Snap has terminated its contract with Perplexity, the company announced Wednesday as part of its quarterly earnings report. The partnership, announced last November, would see Perplexity’s AI search engine integrated directly into Snapchat. As part of the deal, Perplexity would pay Snap $400 million in cash and stock over one year.
Snap said the two companies “amicably ended their relationship in the first quarter” and that its sales guidance “assumes no contribution from perplexity.” When Snap announced the partnership as part of its third-quarter earnings call last year, it said it expected revenue from the partnership to begin contributing to its financials in 2026.
The deal would have integrated Perplexity into Snapchat’s “chat” interface, allowing users to ask questions and receive conversational answers directly within the app. While the integration has been tested with a limited number of users, Snap said in February that the two companies “have not yet reached mutual agreement on a path for broader deployment.”
Snap CEO Evan Spiegel said in the initial announcement that the deal reflects the company’s vision to leverage AI to power discovery on Snapchat, and that Snap looks forward to “working with more innovative partners in the future.”
Perplexity did not immediately respond to TechCrunch’s request for comment.
Snap on Wednesday revealed that Snapchat’s global daily active users (DAU) increased 5% year-over-year to 483 million, and monthly active users (MAU) also increased 5% to 965 million. The company attributes this growth to new features across the app, such as Snap Map and Lens AR filters.
“In the first quarter, we returned to growth in daily active users, accelerated revenue growth, expanded margins and generated strong free cash flow,” Spiegel said in a press release. “We remain focused on specification and disciplined execution as we invest in long-term opportunities in intelligent eyewear, and we look forward to sharing more information at AWE on June 16th.”
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Snap announced in April that it would lay off about 16% of its global workforce, impacting about 1,000 full-time employees, citing advances in AI technology as the reason for the cuts.
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