TLDR Snap posted Q3 adjusted EPS of 10 cents, doubling Wall Street’s 5-cent estimate, with revenue hitting $1.51 billion Shares rallied 15% after hours on strong results and Q4 guidance that exceeded expectations Perplexity AI will pay $400 million over one year to integrate search features into Snapchat starting in 2026 Company approved $500 million [...] The post Snap Stock Jumps 15% on Earnings Beat and AI Partnership appeared first on Blockonomi.TLDR Snap posted Q3 adjusted EPS of 10 cents, doubling Wall Street’s 5-cent estimate, with revenue hitting $1.51 billion Shares rallied 15% after hours on strong results and Q4 guidance that exceeded expectations Perplexity AI will pay $400 million over one year to integrate search features into Snapchat starting in 2026 Company approved $500 million [...] The post Snap Stock Jumps 15% on Earnings Beat and AI Partnership appeared first on Blockonomi.

Snap Stock Jumps 15% on Earnings Beat and AI Partnership

2025/11/06 18:43

TLDR

  • Snap posted Q3 adjusted EPS of 10 cents, doubling Wall Street’s 5-cent estimate, with revenue hitting $1.51 billion
  • Shares rallied 15% after hours on strong results and Q4 guidance that exceeded expectations
  • Perplexity AI will pay $400 million over one year to integrate search features into Snapchat starting in 2026
  • Company approved $500 million stock buyback and reported 477 million daily active users
  • Snap cautioned that new age verification laws in Australia and other regions may reduce user counts in Q4

Snap delivered a solid earnings surprise Wednesday, sending shares up 15% in extended trading. The Snapchat parent crushed Q3 expectations across the board while unveiling a lucrative AI partnership.

Adjusted earnings-per-share landed at 10 cents, double the 5-cent consensus. Revenue reached $1.51 billion against estimates of $1.49 billion. The company’s own guidance range had set the bar lower.


SNAP Stock Card
Snap Inc., SNAP

Adjusted EBITDA hit $182 million compared to the $125 million forecast. Daily active users came in at 477 million, topping the 476 million projection. Average revenue per user was $3.16 versus $3.13 expected.

Perplexity Partnership Brings AI Search

The company struck a deal with Perplexity AI to embed conversational search directly into Snapchat. The integration rolls out in early 2026.

Perplexity will pay $400 million over one year through cash and equity as the feature launches globally. CEO Evan Spiegel said the AI startup gets default placement in Snap’s chat inbox and controls chatbot responses.

Snap won’t run ads against Perplexity results. Instead, the partnership helps Perplexity grow its subscriber base. Users retain access to Snap’s existing My AI chatbot while gaining real-time answers from Perplexity’s search engine.

The company also greenlit a $500 million buyback program. Spiegel revealed plans for a separate subsidiary focused on Spectacles AR glasses development.

Strong Guidance Offsets User Concerns

Q4 revenue guidance came in between $1.68 billion and $1.71 billion. The $1.695 billion midpoint beats the $1.69 billion consensus. Adjusted EBITDA for the current quarter is projected at $280 million to $310 million, well above the $255.4 million estimate.

Third-quarter sales grew 10% year-over-year. Net loss narrowed to $104 million from $153 million in the prior year period.

The company issued warnings about potential user declines. Australia’s minimum age law for social media takes effect next month, requiring platforms to block users under 16. Other countries are implementing similar restrictions.

Finance chief Derek Andersen pointed to North America as a revenue growth challenge. The company sees stronger demand from small and medium businesses in other markets.

Age Verification Rules Create Uncertainty

Platform-level age verification from Apple and Google presents another hurdle. Utah’s age verification law becomes fully operational in May 2026. California has passed similar legislation.

Snap told investors it expects daily active users may drop in Q4 due to these regulatory changes. The company’s Snapchat+ subscription service could also impact engagement as it expands.

Snap shares had fallen 32% year-to-date through Wednesday’s close. The stock is known for volatile moves following quarterly reports. After initially spiking 25% in after-hours trading, shares settled at a 15% gain.

The company recorded a net loss of $104 million in Q3 compared to $153 million in the year-ago quarter. Global daily active users represent a slight increase from previous quarters despite the regulatory headwinds ahead.

Perplexity’s payment to Snap begins contributing to revenue in 2026 as the global rollout progresses across different markets and user groups.

The post Snap Stock Jumps 15% on Earnings Beat and AI Partnership appeared first on Blockonomi.

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