- Snap stock rose over 15% in after-hours trading on November 5th, 2025, following strong third-quarter earnings and a $400 million AI partnership announcement.
- The company reported $1.51 billion in revenue, surpassing analyst expectations, with daily active users increasing 8% year-over-year to 477 million.
- Snap introduced a $500 million stock buyback program, signaling confidence in future growth prospects.
- The AI partnership with Perplexity AI will integrate conversational AI search into Snapchat’s chat interface starting early 2026.
- Perplexity AI will pay Snap $400 million over one year via cash and equity as part of the deal.
On November 5th, 2025, Snap announced third-quarter results that exceeded expectations, prompting a stock increase of over 15% in after-hours trading. The company reported revenue of $1.51 billion and an 8% year-over-year rise in daily active users to 477 million. Additionally, Snap revealed a $500 million stock repurchase program.
The quarterly revenue included $1.32 billion from advertising, growing 5% year-over-year. Direct response advertising increased 8%, driven by demand from small and medium-sized businesses. Adjusted EBITDA was $182 million, ahead of the $125 million projected by analysts.
In a strategic move, Snap announced a partnership with Perplexity AI valued at $400 million. This deal will bring conversational AI search directly into Snapchat’s chat interface. Starting in early 2026, users will be able to ask questions and receive answers from verified sources within the app. Under the agreement, Perplexity AI will pay Snap $400 million over one year through a combination of cash and equity.
Aravind Srinivas, CEO of Perplexity, explained the integration’s purpose, stating it aims to serve users’ curiosity within Snapchat’s platform.
Snap‘s Chief Financial Officer, Derek Andersen, acknowledged challenges in North America’s large client segment but expressed optimism about expanding revenue sources and moving toward profitability. Monthly active users reached 943 million, marking a 7% increase. The company expects revenue from the new AI partnership to contribute starting in 2026.
Evan Spiegel, CEO of Snap, emphasized the firm’s dedication to enhancing advertising performance and user communication options, highlighting progress toward sustainable growth.
For further details, see the Q3 earnings report and the Snap and Perplexity AI partnership announcement.
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