“Excess” Spectacles have cost Snapchat’s parent company Snap $39.9 million in the last three months. This news is not a great look for Snap, which reportedly had “hundreds of thousands” of pairs of the Spectacles camera sunglasses piling up in warehouses as of last month. We knew about the inventory; now we’re learning about the cancelled orders for more.
Snap disclosed the nearly $40 million in costs “related to Spectacles inventory” inside its latest earnings report today. Those costs include “excess inventory reserves and inventory purchase commitment cancellation charges.” That is: Money related to storing the sunglasses and cancelled orders for suppliers after that big, initial wave of excitement in 2016. Clearly, Snap is selling fewer Spectacles than it originally anticipated, because hardware is hard.
But $39.9 million is a drop in the bucket for Snap. In total, the company says it lost more than $443 million last quarter. Losses this huge would not look so bad (at least to investors) if the company managed to rake in more ad money than usual last quarter. Sadly, it did not.