Snap reported a major surge in revenue last quarter and said it would partner with Perplexity AI, sending shares up as much as 26.7% in after-hours trading.
The Snapchat parent's revenue rose 10% year-over-year to US$1.51 billion, beating LSEG estimates of $1.49 billion. Its loss per share was $0.06, compared with a loss of $0.09 one year ago.
“Our focus on performance, creativity, and simplicity is helping advertisers achieve stronger results while giving our community more ways to communicate,” said Snap CEO Evan Spiegel.
The increase in revenue was “driven by improved advertising demand and the rapid expansion of our direct revenue streams,” the company wrote.
Snap’s operating loss was $103.54 million, rising from a loss of $153.25 million. Its adjusted EBITDA was up 38% to $182.04 million.
Snapchat reached 943 million monthly active users during the quarter, growing by 7% year-over-year. Daily active users increased 8% to 477 million.
The company said daily active users could decline in the fourth quarter, however, due to social media age restriction policies taking effect in countries like Australia.
Its Q4 guidance projects revenue of $1.68-1.71 billion, with adjusted EBITDA of $280-310 million.
Snap also said Perplexity’s artificial intelligence search engine would be integrated into Snapchat from early 2026. Perplexity will pay Snap $400 million in cash and equity over one year as part of the deal.
My AI, Snapchat’s current AI chatbot, will also continue to be available in the app.
Snap’s (NYSE: SNAP) share price rose to a high of $9.25 in after-hours trading following a close at $7.30, before ticking down to $8.55. Its market capitalisation is $12.34 billion.
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