# Snap's user loss and AR glasses gamble While beating profit expectations, the company's core challenges persist. - **Source:** [The Next Web](https://brifing.si/source/afe24b20-b275-4c19-b9a6-8bb3c8babae7) - **Published:** 2026-08-04 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/2f5faae9-05b4-45a1-9a2e-8bf5e1c74e31 ## Outperforming expectations Snap exceeded expectations in Q3 2023 with $1.6 billion in revenue. The company reduced its net loss to $164 million and achieved positive free cash flow of $121 million. Revenue grew 19% year-over-year, boosted by World Cup advertising. However, the stock rally started from depressed levels, with shares still down 37% year-to-date. ## Unbalanced growth picture While Snap's core advertising revenue grew just 9%, 'other revenue' from subscriptions and paid lenses surged 85% to $316 million. This indicates Snap is focusing more on monetizing existing users rather than expanding its core product offering. The sustainability of this strategy in a competitive market remains questionable. ## Loss of valuable users Snap's daily active users reached 493 million (5% growth), but all growth came from outside North America. North American DAUs fell 7% to 92 million. The critical issue is that North American users generate about $10 per quarter in value, compared to just $1 for users in other regions. ## Cost control measures The company reported adjusted profits of $250 million, a significant improvement from $41 million a year ago. After sharp headcount reductions this year, Snap is targeting $500 million in annual savings. While cost discipline has improved cash flow, the company appears to be stopping its bleeding rather than returning to growth. ## AR glasses bet CEO Evan Spiegel is positioning the $2,195 'Specs' AR glasses as Snap's next frontier. Launching September 16 in Los Angeles, Spiegel calls them the company's 'largest long-term opportunity.' However, investors remain skeptical about Snap's ability to compete alone against tech giants like Apple, Meta, and Alphabet. ## Investor skepticism When pressed for pre-order numbers, Spiegel only cited 'a huge amount of interest' without providing concrete data. He admitted mass-market adoption might not come until the end of the decade. These comments raised concerns that demand may be softer than expected for the premium-priced product. ## North American paradox While remaining North American users became 23% more valuable due to higher ad prices, Snap's user base in this critical region continues to shrink. The company's strategy of squeezing more revenue from a smaller, wealthier audience shows short-term gains but raises long-term sustainability questions. ## Buying time Snap has bought itself time through cost restructuring and World Cup-related revenue. However, the fundamental challenge remains: how to reignite growth in the very markets where it's losing its most valuable users. While AR glasses represent a long-term bet, North American user erosion continues in the near term. ## Sources covering this story - https://thenextweb.com/news/snap-q2-2026-earnings-beat-north-america-users-fall-specs — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._