Snap shares rocket 25% on strong forecast, $400 million Perplexity deal

explode Shares rose as much as 25% on Wednesday after the company reported third-quarter earnings and revenue that beat analysts’ expectations and a $500 million stock repurchase program.

Here’s how the company performs compared to Wall Street’s expectations:

• Earnings per share: Loss of 6 cents This figure is not comparable to analysts’ predictions.
• Revenues: $1.51 billion instead of the expected $1.49 billion, according to LSEG
• Global daily active users: 477 million vs 476 million expected, according to StreetAccount
• Global average revenue per user (ARPU): $3.13 instead of the expected $3.16, according to StreetAccount

Snap also announced a partnership with startup Perplexity AI, which will “integrate conversational search directly into Snapchat.” Snap said the feature will appear on Snapchat starting in early 2026.

“Perplexity will pay Snap $400 million within one year through a combination of cash and equity,” Snap said in its letter. “Income from the partnership is expected to begin contributing in 2026.”

explode in question It said its partnership with Perplexity represents “the first step in Snap’s effort to make Snapchat a platform where leading AI companies can connect with its global community in creative and trusted ways.”

The company said Snapchat users will still be able to communicate with the company’s My AI chatbot, but the integrated Perplexity AI service will provide them with “real-time answers from trusted sources and explore new topics within the app.”

“Similar to My AI, Snapchatter messages sent to Perplexity will help improve personalization on Snapchat,” the companies said in a joint announcement. “Together, Snap and Perplexity aim to make conversational AI a more seamless part of how people discover and learn on Snapchat.”

Snap CEO Evan Spiegel said during an earnings call that Perplexity “will have default placement in our chat inbox” and that the startup will “control responses from chatbots within Snapchat.”

While Snap won’t be selling “advertising against Perplexity responses,” Spiegel said the integration “will help Perplexity drive additional subscribers, which is something I think will be valuable to their business.”

“We have a truly unique opportunity to help deploy AI agents through our chat interface,” Spiegel said.

Regarding the company’s expensive venture into developing augmented reality glasses, Spiegel noted that the company is still aiming to launch the next generation of Specs AR glasses in 2026. Spiegel said the company also plans to create a separate subsidiary around Specs AR glasses to help accelerate its development with its partners.

“One of the things we did to create more options in terms of our ability to accelerate was to make Specs its own independent, wholly owned subsidiary, which will give us some options as we think about potential partners that we can work with to accelerate our leadership here in this space as we prepare to go public,” Spiegel said.

Snap said fourth-quarter sales will be between $1.68 billion and $1.71 billion. The midpoint of that figure, $1.695 billion, is slightly above Wall Street expectations of $1.69 billion.

Snap said sales rose 10% year over year in the third quarter and recorded a net loss of $104 million. In the same quarter last year, Snap recorded a net loss of $153 million.

The Snapchat parent company said third-quarter adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, came in at $182 million, above the $125 million StreetAccount had forecast.

The company also said its adjusted EBITDA for the fourth quarter would be between $280 million and $310 million, which would be above StreetAccount’s estimates of $255.4 million.

Snap shares were down 32% for the year as of Wednesday’s close, compared to the Nasdaq’s gain of 22%.

Australia’s social media minimum age law and related policy developments “are likely to have adverse impacts on user engagement metrics that we cannot currently predict,” Snap said in a letter to investors.

“While we remain committed to our goal of serving 1 billion monthly global active users, overall DAU may decline in Q4 given these internal and external factors, and we expect particularly negative impacts in certain jurisdictions as noted above,” Snap said in its letter.

The Australian senate passed the bill in November 2024, and when it comes into force next month companies like Facebook and Instagram MetaTikTok and Snap will be penalized if they do not sufficiently prevent children under 16 from having accounts on their platforms.

Snap also said in its investor letter that “platform-level age verification will be available soon” from companies such as: Apple And Google It may also negatively impact user metrics in the future.

Utah and California have signed online child safety bills that put the onus on app store manufacturers to verify user ages. Utah’s law is scheduled to go into full effect in May 2026.

“We are also preparing for the upcoming rollout of platform-level age verification, which will use new signals provided by Apple and soon Google to help us better determine the age of our users and remove those we learn are under 13,” Snap said in its letter. he said.

Snap’s warning to investors underscores how new laws, policies and regulations around the world are starting to impact tech companies.

In the letter, Snap also said that some of its efforts to improve monetization, such as its Snapchat+ subscription service, could lead to “a negative impact on engagement metrics as these experiences become available globally.”

on Pinterest Shares tumbled Tuesday after the company reported missing third-quarter results on earnings per share and providing weaker-than-expected guidance. Julia Donnelly, the company’s chief financial officer, told analysts Pinterest expects “broader trends and market uncertainty to continue to impact the home furnishings category with the addition of a new tariff in Q4.”

Big tech companies are like this Meta, Alphabet And Amazon They reported their latest quarterly earnings last week, posting solid digital ad sales and big spending on AI-related computing infrastructure.

Facebook’s parent company saw third-quarter sales rise 26% year over year to $51.24 billion, while revenue at Amazon’s online ad unit also rose 24% year over year to $17.7 billion.

Alphabet said total ad revenue in the third quarter rose 13% year over year to $74.18 billion, while YouTube’s online ad sales rose 15% to $10.26 billion.

Reddit said last Thursday that its third-quarter sales rose 68% year over year to $585 million. The company’s global daily active uniques increased 19% year-over-year to 116 million, exceeding estimates of 114 million.

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