Snapchat-parent Snap Inc reported a revenue of $1.51 billion, up 10% year-over-year, beating analysts’ average estimate of $1.49 billion, reports Reuters. Alongside, the company also announced a partnership with artificial intelligence startup Perplexity AI to integrate its AI-powered search engine into the Snapchat app. The news pushed Snap’s shares up 16% in after-hours trading.
As part of the partnership, Perplexity AI will pay Snap $400 million over one year in a mix of cash and equity, with the revenue contribution expected to begin in 2026. According to the company, the collaboration will allow Snapchat users to get verifiable answers to questions within the app.
"Perplexity will control the responses from their chatbot inside of Snapchat. So, we won't be selling advertising against the Perplexity responses," said Snap CEO Evan Spiegel.
The report quotes industry experts who said the partnership could help both companies expand their reach.
“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.
The partnership is expected to help Snap compete more effectively with larger social media rivals such as TikTok and Meta-owned Facebook and Instagram, which continue to dominate the digital advertising space.
For the third quarter, Snap reported revenue of $1.51 billion, up 10% year-over-year, beating analysts’ average estimate 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.
Snap said daily active users (DAUs) rose 8% to 477 million globally. However, the company cautioned that user growth may slow in the fourth quarter due to shifting investment priorities, new age verification measures, and regulatory changes, including Australia’s upcoming Social Media Minimum Age bill set to take effect in December.
Snap also highlighted an 8% increase in direct-response ad revenue, driven by strong demand for tools like “Pixel Purchase” and “App Purchase,” which help advertisers reach users more likely to complete purchases online or in apps.
As part of the partnership, Perplexity AI will pay Snap $400 million over one year in a mix of cash and equity, with the revenue contribution expected to begin in 2026. According to the company, the collaboration will allow Snapchat users to get verifiable answers to questions within the app.
"Perplexity will control the responses from their chatbot inside of Snapchat. So, we won't be selling advertising against the Perplexity responses," said Snap CEO Evan Spiegel.
The report quotes industry experts who said the partnership could help both companies expand their reach.
“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.
The partnership is expected to help Snap compete more effectively with larger social media rivals such as TikTok and Meta-owned Facebook and Instagram, which continue to dominate the digital advertising space.
For the third quarter, Snap reported revenue of $1.51 billion, up 10% year-over-year, beating analysts’ average estimate 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.
Snap said daily active users (DAUs) rose 8% to 477 million globally. However, the company cautioned that user growth may slow in the fourth quarter due to shifting investment priorities, new age verification measures, and regulatory changes, including Australia’s upcoming Social Media Minimum Age bill set to take effect in December.
Snap also highlighted an 8% increase in direct-response ad revenue, driven by strong demand for tools like “Pixel Purchase” and “App Purchase,” which help advertisers reach users more likely to complete purchases online or in apps.
You may also like
Prince William pays tribute to Princess Diana: Recreates mum's iconic Rio photo
Fourth issue of new monthly Liverpool FC fix on sale now
Women's Sleep Needs: Do women really need more sleep than men? What do experts say?
'Act responsibly, hold talks with sugarcane farmers': Pralhad Joshi tells K'taka govt
Get better internet immediately by pressing one button on phone when travelling
