Snap (NYSE:SNAP) is restructuring its entire organization into small “startup squads” of 10–15 people after experiencing a stall in ad revenue growth and a decline in key user numbers.
This is designed to restore agility and innovation as the company faces slowing advertising growth and rising competition from platforms like Meta (META) and TikTok (BDNCE).
He detailed that the workforce of around 5,000 will be divided into autonomous, small teams that operate similarly to agile startups rather than a large, hierarchical tech company.
“Our path to reaching one billion monthly active users by 2026 is clear, but it requires us to be honest about where we are today. We reach more than 75% of 13–34 year olds in over 20 countries, including the US, but growth has lagged in North America, with daily active users declining 2% year-over-year to 98 million in Q2. ” wrote CEO Evan Spiegel in a 14-year company letter.
Advertising revenue growth nearly flatlined at 4% in the same quarter. However, Spiegel highlighted Snapchat+ subscriptions’ rapid growth—now generating over $700 million in annual recurring revenue from more than 15 million paying users—pointing to a new strategic emphasis on direct monetization rather than ad-dependency.
The company currently stands at a market cap of ~$12.3 billion and gets a Seeking Alpha quant rating of Hold.
“Its subscription service is firing on all cylinders, Spotlight is improving adoption, and Snap Map is a key differentiator, making the whole product highly sticky with its consumers.” writes SA contributor, giving the stock a strong buy rating.