Snap is on a mission to diversify its revenue sources—moving from a business model in which it largely chases ad revenue to one where it can also make money through subscriptions and, eventually, hardware. The company’s latest quarterly earnings report shows that, so far, the firm is having moderate success with that strategy.

In Q4, Snap’s revenue was $1.7 billionwhich is up 10% year-over-year. Its average revenue per user was also up, slightly (to $3.62 from $3.44). The company’s net income was $45 million, up from $9 million the previous year, its earnings report shows.

The company has also continued to generate a significant amount of revenue from Snap+, the paid subscription service that the platform launched back in 2022. The service’s subscribers grew 71% year-over-year, reaching 24 million.

While those numbers might seem to suggest a company whose trajectory is headed in the right direction, the earnings report also shows the platform had slightly fewer daily active users last quarter—dropping from 477 million to 474 million. Those users fell away in North America and Europe, the report shows, while growing slightly throughout the rest of the world.

Reuters also reports that the company expects its revenue during the first quarter of this year to be below analysts’ previous estimates, as competition from Facebook, Instagram, and TikTok cuts into its advertising earnings.

During Wednesday’s earnings call, CEO Evan Spiegel focused on the company’s newer offerings, including its recent effort to charge users for Memories storage—a feature that lets users save and store their Snaps—and its plans to launch Specs later this year. The company has not launched a public-facing version of the augmented-reality glasses since 2019. In anticipation of that event, Snap recently announced the creation of a new subsidiary, Specs Inc., that is focused solely on further developing the glasses.

“Our long-term vision for augmented reality extends beyond the smartphone to a future when computing is more natural, contextual and seamlessly integrated into the real world,” said Spiegel. The CEO added that it was important to develop a “strong standalone brand” for Specs, as he said the hardware product could appeal “to a different audience segment” than the “core Snapchat audience.”

That said, it sounds like the strategy behind Specs may not be entirely ironed out yet. Later in the conversation, Spiegel continued: “We’re so close to launch that the key here is really just, you know, nailing the launch and making sure that we deliver an extraordinary product. And then, you know, I think we have a lot of flexibility to think about how we want to capitalize (on) it moving forward.”