Snap reported its third-quarter results on 4 November, and the numbers were mixed for a company betting heavily on Snap SPECS, its AR glasses. Snap swung to a profit but missed on revenue and daily users, and shares fell by more than 10 percent, according to CNBC. The glasses themselves are still only promised for “later this fall.”
The numbers
Revenue rose 14 percent year on year to $1.72 billion, a little below the $1.73 billion analysts expected, according to CNBC. Snap made a net profit of $56 million, against a net loss of $104 million in the same quarter last year, and adjusted earnings came in well ahead of forecasts. Daily active users reached 495 million, short of the 499 million expected, and monthly users reached 977 million. Snap also said that from early 2027 it will report monthly users, not daily users, as its main audience figure. The company’s own results release describes the quarter as one “investing in our long-term vision for augmented reality with the launch of SPECS.”
What was said about SPECS
On the earnings call, CEO Evan Spiegel said Snap is “beginning to ship specs later this fall,” without giving a date. He also said the company has run more than 10,000 demos at its Los Angeles pop-up. That is the same message Snap gave in June, when it announced a fall shipping window, and it still gives buyers no firm date. The call gave no price or pre-order details, and the glasses were previously priced at around $2,200.
The call also gave no breakdown of what SPECS is costing. Snap’s chief financial officer said only that planned investment in SPECS is paced “against product, ecosystem, and economic milestones,” with no dollar figure attached. Spiegel pointed to developers, a golf-coaching lens made with PGA professionals, and enterprise uses such as remote experts guiding technicians.
Why the profit matters
A profitable quarter gives Snap breathing room to keep funding hardware, and its fourth-quarter revenue forecast of $1.95 billion to $1.99 billion has a midpoint above what analysts expected. Even so, shares fell, because revenue and user numbers both came in light. SPECS is a costly bet from a company that still has to prove its core business is growing fast enough to fund it. A $2,200 pair of AR glasses is an enthusiast and developer product, and the question is whether Snap can turn it into a business before patience runs out.
Our take
At AugmentedReality.com, we think the key detail is the date, or rather the lack of one. Snap has spent months building attention with demos, an honorary role for Robert Downey Jr. and a pop-up, and it still hasn’t said when anyone can buy a pair. With November under way, “later this fall” is running out of room. Whether SPECS ships on time may matter as much for Snap’s credibility as the earnings numbers do.