Shares of Snap Inc. (NYSE: SNAP) jumped 9% on Thursday, a day after the corporate launched its third quarter 2025 earnings outcomes. Revenues noticed double-digit progress versus the prior 12 months and got here above expectations. The corporate’s string of losses continued however web loss within the just-reported quarter narrowed versus the year-ago interval. Snap continues to see wholesome person progress and engagement however the largest spotlight of its report was its partnership with Perplexity.
Greater revenues, narrower loss
Snap’s revenues elevated 10% year-over-year to $1.51 billion in Q3 2025, beating estimates of $1.49 billion. Internet loss narrowed to $104 million, or $0.06 per share, from $153 million, or $0.09 per share, within the prior-year interval.
Prime line progress within the quarter was pushed by improved promoting demand and the enlargement of direct income streams. Different Income, which incorporates Snapchat+ subscription income, was up 54% from final 12 months.
Consumer progress and engagement
In Q3, Snap’s international month-to-month lively customers (MAU) elevated 7% YoY to 943 million. Day by day lively customers (DAU) elevated 8% YoY to 477 million. Whereas DAUs dropped by 3% in North America, they rose by 1% in Europe and 15% in Remainder of World.
International time spent watching content material and the variety of content material viewers each noticed will increase within the third quarter versus the earlier 12 months, reflecting the corporate’s investments in machine studying and continued features from Highlight.
Snap is witnessing adjustments in regulation and authorities insurance policies aimed toward making social media platforms safer for customers, particularly these underage. These coverage adjustments may impression engagement metrics negatively. The Snapchat-owner believes these elements may result in a decline in total DAU within the fourth quarter of 2025.
Promoting
Snap’s promoting income grew 5% YoY to $1.32 billion within the third quarter, pushed primarily by an 8% progress in direct response (DR) promoting income. DR advert revenues benefited from continued energy within the small and medium sized enterprise (SMB) shopper section.
The corporate noticed robust double-digit progress in promoting revenues in Europe and Remainder of World versus North America the place advert revenues inched up simply 1% YoY in Q3. In North America, the SMB promoting enterprise grew over 25% whereas the Giant Consumer Options (LCS) enterprise noticed a slight decline. The North America LCS enterprise continues to be a headwind to income progress.
Perplexity AI
Snap introduced that it’s partnering with Perplexity to combine Perplexity’s AI-powered reply engine immediately into Snapchat. Starting in early 2026, Perplexity will seem within the Chat interface for Snapchatters worldwide, offering them with clear solutions to their questions from verifiable sources.
As per the deal, Perplexity pays Snap $400 million over one 12 months, via a mix of money and fairness, as they obtain international rollout. The partnership is predicted to start contributing income in 2026.
Outlook
For the fourth quarter of 2025, income is predicted to vary between $1.68-1.71 billion, representing YoY progress of 8-10%.
