Snap announced the termination of its partnership with Perplexity during its quarterly earnings report, stating that the companies “amicably ended the relationship in Q1.” This deal, initially announced in November, aimed to integrate Perplexity’s AI search engine into Snapchat, with Perplexity set to pay Snap $400 million in cash and equity over one year.
Snap confirmed that its sales guidance now assumes “no contribution from Perplexity.” The initial plan had expected revenue from the partnership to start contributing in 2026. The integration was intended for Snapchat’s “Chat” interface, allowing users to ask questions and receive conversational answers directly within the app.
Although testing was conducted with select users, Snap indicated in February that a path for a broader rollout had not been mutually agreed upon between the companies. Snap CEO Evan Spiegel previously stated the deal reflected the company’s vision to enhance discovery on Snapchat through AI and expressed a desire to collaborate with innovative partners in the future.
Perplexity did not respond to a request for comment regarding the deal termination. In the same report, Snap also mentioned a 5% year-over-year increase in global daily active users (DAU) to 483 million, with monthly active users (MAU) rising 5% to 965 million, attributed to new features like Snap Map and Lenses AR filters.
Spiegel highlighted Snap’s return to growth in daily active users, along with accelerated revenue growth and expanded margins, stating, “In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow.” The company remains focused on disciplined execution, particularly in investing in Specs and its long-term opportunity in intelligent eyewear, with plans to share more at the Augmented World Expo on June 16.
In April, Snap announced it would lay off approximately 16% of its global workforce, affecting around 1,000 full-time employees. The company cited advancements in AI as the reason for the layoffs.
