Snap is undergoing a major internal transformation by reorganizing itself. In his latest annual company letter, CEO Evan Spiegel revealed that the company will now be structured into small “startup squads” of 10 to 15 members, aiming to compete more effectively with much larger rivals.
This decision comes at a time when the company, which employs around 5,000 people, is under increasing strain. Advertising revenue grew by only 4% in the second quarter, and daily active users in North America dropped by 2% to 98 million—a concerning trend in Snap’s most critical market.
Despite these challenges, Spiegel points to a key success: Snapchat+ subscriptions now bring in over $700 million in recurring yearly revenue, with a subscriber base exceeding 15 million. This makes direct revenue “one of Snap’s most rapidly expanding opportunities.”
Snap is also investing further in Specs, developing its own augmented reality glasses that Spiegel believes could eventually take the place of smartphones. He describes them as “a once-in-a-generation leap toward computing that revolves around humans.” (Meta and Google are envisioning a similar path, teaming up with Ray-Ban and Warby Parker, respectively.)
Acknowledging that the company’s current share price “shows skepticism,” Spiegel says there is “potential for startup-like returns” given Snap’s current valuation of about $12 billion. Not mentioned: this figure is a steep drop from September 2021, when Snap’s market capitalization peaked at $116 billion during the height of social media enthusiasm.
