Snap stock jumped over 15% in after-hours trading on November 5th, 2025, after the company beat Q3 earnings expectations and announced a $400 million AI partnership with Perplexity AI. The Snap stock surge came as the social media firm reported revenue of $1.51 billion, exceeding analyst estimates, while daily active users grew 8% year-over-year to 477 million. The company also unveiled a $500 million stock buyback program.
Snap Stock Surges on Perplexity AI Deal
Snap earnings delivered strong results with the Perplexity AI deal marking the first large-scale integration of an external AI partner directly into Snapchat. Starting in early 2026, Perplexity will appear in Snapchat’s Chat interface, letting users ask questions and get conversational answers from verifiable sources. Under the AI partnership, Perplexity will pay Snap $400 million over one year through cash and equity.
Aravind Srinivas, CEO, Perplexity, stated:
“Perplexity’s mission is to support the world’s curiosity. Millions of people connect and discover the world through Snapchat. By bringing Perplexity to Snapchat, we’re able to serve that curiosity directly where it occurs.”
Strong Snap Earnings Beat Expectations
Snap stock momentum built on solid Q3 performance, with advertising revenue reaching $1.32 billion, up 5% year-over-year. The company’s direct response advertising grew 8% year-over-year, driven by strong demand from small and medium-sized businesses. Adjusted EBITDA came in at $182 million, ahead of the $125 million analysts projected.
Evan Spiegel, CEO of Snap, said:
“Our focus on performance, creativity, and simplicity is helping advertisers achieve stronger results while giving our community more ways to communicate. I’m proud of the team’s progress and confident that our discipline and innovation will support durable, long-term growth.”
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Buyback Plans and Growth Strategy
The $500 million stock repurchase program signals confidence in Snap stock’s future prospects. CFO Derek Andersen noted challenges remain, particularly in North America’s large client solutions segment, but expressed optimism about growth opportunities.
Derek Andersen, CFO, had this to say:
“We are excited by the opportunities ahead of us to accelerate top-line growth, further diversify our revenue sources, and make meaningful progress toward profitability.”
Monthly active users reached 943 million, a 7% increase. Revenue from the Perplexity AI partnership is expected to begin contributing in 2026.
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