Topline
Snap shares rose sharply in premarket trading early on Thursday after the company announced a $400 million deal with AI firm Perplexity and a $500 million stock buyback program, after releasing its third-quarter earnings report, which beat analyst expectations.
Snapchat’s parent Snap announced a $400 million deal with AI startup Perplexity on Wednesday.
Copyright 2023 The Associated Press. All rights reserved
Key Facts
Snap’s share price climbed to $8.49 in early trading on Thursday, up more than 16.4% from Wednesday’s close.
Alongside its earnings report, the social media company announced that artificial intelligence startup Perplexity will integrate its AI-powered search engine directly into the Snapchat app.
Starting early next year, the AI search tool will appear in Snapchat’s chat interface and it will let the social media app’s users “ask questions and get…conversational answers…from verifiable sources,” the company said.
As part of the deal, Perplexity will pay Snap $400 million over the next year through a “combination of cash and equity.”
During the company’s earnings call, Snap CEO Evan Spiegel said Perplexity will “control the responses from their chatbot inside of Snapchat,” and the social media company will not be selling “advertising against the Perplexity responses.”
What Do We Know About Snapchat’s Existing Ai Integration?
The integration of Perplexity’s search tool into Snapchat comes nearly two years after the platform integrated its “My AI” chatbot into the social media app. At launch, My AI was powered by OpenAI’s GPT models but last year, the chatbot also integrated Google’s Gemini AI models. In Wednesday’s announcement, Snap said My AI will continue to be offered alongside Perplexity’s AI search tool. In the earnings call, Spiegel said Perplexity will receive “default placement in our chat inbox,” and he expects the deal will help the AI startup gain additional subscribers.
What Do We Know About Snap’s Earnings?
In its earnings report on Wednesday, the company announced Q3 2025 revenue of nearly $1.51 billion, up 10% from last year—beating analyst estimates of around $1.49 billion. The company reported its daily active user base had risen to 477 million, up 8% year-over-year, while monthly users had grown 7% to 943 million. The company also said it’s the time users’ “time spent watching content” and “number of content viewers” also increased year-over-year, without providing specific numbers. As a result of strong earnings, Snapchat announced that its board had approved a plan to repurchase $500 million of its stock.