Snap confirmed the cuts on Wednesday and will also close more than 300 open roles. The decision follows pressure from Irenic Capital Management, which recently built a 2.5% stake and called for changes to improve performance.

Irenic had urged the company to trim its workforce, review its investments and consider spinning off or shutting down its augmented reality unit, Specs.

Snap said improvements in artificial intelligence are already helping it reduce repetitive work. That shift, it added, means it can operate with fewer staff while keeping output steady.

Chief executive Evan Spiegel told employees the company expects to save more than $500 million a year by the second half of 2026. Those savings will come mainly from lower costs of operations and reduced stock-based compensation.

The company expects to take charges of between $95 million and $130 million linked to the layoffs. Most of that will fall in the second quarter.

Despite the cuts, Snap pointed to steady business performance. It expects first-quarter revenue of about $1.53 billion, up around 12% from a year earlier. Adjusted core profit is projected at $233 million, ahead of market expectations.

The company’s shares rose more than 10% in premarket trading, although the stock is still down about 31% this year.

Attention is also on Specs, Snap’s augmented reality glasses unit. The business has absorbed more than $3.5 billion in investment and continues to burn roughly $500 million a year. Snap plans to launch the product for consumers later this year, even as competition tightens.

Competitors, including Meta Platforms, already have a lead in the smart glasses market, leaving an interesting watch on the unit’s sustainability.

Snap now joins the list of tech companies cutting jobs in 2026, looking for ways to run leaner operations and improve returns.

The post Snap to Cut 1,000 Jobs, Targets $500 Million Savings as AI Reshapes Operations appeared first on Tech | Business | Economy.

At the centre of the case is a 19-year-old woman from California, identified in court papers as K.G.M. She argues that she became hooked on the apps while still a child and that prolonged use damaged her mental health. 

She is asking the court to hold the companies liable for the effects of their product design, not just the content she consumed.

Beyond a single dispute, the trial emphasises whether a digital product can be treated like any other consumer good when it causes harm. That question will now be argued in open court, under oath, and in front of a jury.

Lawyers for the plaintiff say this is the first time technology firms must defend themselves at trial on claims that their platforms injured a young user.

Report Links Growing Mental Health Crisis among Children to Use of Technology

Matthew Bergman, the lead attorney, said: “They will be under a level of scrutiny that does not exist when you testify in front of Congress.”

The jury must decide whether the companies were negligent, and whether use of the platforms played a role in K.G.M.’s mental health challenges, as distinct from other factors in her life or the third-party material she viewed. Legal experts say the result could influence hundreds of similar cases awaiting resolution.

“This is really a test case,” said Clay Calvert, a media lawyer at the American Enterprise Institute. “We’re going to see what happens with these theories”.

Senior executives are expected to be called. Meta chief executive Mark Zuckerberg is due to testify, an uncommon sight for a technology founder in a civil courtroom. 

Snap’s chief executive Evan Spiegel had also been expected, but Snap agreed to settle the case against it earlier this month. The company has not disclosed the terms.

The remaining firms are preparing distinct defences. Meta has said its products did not cause the plaintiff’s difficulties and mental health challenges. YouTube plans to argue that its service is different in nature from platforms such as Instagram and TikTok and should not be treated the same way. TikTok has declined to outline its courtroom strategy.

Since 2022, thousands of lawsuits across the United States have accused social media companies of deliberately designing addictive features that harm children. 

In September 2025, a California court allowed expert witnesses to explain how tools such as endless scrolling, autoplay and algorithm-driven feeds affect young users’ mental health. That ruling cleared the path for this bellwether case.

At the same time, the companies are fighting a parallel issue for public trust. They have rolled out new parental controls, funded school workshops and partnered with youth groups to show they take safety seriously. Meta has sponsored “Screen Smart” sessions in schools. 

TikTok has backed parent programmes under the banner “Create with Kindness”. Google, YouTube’s parent company, has worked with the Girl Scouts on online safety badges.

Individuals say these initiatives muddy the waters. Julie Scelfo, founder of Mothers Against Media Addiction, said: “These companies are using every lever of influence that you can imagine. It can be very confusing for parents who to trust.”

