- Snap and Perplexity sign a $400M deal to integrate AI search into Snapchat starting in 2026.
- Conversational responses with verifiable sources within the chat; My AI will remain active and there will be no ads in those responses.
- Strong stock market reaction and results: revenues of $1.510 billion, $477 million DAU, $943 million MAU and adjusted EBITDA of $182 million.
- Global rollout with availability in Spain and Europe; Snap warns of headwinds due to age verification.
Snap has closed a deal with Perplexity AI valued at 400 million to incorporate your conversational search engine into SnapchatThe feature will be integrated into the chat interface and will coexist with My AI, with a planned deployment starting from principles of 2026Following the announcement and the quarterly results, the stock registered double-digit gains in various trading windows.
The company anticipates a global launch, so the novelty It will also arrive in Spain and the rest of EuropeThe agreement will be settled through a combination of cash and stock, and Snap has indicated that it will begin recognizing revenue related to the partnership from 2026 onwards, while It will not insert advertising alongside the answers generated by Perplexity in the app.
What does the agreement between Snap and Perplexity entail?
The agreement states that Perplexity paid $400 million over a one-year periodas the rollout is completed. The figure reinforces Snap's strategy of diversifying revenue streams beyond traditional advertising.
The integration will be done directly in the Snapchat chat so that users can ask questions and receive conversational answers based on information from verifiable sources, without leaving the application.
According to the company, My AI will remain available Alongside the new Perplexity search. In addition, Perplexity will control your chatbot's responses within Snapchat, and Snap will not sell ads against such responses.
Integration timeline and scope
Snap plans to begin integration with principles of 2026The Perplexity service will have a default location in the chat inbox, making it easier quick access to AI search frictionless.
The deployment will be conceived as global, therefore users in Spain and the European Union They will be able to access the new in-app experience when it is activated, in line with Snap's strategy of prioritizing key markets.
Market reaction and financial context
The announcement came alongside results that exceeded revenue forecasts. Snap's stock They rebounded by more than 16%. after publication and they even made progress close to 25% in other windows of negotiation, reflecting the market's interest in the new AI-related business line.
In the third quarter, Snap reported 1.510 million of revenue (above the estimated 1.490 billion), 477 million daily active users y 943 million monthly active usersThe net loss was reduced to 104 million (more than 30% less year-on-year) and the Adjusted EBITDA reached 182 million.
The Board of Directors approved a $500 million share buyback programFor its part, "other income" (which includes Snapchat +) grew 54% year-on-year to 190 million, and the paid subscriber base is around 17 million.
In advertising, the company highlighted the appeal of the SMEs in North Americawhile business with large advertisers proved weaker. direct response campaigns They advanced 8% year-on-year, supported by improvements in performance and purchasing tools.
Among other metrics, Snap reported a operating cash flow of 146 million y 93,4 million of free cash flow, as well as a position of 3.000 billion cash boxFor the fourth quarter, revenue guidance is between 1.680 billion and 1.710 billion, in line with consensus.
Impact on users in Spain and Europe
Once activated, the integration will allow you to perform queries within the chat and obtain conversational answers supported by verifiable sources. The entire process will take place without leaving the app, which could improve information discovery for users in Spain and the EU.
The company has pointed to potential headwinds stemming from new age verification requirements in platforms and local regulations (such as those in Australia), factors that could moderate user growth in the short term as security changes are implemented.
Advertising, subscriptions, and AI roadmap
Evan Spiegel has pointed out that the conversational interface It's gaining traction with AI, and they see opportunities to open Snapchat up to more technology partners. The company is exploring how to connect sponsored ads with conversational agents to enhance brand and user interaction.
Meanwhile, Snap is reinforcing its commitment to augmented realityThe lenses are used more than 8.000 billion times a day, with 350 million daily users interacting with AR, and more than 500 million have tried lenses with generative AI. Furthermore, it is preparing advancements in its smart glasses ecosystem and the Snap OS 2.0 system for upcoming releases.
With the agreement with Perplexity and results showing operational improvements, Snap is making progress toward its goal of diversify income and strengthen experience Within the app: Starting in 2026, integrated conversational search promises a more streamlined and verified user experience, also in Spain and Europe, while advertising and subscriptions consolidate the financial base.
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