Snapchat+ Hits 25M Subscribers as Direct Revenue Reaches $1B ARR

Snapchat+ has reached a significant milestone, surpassing 25 million subscribers since its launch in 2022, driving Snap's direct revenue business to a $1 billion annualized revenue run rate, the company announced on Wednesday.

The subscription service, which offers exclusive features like custom app icons, story rewatch counts, and early access to new tools, has become a substantial revenue driver for Snap as the company diversifies beyond advertising.

"Snap's direct revenue business has reached a $1 billion annualized revenue run rate," the company stated, highlighting the growth of its subscription model in an increasingly competitive social media landscape.

The achievement comes as Snap continues to face challenges in its core advertising business, with the company working to reduce its reliance on ad revenue amid broader industry headwinds affecting digital advertising.

Snapchat+ launched in June 2022 as Snap's first direct-to-consumer offering, priced at $3.99 per month or $39.99 annually. The service has steadily added features over time, including the ability to pin a #1 BFF, see who rewatched stories, and access experimental features before they roll out to all users.

Industry analysts view the 25 million subscriber milestone as particularly impressive given the competitive nature of the subscription market and the relatively short time frame since launch. The growth suggests strong user engagement with Snapchat's core demographic of younger users who are willing to pay for enhanced features.

The direct revenue milestone represents a strategic shift for Snap, which has historically relied heavily on advertising revenue. Building a subscription business provides more predictable, recurring revenue and reduces exposure to advertising market fluctuations.

Snap's success with Snapchat+ follows similar moves by other social platforms. Meta has introduced paid verification features, while X (formerly Twitter) has expanded its subscription offerings. However, Snap appears to have found particular traction with its approach of offering feature enhancements rather than basic functionality behind a paywall.

The company has been investing in AI features for Snapchat+, including AI-powered lenses and chatbots, which may be contributing to subscriber growth. These AI enhancements align with broader industry trends as social platforms integrate more artificial intelligence capabilities.

Looking ahead, Snap will likely continue to expand Snapchat+ features and potentially explore additional subscription tiers or products. The $1 billion ARR milestone provides a foundation for further investment in direct-to-consumer offerings as the company seeks to build a more diversified revenue model.

This growth in direct revenue comes as Snap faces ongoing competition from TikTok, Instagram, and other platforms vying for user attention and advertising dollars. The success of Snapchat+ demonstrates the company's ability to innovate beyond its core messaging and Stories products.

For users, the milestone suggests continued investment in new features and improvements to the subscription service. Snap has indicated it will keep adding exclusive features to maintain subscriber growth and engagement.

The 25 million subscriber count represents approximately 12% of Snap's daily active user base, which stood at 414 million in its most recent earnings report. This penetration rate suggests healthy adoption among the platform's core audience.

As social media companies increasingly explore subscription models, Snap's progress with Snapchat+ provides a case study in how to successfully monetize a large user base without alienating the broader community through excessive paywalls.