Snap Shares Jump 16% on Q3 Earnings Beat and Perplexity AI Partnership
- ByStartupStory | November 6, 2025
Snap Inc. saw its shares surge by 16% following the release of its third-quarter 2025 earnings that exceeded analyst expectations, combined with the announcement of a significant partnership with AI startup Perplexity AI.
For Q3, Snap reported revenue of $1.507 billion, up 10% year-over-year, driven by strong growth in direct response advertising and Snapchat Plus subscription revenue, which increased 54% year-over-year to $190 million. Daily Active Users rose 8% to 477 million, and Monthly Active Users reached 943 million, reflecting steady engagement on the platform.
Snap posted a net loss of $104 million for the quarter, an improvement from $153 million in the same period last year, while adjusted EBITDA came in at $182 million, beating the expected $125 million.
The company also announced a partnership with Perplexity AI, which will integrate its conversational search capabilities directly into Snapchat, starting early 2026. Perplexity AI will pay Snap $400 million over one year through a mix of cash and equity, with anticipated revenue contribution beginning in 2026. This initiative aims to enhance the app’s AI-enabled search and discovery, making conversational AI more integral to how users engage with content.
Snap’s board authorized up to $500 million in stock buybacks to offset dilution from employee stock issuances, reflecting confidence in its financial position.
CEO Evan Spiegel highlighted continued investments in AI, augmented reality, and personalized content to drive long-term growth, while acknowledging challenges from evolving regulations like new age verification laws expected to impact user metrics.
In summary, Snap’s Q3 2025 earnings beat expectations with strong revenue growth and user engagement gains, buoyed by AI innovation through its Perplexity partnership, fueling investor optimism and a significant stock price rally.
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