Snap Jumps on Perplexity AI Deal and Strong Q3 Results

Snap (SNAP) shares rose as much as 25% in after-hours trading, later settling up 16%, following a Q3 earnings beat and news of a $400 million AI partnership with Perplexity, an emerging conversational AI startup.

Key Financial Highlights

Revenue: $1.51B (+10% YoY) vs. $1.49B expected
Adjusted EBITDA: $182M vs. $124M expected
Global MAUs: 943M (+7% YoY)

Major Announcements

$400M Perplexity Deal:
Snap will integrate Perplexity’s conversational AI search into its products. The payment will be made over one year through a mix of cash and equity, aligned with global rollout milestones.
$500M Stock Buyback:
Snap authorized a $500 million repurchase program, signaling confidence in its long-term growth outlook.

Market Reaction

Investors cheered the dual news, seeing the Perplexity integration as a bold move to enhance Snap’s AI capabilities and user engagement. Shares were up 16% by early Thursday morning (4:45 a.m. ET).

Strategic Context

The partnership underscores Snap’s push into AI-powered experiences, aligning with tech peers expanding into conversational search and generative features.