Snap surpasses revenue forecasts through advertising growth and announces Perplexity AI partnership

Snapchat Integrates Perplexity AI’s Answer Engine

Snap Inc. surpassed third-quarter revenue expectations and has announced a significant partnership with Perplexity AI, enhancing the platform’s AI-powered offerings. The $400 million deal will directly integrate Perplexity’s artificial intelligence answer engine into Snapchat’s chat interface, giving the platform’s nearly one billion monthly active users the ability to “ask questions and get clear, conversational answers drawn from verifiable sources, all within Snapchat”[1][2]. Slated for launch in early 2026, this is the first large-scale integration of an external AI partner on Snapchat. Snap CEO Evan Spiegel expressed that the collaboration “makes AI-powered discovery native to Snapchat, enhances personalization, and positions Snap as a leading distribution channel for intelligent agents, laying the groundwork for a broader ecosystem of AI partners to reach our global community”[1][3].

Snap’s Ongoing AI Expansion

Before this partnership, Snap had already leaned heavily into generative AI technology:
  • Snapchat features its own LLM-powered chatbot, MyAI, which uses models from both OpenAI and Google.
  • AI-driven lenses and creation tools have boosted engagement and the uptake of the Snapchat+ subscription service.
  • The recently launched Imagine Lens allows users to create images through prompt input, while the Lens Studio AI Assistant now helps developers generate and code lenses by describing a concept.

Impressive Earnings and Strong User Growth

In financial results for the quarter ended September 30, Snap reported:
  • Revenue of $1.506 billion (a 10% year-over-year increase), surpassing analyst estimates.
  • An adjusted earnings per share loss of six cents, narrower than the expected 12 cents per share loss and less than last year’s loss of nine cents per share.
  • Global monthly active users reached 943 million, up 60 million (7% year-over-year), with daily active users growing 8% year-over-year to 477 million.
  • Direct response advertising revenue grew 8% year-over-year, and purchase-related advertising surged 30% year-over-year.

The Strategic Importance of AI Integration

Perplexity’s integration is described by Snap as just the first step in creating a platform where leading AI companies and tools can connect creatively and safely with a global audience. Snapchat users will be able to utilize both Perplexity’s answer engine and the existing MyAI chatbot, making Snapchat “a powerful and social entry point for credible, real-time information discovery”[1][2]. Evan Spiegel stated, “Our goal is to make AI more personal, social and fun – woven into the fabric of your friendships, Snaps and conversations. This partnership reflects our shared vision for the power of AI to enhance discovery and connection on Snapchat, and we look forward to collaborating with more innovative partners in the future”[2].

Looking Ahead

Snap anticipates that revenue from the Perplexity deal will start bolstering results in 2026. As Snapchat continues to evolve its suite of AI-powered features and partnerships, it positions itself at the forefront of social and conversational AI integration within messaging platforms.

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