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On Wednesday, November 6, 2025, Snap shares jumped 25% in after-hours trading as the company announced its $400 million partnership with Perplexity AI and reported better-than-expected third-quarter results. The collaboration demonstrates Snap's commitment to integrating AI into its main platform, which it believes will help restore user growth and advertising momentum.
Under the newly announced partnership, Perplexity AI will pay Snap $400 million over one year through a combination of cash and equity. By early 2026, as part of the collaboration, Perplexity's conversational answer engine will be integrated directly into Snapchat's chat interface.
The integration will allow users to have access to real-time, reliable answers and topic exploration within Snapchat, making the app's function more than just social messaging. Snap said the partnership will begin contributing to its revenue in 2026.
“Perplexity’s chatbot will be placed by default in our chat inbox,” said Evan Spiegel, Snap’s CEO. “This partnership gives us a rare opportunity to integrate powerful AI agents into our platform, helping users learn, connect, and explore seamlessly,” he added.
Snap also confirmed that its own My AI chatbot will remain available, complementing Perplexity’s conversational capabilities.
Snap’s Q3 revenue rose 10% YoY to $1.51 billion, surpassing Wall Street estimates of $1.49 billion, according to LSEG data. The company’s net loss narrowed to $104 million from $153 million in the same period last year, while adjusted EBITDA reached $182 million, beating projections of $124 million.
The advertising business, which accounts for 90% of Snap's revenue, increased 5% YoY to $1.32 billion. This was driven by direct response ads, such as “Pixel Purchase” and “App Purchase” optimizations.
The subscription-based segment of the company also climbed considerably, with “other revenue” increasing 54% YoY to $190 million, supported by 17 million paid Snapchat+ subscribers.
Global daily active users (DAUs) reached 477 million, up 8% slightly above expectations. However, Snap cautioned that DAUs may decline in Q4 due to age-verification rules and changes in regional policy.
Also Read: Perplexity Hits Back at Amazon’s ‘Cease and Desist’ Notice
Snap's projection for the next quarter's revenue is between $1.68 billion and $1.71 billion, slightly above the analysts' estimate of $1.69 billion. The company also anticipates Q4 adjusted EBITDA between $280 million and $310 million, suggesting confidence in operational recovery.
The partnership with Perplexity sparked optimism among investors, despite the stock declining 32% year-to-date. Shares jumped 25% post-market before settling with a 15% gain.
As Snap prepares to integrate Perplexity’s AI into its ecosystem, analysts believe this could mark a pivotal shift in the company’s growth trajectory and an interactive hub for its 477 million users.
