Snap says its $400M deal with Perplexity ‘amicably ended’
Snap has ended its $400 million partnership with Perplexity, which would have integrated the AI search engine into Snapchat. The company said the relationship was amicably concluded in Q1 and that its financial guidance assumes no contribution from the deal.
Snap no longer has a deal with Perplexity, the company revealed as part of its quarterly earnings report. The agreement, announced last November, would have seen Perplexity’s AI search engine integrated directly into Snapchat. Under the terms of the deal, Perplexity was set to pay Snap $400 million in cash and equity over one year.
Snap said the companies “amicably ended the relationship in Q1” and that its sales guidance “assumes no contribution from Perplexity.” When Snap first announced the partnership during its third-quarter earnings last year, it said it expected revenue from the deal to begin contributing to its financials in 2026.
Planned AI Integration
The partnership would have integrated Perplexity into Snapchat’s “Chat” interface, enabling users to ask questions and receive conversational answers directly within the app. Although the integration was being tested with select users, Snap said in February that the companies had “yet to mutually agree on a path to a broader roll out.”
At the time of the initial announcement, Snap CEO Evan Spiegel said the deal reflected the company’s vision to use AI to enhance discovery on Snapchat and that Snap was looking forward to “collaborating with more innovative partners in the future.”
Perplexity did not immediately respond to a request for comment.
Snap’s Latest Earnings
Snap also reported that Snapchat’s global daily active users (DAU) increased 5% year-over-year to 483 million. Monthly active users (MAU) grew 5% to 965 million. The company attributed the growth to new features across the app, including Snap Map and its Lenses augmented reality filters.
“In Q1, 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 disciplined execution as we invest in Specs and our long-term opportunity in intelligent eyewear and look forward to sharing more at AWE on June 16th.”
In April, Snap said it was laying off roughly 16% of its global workforce, affecting around 1,000 full-time employees, citing advancements in AI for the cuts.