Snap Beats Q4 Estimates but Signals Delay in Perplexity AI Deal

Snap’s fourth-quarter performance showed significant bottom-line improvement, swinging to a profit of 3 cents per share compared to the 3-cent loss analysts had anticipated. Total revenue reached $1.72 billion, surpassing the $1.70 billion forecast. The growth was primarily driven by a 5% increase in advertising sales, which hit $1.48 billion, supported by a monthly active user base that climbed to 946 million.

The Perplexity Integration and Q1 Guidance

Despite the strong year-end results, Snap’s first-quarter revenue guidance of $1.5 billion to $1.53 billion fell short of the $1.55 billion consensus. This conservative outlook excludes potential gains from the Perplexity partnership, as the company has not yet settled on a timeline for a broader rollout. Under the terms of the deal announced in November, Perplexity is slated to pay Snap $400 million over one year—a figure representing approximately 7% of Snap’s total 2024 sales.

Beyond its operational performance, Snap is moving to return capital to investors. The company’s board authorized a $500 million stock buyback program, which will be funded by its existing cash reserves. As of the end of 2025, Snap reported a cash position of $2.9 billion.