Snap Inc. reported fourth-quarter earnings on Wednesday showing improved revenue and margins compared with last year, even as results and guidance came in slightly below market expectations. Executives highlighted changes on the earnings call, outlining new strategies for driving growth.
Management positioned the quarter as part of a transition away from relying so much on advertising.
Alongside its growing subscription audience, the company emphasized plans to focus on hardware, with its upcoming augmented reality glasses, Specs, as a long-term growth driver.
CEO Evan Spiegel pointed to revenue diversification on the conference call, noting that Specs is a strategic investment as the company moves into augmented reality and consumer hardware.
Subscription Numbers Accelerate While Audience Growth Narrows
Snap’s fourth quarter made it clear that the business is no longer focused solely on adding more users. Adjusted EBITDA and operating cash flow rose year over year, even as the platform shed 3 million daily active users from the previous quarter.
The contrast between rising revenue and declining daily active users was evident throughout the quarterly earnings report. Q4 revenue reached $1.72 billion, reflecting an annual increase despite lower daily user numbers.
As advertising is expected to slow this year, subscriptions are driving Snap’s momentum.
Snapchat+ stood out in the earnings report, with the paid subscription base increasing 71% year over year. This growth supports a more predictable revenue stream going forward.
The subscription model leans into personalization but prioritizes practical value. Snapchat+ subscribers get customized icons, creative AI tools, and additional Memories storage that increases capacity from 5GB to 250GB.
The uptick in subscriptions suggests more Snapchat users are willing to pay for features and storage in the app. As subscriptions grow, Snap is proving it can expand profits by increasing average user spend rather than relying on user expansion.
Specs AR Glasses a Focal Point of Conference Call
Snap continued the conversation around its augmented reality glasses on the Q4 earnings call following a recent announcement that they would be researched and developed under Specs Inc., a new subsidiary.
Introducing Specs Inc. Today, we’re establishing Specs Inc. as a distinct subsidiary within Snap Inc. Built to make computing more human, Specs blend digital experiences with the real world. Want to help build what’s next? We’re hiring.
— Snap Inc. (@Snap) January 28, 2026
Learn more: https://t.co/QL00b769HN pic.twitter.com/qCR3gSTy9v
The move will give Snap its own hardware unit, signaling that the glasses are being treated as a separate product line rather than an extension of the core social media app. Management framed the structure as a way to focus more on AR and develop the wearable computing device separately from Snapchat.
Specific details about the release of Specs are still unclear. CEO Evan Spiegel made a point of prioritizing a successful launch, noting that specific details about monetization won’t come until later.
These comments suggest Snap is still determining how AR hardware fits into its larger business strategy. For now, Snap Inc. appears to be preparing the product for release, with pricing and revenue plans still to be determined.
What Snap Sees for the Future
Snap’s fourth quarter signals a strategic shift. As user growth matures, subscriptions and hardware are changing how Snapchat and the brands that rely on its advertising tools drive performance.
New paid features and AR hardware point to new opportunities for brands marketing with the popular platform beyond social media advertising. Our experts at Avenue Z help brands learn about platform changes in real time.
Contact us to discuss how Snapchat’s evolving features and AR hardware can fit into your digital marketing strategy.
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