The post US Court Case Targets Meta, TikTok, YouTube Over Youth Mental Health appeared first on Tech | Business | Economy.

This immediately sent the company’s shares up by 16% after trading hours.

Under the one-year deal, paid in cash and equity, Perplexity’s AI-powered “answer engine” will become part of Snapchat’s chat interface, letting users ask questions and receive verified, real-time responses without leaving the app. 

Revenue contributions from the partnership are expected to begin in 2026.

Snap CEO Evan Spiegel confirmed that the new feature will be ad-free. “Perplexity AI will control the responses from their chatbot inside of Snapchat. So, we won’t be selling advertising against the Perplexity responses,” he said.

The collaboration will enable Snap to compete more aggressively with social media giants like TikTok and Meta’s Facebook and Instagram, both of which have long topped the advertising market. 

Analysts see mutual benefits as Perplexity gains exposure among younger audiences, while Snap strengthens user engagement within its platform.

“Perplexity needs a way to build its profile among young consumers, and Snap needs an AI chat partner that will allow its users to stay engaged without leaving its app,” said Max Willens, principal analyst at Emarketer.

Snap’s own AI tool, “My AI,” will be available, but users will now have the option to interact with Perplexity’s chatbot instead. Spiegel described the initiative as part of Snap’s goal to make artificial intelligence “more personal, social, and fun.” He also noted that more third-party AI integrations could follow.

The announcement came alongside Snap’s third-quarter earnings, which showed a 10% year-on-year revenue increase to $1.51 billion, beating analyst expectations of $1.49 billion, according to LSEG data. 

The company’s net loss narrowed to $104 million, down from $153 million a year earlier, while daily active users climbed 8% to 477 million globally.

Snap’s focus on direct-response advertising continued to pay off, with that segment rising 8% during the quarter. Growth was driven by demand for its “Pixel Purchase” and “App Purchase” tools, which help businesses reach users more likely to complete transactions.

Still, the company warned of possible challenges in the coming quarter. Snap expects daily active users could decline slightly due to new regulatory changes, including Australia’s Social Media Minimum Age Bill, which takes effect in December and will tighten access for younger users.

For the final quarter of 2025, Snap projected revenue between $1.68 billion and $1.71 billion, broadly in line with market expectations of $1.69 billion.

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Snap Inc. revealed a turnaround in its latest earnings report, reaching net income of $9 million for Q4 2024, a dramatic reversal from the $248 million loss recorded in the same period last year. 

The company also reported a 528% increase in annual Free Cash Flow, moving from $35 million in 2023 to $219 million in 2024.

Snap’s revenue for Q4 grew 14% year-over-year (YoY) to $1.56 billion, driven by strong advertiser performance and increased user engagement. Full-year revenue climbed 16% to $5.36 billion, with Daily Active Users (DAUs) reaching 453 million, a 9% YoY increase.

The company may also be reaping the benefits of the recent issues surrounding TikTok in the U.S. CEO Evan Spiegel acknowledged this during Snap’s earnings call on Tuesday, noting that while the company isn’t drawing definitive conclusions, the situation has had a noticeable impact.

“We’re not trying to draw too many conclusions from some of the engagement lift we saw when [TikTok] went dark for that brief period of time. I would say that the overall environment of uncertainty is benefiting our business,” Spiegel said.

One of Snapchat’s strongest assets in this space is Spotlight, the company’s short-form video platform that competes directly with TikTok. 

With the situation regarding TikTok’s operations in the U.S., creators have been exploring alternative platforms, and Snap has capitalised on this by expanding its Snap Star program, which saw a 40% YoY increase in the number of creators posting content in Q4.

Snapchat public content ecosystem is also thriving. “I think in Q4 we actually reached a billion public posts a month on Snapchat. So the public content ecosystem is growing in a really nice and healthy way, and so we’re just going to continue our focus there when it comes to our strategy and participation,” Spiegel added.

This shift isn’t just benefiting Snap—other platforms like YouTube, Meta, and even the Chinese-owned RedNote have reportedly seen an increase in engagement as TikTok works to settle the uncertainties.

