$SNAP reported its Q3 earnings on November 5th 2025 - reporting a 10% revenue increase year over year. This was fuelled by the 54% year-over-year increase in ‘other revenue’ – particularly the additional ‘Snapchat Plus’ revenue. The company currently averages 477 million daily active users –up 8% increase year-on-year.
Furthermore, on the 5th November, Snap announced a partnership with Perplexity AI for a one year deal where Snap will receive $400 million through a combination of cash and equity. Snap explains how this would work via their website. ‘Starting in early 2026, Perplexity will appear in the popular Chat interface for Snapchatters around the world. Through this integration, Perplexity’s AI-powered answer engine will let Snapchatters ask questions and get clear, conversational answers drawn from verifiable sources, all within Snapchat.’However, the company suspects a potential decline in daily active users in Q4, partially by the ban of social media for under 16s in Australia. Snap told a Senate inquiry last month that it believes there are around 440,000 users which are aged between 13 and 15. According to the Guardian, users in Australia must verify their ages using one of the following methods:
- Verified by ConnectID via an Australian bank account
- Verified by checking a form of government idea like a passport
- Verified via a facial age estimation
In the long run, Australia’s adoption of age-verification laws may set a precedent for other countries to follow. This would undoubtedly be damaging to Snap’s user growth.
On top of this, Snapchat continues to struggle to attract older consumers. Thanks to Pew Research Center’s Americans’ Social Media Use 2025, we can see that Snapchat’s usage within America from an older audience continues to fall behind competitors such as Tiktok, Instagram & Facebook. Although 58% of adults aged 18-30 admit to using Snapchat, Snapchat is only ever used by 25% of US adults. This greatly differs from Youtube where we can see 84% of adults who ever use this.
Alphabet (parent company of Youtube) and Meta (parent company of Facebook & Instagram) have both enjoyed impressive growth to date. With Alphabet stock rising around 60% and Meta up 7%, this shows the contrast between Snapchat. Alphabet’s rally has been driven by the confidence in AI infrastructure and YouTube continuing to provide more advertisement revenue. Meanwhile, Meta’s growth was also helped by the integration of AI on key platforms like Instagram and Facebook. Based on this, the perplexity deal may help Snapchat begin to enjoy some of these AI driven gains.
In the long run, Snap needs to continue broadening its revenue streams if it wants meaningful growth. While advertising remains its core business, the Perplexity partnership could be the catalyst Snap has been missing. By deepening user engagement it should keep people on the app for longer and potentially attracting new users looking for integrated AI tools. If executed well, this could mark an important step toward a more diversified and resilient business model.