Snap Inc. Reports Growth, Partners with Startup Amid Market Challenges

Sun Valley, Idaho — Snap Inc., the parent company of Snapchat, reported its third-quarter earnings on Wednesday, revealing a revenue that surpassed analysts’ expectations. The company’s shares rose as much as 25% following the announcement.

For the third quarter, Snap reported a 10% increase in sales year over year, amounting to $1.68 billion. However, it experienced a net loss of $104 million, though this was an improvement from a loss of $153 million a year earlier. Snap’s adjusted EBITDA for the quarter was $182 million, significantly above the $125 million projected by StreetAccount.

Looking ahead, Snap forecasted fourth-quarter sales between $1.68 billion and $1.71 billion, with a midpoint of $1.695 billion slightly ahead of Wall Street’s expectation of $1.69 billion.

In addition to its earnings report, Snap announced a significant partnership with a startup called Perplexity. This partnership will integrate Perplexity’s conversational search feature directly into Snapchat, set to launch in early 2026. Snap expects to receive $400 million from Perplexity over the next year as part of this collaboration, starting in 2026.

Despite the financial upside, Snap warned investors about various challenges ahead. In its letter, Snap acknowledged that new government regulations could negatively impact user engagement metrics. A recent Australian bill, set to take effect next month, will impose penalties on platforms if they fail to prevent children under 16 from creating accounts.

Moreover, the company noted that upcoming platform-level age verification measures being implemented by firms like Apple and Google could also affect their user metrics.

The warning illustrates how evolving laws and regulations worldwide are starting to influence tech companies, including Snap.

In contrast, stocks of other tech giants faced challenges this week. Pinterest reported disappointing third-quarter results, causing its shares to plunge, while competitors like Facebook and Amazon reported strong earnings in their recent announcements.