Financial Rebound and Revenue Diversification

Snapchat’s financial performance showed great improvements across the board. The company’s Adjusted EBITDA for Q4 surged 73% to $276 million, up from $159 million in Q4 2023. Full-year Adjusted EBITDA saw an even more dramatic increase, jumping 215% YoY to $509 million.

Operating cash flow for Q4 rose to $231 million, a 40% YoY increase, while Free Cash Flow surged 65% to $182 million.

“Active advertisers more than doubled in Q4, with the improvements we have made to our advertising platform driving improved advertiser performance and helping to grow revenue 14% year-over-year,” Spiegel stated.

Snap Inc. also credited part of its success to its Snapchat+ subscription model, which saw 131% YoY growth in 2024. The service ended the year with an annualised revenue run rate well over $500 million.

Augmented Reality (AR) engagement also helped in driving user activity. In Q4 alone, over 400 million Snapchatters engaged with new Gen AI Lenses more than 4 billion times, reiterating the company’s increasing focus on AI-powered features.

Advertising & Creator Economy Expansion

Snap’s advertising segment also grew, with Sponsored Snaps and Promoted Places increasing ad reach by 30% on average in the U.S. The company also launched a unified monetisation program for creators, expanding revenue-sharing opportunities through Spotlight and Stories.

Again, Snapchat’s Snap Star program led to a 40% YoY increase in the number of creators posting content, showing the platform’s focus on supporting digital creators.

What’s Next?

With the sharp reduction in losses, improved cash flow, and strong advertiser momentum, Snap Inc. is striving to make 2025 even better. The company will discuss its Q1 2025 outlook in its upcoming earnings call.

The post Snapchat: $9M Profit Marks a Stunning Reversal from $248M Loss | 528% Surge in Free Cash Flow appeared first on Tech | Business | Economy.

This growth, accompanied by a daily active user base climbing to 443 million, results from Snap’s recent emphasis on enhancing user engagement through its advancements in artificial intelligence (AI) and augmented reality (AR).

The CEO, Evan Spiegel, noted the company’s achievements, crediting their investment in cutting-edge technology as key to the platform’s growth.

“Our efforts have not only spurred community engagement but have also solidified our financial trajectory,” Spiegel said, pointing to AI and AR features as key drivers of creative and interactive experiences that resonate with users and advertisers alike.

In addition to its revenue surge, Snap authorised a $500 million stock repurchase programme aimed at offsetting stock dilution and bolstering employee ownership. 

This buyback initiative, which will unfold over the next 12 months, is subject to market conditions and reflects Snap’s robust financial position, with cash reserves and securities totalling $3.2 billion as of September’s end.

Snap’s performance metrics showed improvements across several areas. The company slashed its net loss to $153 million, down from $368 million the previous year, representing a 58% reduction. Adjusted EBITDA jumped to $132 million, an increase from $40 million, while free cash flow shifted from a negative $61 million last year to $72 million. 

Again, operating cash flow increased to $116 million, further pointing to Snap’s strides in operational efficiency.

The company’s subscription service, Snapchat+, also continued to gain traction, amassing over 12 million subscribers by the quarter’s end—a rise since its introduction in 2022. 

This service, designed for users seeking exclusive features, has diversified Snap’s revenue streams and reinforced user loyalty through access to premium content.

Snap’s active user engagement further grew, with time spent on the platform increasing by 25%, and its video-sharing feature, Spotlight, reaching more than 500 million monthly active users—a 21% uptick compared to last year. 

The platform’s ad business has also expanded with the addition of new formats such as Sponsored Snaps and Promoted Places, aiming to connect brands with its youthful audience in innovative ways.

However, the company’s fourth-quarter revenue forecast of $1.51 to $1.56 billion fell slightly short of analyst expectations. Despite this cautious outlook, Snap remains focused on facilitating long-term growth through further development in AI-driven creative tools and AR, as seen with the launch of the latest Spectacles—a limited-release AR wearable designed for developers. 

This product launch places Snap alongside other tech giants vying for leadership in the AR space, signalling its commitment to exploring new dimensions of digital interaction.

While Snap’s stock rebounded, surging over 10% in after-hours trading, the platform faces challenges from competitors with larger user bases and resources, like Meta and TikTok. 

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