Snap reached over 30 million paid subscribers across Snapchat+, Memories Storage, and Lens+ in the third quarter, the company announced Wednesday in its earnings release. The milestone represents a five million subscriber increase since February.
But the stock fell 12 percent following the earnings release. Snap missed analyst estimates for both advertising revenue and user growth, with reported daily active users of 495 million falling short of the 499 million analysts projected.
Snapchat+ launched in 2022 at $3.99 per month with exclusive and pre-release features. Lens+ costs $8.99 monthly for exclusive augmented reality experiences, while Snapchat+ Platinum runs $15.99 monthly and removes ads.
The expansion of paid tiers reflects Snap's broader effort to diversify revenue beyond advertising. A year ago, the company limited free storage for Memories and required users to pay $1.99 per month for additional capacity or subscribe to Snapchat+.
Snap CEO Evan Spiegel wrote in an investor letter that AI-powered features in Lens+ drove stronger-than-expected performance. "New creative experiences can drive demand for premium products," Spiegel said.
Paid subscribers remain a small fraction of Snap's total monthly community, Spiegel noted, suggesting room for further growth. The company reported 495 million daily active users for the quarter, up from 493 million in the prior quarter but below expectations.
Snap does not intend to optimize Snapchat around daily use at the expense of long-term community value, the company said in the investor letter. Spiegel affirmed plans to prioritize improving advertiser performance to expand how businesses reach Snap's user base.
