond the smartphone and into a future where computing becomes more natural, contextual, and seamlessly integrated into the real world,” Spiegel said. The CEO added that it was important to develop a “strong independent brand” for the spec, as he said the hardware product could appeal to a “different audience segment” than Snapchat’s “core audience.”

However, it appears that the strategy behind the specification may not be fully resolved yet. Later in the conversation, Spiegel continued: “We’re very close to launch, and the key here is really, you know, stabilizing the launch and making sure that we’re delivering an exceptional product. And then, you know, I think we have a lot of flexibility to think about how we want to leverage it going forward.”