snap Shares rose 15% on Wednesday after the company reported third-quarter earnings that beat analysts’ expectations and announced a $500 million stock repurchase program.
Here’s how the company performed compared to Wall Street expectations:
Earnings per share: loss of 6 cents. This number is not comparable to analyst expectations. Revenue: $1.51 billion vs. $1.49 billion expected, according to LSEG Global daily active users: 477 million vs. 476 million expected, according to StreetAccount Global average revenue per user (ARPU): $3.16 vs. $3.13 expected, according to StreetAccount
Snap also announced a partnership with startup Perplexity AI to “integrate conversational search directly into Snapchat.” According to Snap, this feature will be coming to Snapchat starting in early 2026.
“To achieve global expansion, Perplexity plans to pay Snap $400 million in cash and stock over one year,” Snap said in the letter. “Revenues from the partnership are expected to begin contributing in 2026.”
The partnership is “the first step in Snap’s efforts to make Snapchat a platform where leading AI companies can connect with their global communities in creative and authentic ways,” the companies said in a statement.
During the company’s earnings call, Snap CEO Evan Spiegel said Perplexity will “default to your chat inbox” and the company will “control responses from chatbots within Snapchat.”
While Snap does not intend to sell “ads that are counter-responsive to Perplexity,” Spiegel said the integration “will help Perplexity drive additional subscribers, which we think will be valuable to their business.”
“We have a very unique opportunity to help deploy AI agents through a chat interface,” Spiegel said.
Snapchat users will still be able to use the company’s My AI chatbot, but the integrated Perplexity AI service will “provide real-time answers from trusted sources and allow you to explore new topics within the app,” the companies said.
As for Snap’s expensive foray into developing augmented reality glasses, Spiegel said the company plans to form a separate subsidiary around Spex AR glasses to accelerate development with partners.
Snap Inc. said it expects fourth-quarter sales to be between $1.68 billion and $1.71 billion. The midpoint of that number, $1.695 billion, is slightly higher than Wall Street’s expectations of $1.69 billion.
Snap Inc. reported a 10% year-over-year increase in revenue for the third quarter, but a net loss of $104 million. In the same period last year, Snap posted a net loss of $153 million.
Snapchat’s parent company announced third-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $182 million, beating Street accounts’ expectations of $125 million.
The company also announced fourth-quarter adjusted EBITDA of $280 million to $310 million, beating Street estimates of $255.4 million.
As of Wednesday’s close, Snap stock is down 32% since the beginning of the year, while the Nasdaq is up 22%.
The company’s shares soared as much as 25% in after-hours trading on Wednesday, but began to fall after Snap’s finance chief Derek Andersen detailed some of the company’s revenue-related challenges on an earnings call.
“The North American LCS segment remains a major headwind to our overall revenue growth,” Andersen said, adding that the company expects further growth and demand for Snap’s advertising products from small and medium-sized businesses in other regions.
In a letter to investors, Snap said government regulation and related policy developments, such as Australia’s social media minimum age bill, “are likely to have a negative impact on user engagement metrics, which are currently unpredictable.”
“While we remain committed to our goal of serving 1 billion monthly active users worldwide, we expect that overall DAUs may decline in the fourth quarter given these internal and external factors, with a particularly negative impact in certain jurisdictions as discussed above,” Snapp said in the letter.
Australia’s Senate will pass the bill in November 2024, making it the parent company for companies like Facebook and Instagram when it comes into force next month. MetaTikTok and Snap will be subject to penalties if they fail to adequately prevent children under 16 from owning accounts on their respective platforms.
In its letter to investors, Snap also talked about “future developments in platform-level age verification” from companies such as: apple and google It may also have a negative impact on user metrics in the future.
Utah and California have signed into law online child safety bills that will make app store makers responsible for verifying users’ ages. Utah’s law is scheduled to take full effect in May 2026.
“We are also preparing for the upcoming rollout of platform-level age verification, which will use new signals provided by Apple (and soon Google) to more accurately determine a user’s age and help remove users found to be under 13,” Snap said in the letter.
Snap’s warning to investors highlights how new laws, policies and regulations around the world are starting to impact tech companies.
Snap also said in the letter that some of its efforts to improve monetization, such as its Snapchat+ subscription service, could “adversely impact engagement metrics as these experiences are rolled out globally.”
pinterest Shares fell sharply after the company reported third-quarter results on Tuesday that fell short of earnings per share and provided weaker-than-expected guidance. Julia Donnelly, the company’s head of finance, told analysts that Pinterest expects “new tariffs in the fourth quarter and continued broad trends and market uncertainty impacting the home furnishings category.”
Like big tech companies Meta, alphabet and Amazon The company released its latest quarterly results last week, posting strong digital ad sales and heavy spending on AI-related computing infrastructure.
Facebook’s parent company had strong third-quarter sales of $51.24 billion, up 26% year-on-year, while Amazon’s online advertising division’s sales rose 24% year-over-year to $17.7 billion.
Alphabet said total ad revenue in the third quarter rose 13% year over year to $74.18 billion, while YouTube’s online ad revenue rose 15% to $10.26 billion.
Reddit reported last Thursday that third-quarter sales rose 68% year-over-year to $585 million. The company’s daily active uniques worldwide increased 19% year-on-year to 116 million, exceeding the forecast of 114 million.
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