• by Colin Kirkland , Yesterday

Following Snap's recent performance report, which showed weakening ad revenue and a loss of users in the U.S., CEO Evan Spiegel has shared an open letter that addresses the 14-year-old social media platform's current "crucible moment."

“We stumbled in Q2, with ad revenue slowing to just 4% year-over-year,” Spiegel states at the start of the letter, adding that by the end of the year the company aims to reach one billion users, introduce its Apple and Meta AR wearables competitor Specs, and boost subscription and ad revenues.

While competing companies like Meta are worth much more financially than Snap, with infinitely more resources and capital at their disposal, Snapchat has a unique position in the social media landscape, with “significantly more scale and engagement than smaller players, but with less scale and market power,” as Spiegel notes.

According to Spiegel, Snap could reach nearly $6 billion in revenue this year, which would place the company closer to achieving Fortune 500 status.

With 932 million monthly active users, the company is also close to reaching its goal of one billion users.

However, Snap must also manage costs, maximize ad opportunities, and impress consumers with its forthcoming technology products.

In terms of its ad revenue, Spiegel says Snap will “reaccelerate” its advertising growth by investing in medium-sized businesses -- a segment Snap has yet to maximize.

The company plans to rebalance its sales coverage and product roadmap around these businesses -- which have already brought in over 2,000 new activations in 2025, with each seller contributing nearly $6 million in annualized revenue on average in the U.S.

Along with newer ad formats -- including Sponsored Snaps and Promoted Places -- the company's recently unveiled App Power Pack is showing promise, according to Spiegel. He says tests have delivered a 25% lift in app installs, helping improve the company's competitiveness in the lower funnel.

Spiegel says Sponsored Snaps -- currently an inbox-based ad format -- is driving up to 22% more conversions and 20% lower CPAs, while the company’s map-based ad format Promoted Places has shown double-digit visitation lifts in early testing.

To compete for a larger slice of the global digital ad market, Spiegel says Snap must push these new ad formats, strengthen third-party measurement, and continue to invest in its AI ad creation and delivery systems.

With over 15 million subscribers, the company's paid subscription offering Snapchat+ is also a major potential revenue booster, with Spiegel sharing plans to add more features, such as live-streaming functionality, and open-prompt image generation. This year, Snapchat+ is expected to generate over $700 million for the company.

Snap's most competitive and anticipated move may be the launch of its AR Specs, a project that has been in the works for over a decade. In June, Snap announced that its Specs 5 product will enter the market before competing AR wearables from bigger companies like Apple, Google, and Meta.

Like Meta CEO Mark Zuckerberg's insistence on AR glasses' ability to replace consumers’ need for smartphones, Spiegel in his letter shares his belief that “Specs are how we move beyond the limits of smartphones, beyond red-ocean competition, and into a once-in-a-generation transformation towards human-centered computing.”

Without a successful launch of Specs, Snapchat’s revenue boosting options may become more limited, reliant on growing its active user base more rapidly in the U.S. and Europe.