There was a moment when Snapchat looked like it was destined to be a relic in social media history, losing users and missing its own revenue forecasts.
Not today. Snap, the app’s parent company, announced $1.51 billion in revenue as part of its third-quarter earnings on Wednesday, November 5. That figure was a 10% jump year-over-year (YOY) and beat Wall Street’s prediction of $1.49 billion, according to consensus estimates cited by CNBC.
Snapchat beat Wall Street’s expected global daily active users (477 million versus 476 million) and global average revenue per user ($3.16 versus $3.13). Both figures were also an improvement YOY.
Snap also announced a stock repurchase program for up to $500 million.
Alluding to its reported $93.4 million free cash flow, Snap explained, “The goal of the program is to utilize the company’s strong balance sheet to opportunistically offset a portion of the dilution related to the issuance of restricted stock units to employees as part of the overall compensation program designed to foster an ownership culture.”
Snap partners with Perplexity AI
All of these figures certainly play a part in Snap’s shares (NYSE: SNAP) spiking more than 20% after-hours and into premarket trading on Thursday.
But another announcement likely factored in. Alongside its quarterly earnings report, Snap shared that Perplexity AI will pay it $400 million in cash and equity as part of a coming partnership.
“Starting in early 2026, Perplexity will appear in our chat interface for Snapchatters around the world,” Evan Spiegel, Snap cofounder and CEO, said in an earnings call. “Through this integration, Perplexity’s AI-powered answer Engine will let Snapchatters ask questions and get clear conversational answers drawn from verifiable sources, all within Snapchat.”
Spiegel added that Snap won’t sell advertising against the responses but that Perplexity could help “drive additional subscribers.”
Notably, Spiegel also shared that “Perplexity’s focus on trusted and verifiable sources really aligns with our values and makes them a good fit for our community.”
News organizations such as Dow Jones and the New York Post have sued Perplexity for alleged copyright infringement, while Reddit sued the company last month for allegedly illegally scraping millions of users’ comments for commercial gain.
In a lengthy statement posted to Reddit last month, Perplexity has disputed claims of misconduct.
Last week, the company signed a multi-year licensing deal with Getty Images, allowing the former to display Getty’s content across its AI tools.