New Delhi, India, November 6- Snap has delivered a strong third-quarter performance in 2025, surprising analysts and boosting investor confidence. The company reported $1.51 billion in revenue, beating the expected $1.49 billion. This result reflects Snap’s renewed focus on innovation and strategic partnerships.
Snap also announced a deal worth $400 million with Perplexity AI, a rapidly expanding artificial intelligence startup. The deal is both cash and equity and is supposed to start contributing to revenue starting in 2026. Perplexity's AI-powered search engine will be incorporated into Snapchat, allowing users to receive verified answers right inside the app.
Snap Chief Executive Evan Spiegel said the company will not serve ads against Perplexity's chatbot responses; instead, Perplexity will control the content within Snapchat. That speaks to Snap's commitment to continuing to provide a clean and user-centric experience.
Industry experts view the partnership as a smart move. Max Willens, principal analyst at Emarketer, said Perplexity gains exposure among young users, while Snap strengthens its AI capabilities. This collaboration could help Snap compete with larger platforms like TikTok and Instagram.
Snap’s net loss narrowed to $104 million, down from $153 million a year ago. The improvement highlights better cost control and stronger ad performance. Direct-response ads, which encourage users to take specific actions, rose 8% this quarter. Features like “Pixel Purchase” and “App Purchase” helped drive this growth.
Snapchat’s daily active users (DAUs) increased by 8%, reaching 477 million globally. However, Snap warned that DAUs might decline in the fourth quarter. New regulations and shifting priorities could affect user numbers. One concern is Australia’s Social Media Minimum Age bill, set to take effect in December.
Despite these challenges, Snapchat remains optimistic. The company forecasted fourth-quarter revenue between $1.68 billion and $1.71 billion. Analysts had expected $1.69 billion, placing Snap’s guidance slightly below consensus. Still, the outlook suggests steady momentum.
This marks the turning point with AI integration into Snapchat: very soon, users will get real-time answers without leaving the app. Perhaps this feature could help boost more engagement, retaining users on the platform for a longer period. Snap's call to avoid ads in the chatbot experience means quality over quantity.
With Snap prioritizing user experience, the company hopes to build both loyalty and trust. This is a distinguishing feature in today's crowded market. Investors liked the news: Snap's shares jumped 16% in after-hours trading. The movement of the stock signifies confidence in the direction in wherein the company is headed and its leadership.
Snap's performance this quarter reflects a broader strategy, as the company is striving to invest in AI, fine-tune its ad tools, and grow its user base. The deal for Perplexity is just one step it can take to stay competitive and relevant. Snap leadership believes in innovation and long-term growth.
Looking ahead, Snap faces both opportunities and risks. Regulatory changes, competition, and evolving user habits will shape the road ahead. Yet, proactive steps may show the company is prepared to adapt. The Perplexity partnership is only one representation of how Snap is evolving.
In conclusion, Snap’s third-quarter results and new AI deal show a company on the rise. With strong revenue, growing users, and bold partnerships, Snap is positioning itself for long-term success. The digital landscape is changing, and Snap is moving with it.
