Snap’s Spectacles Sales Fell in Second Quarter — The Motley Fool

Snap (NYSE:SNAP) has only been selling its Spectacles for a couple of full quarters now. The sunglasses with embedded cameras were first released in November 2016 to much fanfare, following a largely successful marketing campaign that built up hype around the product thanks in part to perceived scarcity. Spectacles were initially only available through the company’s own bright yellow vending machines, but Snap has since started selling Spectacles online, including on

Spectacles revenue fell in the second quarter, though, to $5.4 million.

Image source: Spectacles.

Spectacles revenue fell 35% sequentially

I’ve already made the case that Spectacles are totally not worth it for Snap: The company loses money on them and they barely contribute to user engagement. Spectacles were not widely available in Q4 2016, so the performance over the last two quarters should capture the vast majority of this business.


Q1 2017

Q2 2017


$8.3 million

$5.4 million

Implied units*

Approximately 64,300

Approximately 41,900

Other cost of revenue (non-GAAP)

$20 million

$18 million

Data source: Snap conference calls and earnings presentations. *Based on $129 retail price.

Snap breaks down non-GAAP cost of revenue into three main categories, the biggest of which is hosting costs, after excluding stock-based compensation expenses and depreciation and amortization expenses:

Image source: Snap earnings presentation.

That other category is primarily related to Spectacles. Per Snap’s SEC filings: “In addition, cost of revenue includes inventory costs for Spectacles and facilities and other supporting overhead costs, including depreciation and amortization.” Remember, depreciation and amortization are already excluded in the chart above.

On the last call, Snap CEO Evan Spiegel said that Spectacles had created 5 million Snaps to date, which was utterly meaningless at…

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