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Snap is breaking itself apart and rebuilding from within. In a new annual company letter<\/a>, CEO Evan Spiegel just announced the company is restructuring around small \u201cstartup squads\u201d of 10 to 15 people to better compete against larger competitors.<\/p>\n The move comes as the 5,000-person company faces mounting pressure. Advertising revenue growth flatlined at 4% in the second quarter, and North American daily active users declined 2% to 98 million, a troubling sign in Snap\u2019s most important market.<\/p>\n Spiegel does highlight one bright spot: Snapchat+ subscriptions now generate over $700 million in annual recurring revenue from more than 15 million paying subscribers, making direct revenue \u201cone of Snap\u2019s fastest-growing opportunities.\u201d<\/p>\n Snap is also doubling down on Specs, building its own AR glasses that Spiegel envisions will replace smartphones entirely. He calls them a \u201ca once-in-a-generation transformation towards human-centered computing.\u201d (Meta and Google see the same future, partnering with Ray-Ban<\/a> and Warby Parker<\/a>, respectively.)<\/p>\n Spiegel acknowledges the current stock price \u201creflects doubt\u201d but writes that there\u2019s \u201cstartup-style return potential\u201d at Snap\u2019s roughly $12 billion valuation. Left unsaid: that number is down 90% from September 2021, when Snap\u2019s market cap topped $116 billion during the height of social media mania.<\/p>\n<\/div>\n