Snap co-founder and CEO Evan Spiegel at the Axios Media Trends Live event in New York on September 18, 2025.
Michael Nagle | Bloomberg | Getty Images
snap Shares fell about 4% in after-hours trading after the company reported first-quarter results on Wednesday and offered cautious sales guidance while disclosing that the deal with generative AI startup Perplexity is no longer in place.
Here’s how the company performed compared to Wall Street expectations:
Earnings per share: loss of 5 cents. This number is not comparable to analyst expectations. Revenue: $1.53 billion vs. $1.53 billion expected, according to LSEG Global daily active users: 483 million vs. 475.6 million expected, according to StreetAccount Global average revenue per user or ARPU: $3.17 vs. $3.20 expected, according to StreetAccount
Snap’s first-quarter sales rose 12% year over year, but its net loss was $89 million, down 36% from $139.6 million a year earlier.
In a letter to investors, the company said that in the first quarter, “major advertisers in North America remained a headwind to advertising growth,” and that while it was “not satisfied with the results,” it was “starting to see encouraging signs that this part of the business is improving.”
Global daily active users (DAU) increased 5% year-over-year. The company believes this is due to new product updates related to things like Lens Digital Filters and Snap Map features. In February, the company announced that its global DAUs fell by 3 million quarter-over-quarter due to lower marketing spend and the impact of Australia’s social media minimum age law.
“During the first quarter, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow,” Snap CEO Evan Spiegel said in a statement.
Snap said second-quarter revenue will be in the range of $1.52 billion to $1.55 billion. The midpoint of this range is roughly in line with analyst estimates of $1.54 billion.
In a letter to investors, the company cited a $400 million deal with a generative AI startup announced in November and said its sales outlook “assumes no contribution from Perplexity as we amicably terminated the relationship in the first quarter.” Snap shares rose 15% after the company revealed the partnership with Perplexity as part of its third-quarter earnings, saying at the time that “revenues from the partnership are expected to begin contributing in 2026.”
Tech newsletter Sources first reported that the deal between Snap and Perplexity had fallen apart.
Snap also said in the letter that its second-quarter earnings outlook “assumes a continued stable operating environment in the Middle East relative to the magnitude of the headwinds experienced in March and April.” Still, Snapp cautioned that “the geopolitical situation in the region remains uncertain.”
In April, the company announced it would lay off about 16% of its workforce and stop hiring 300 open positions while furthering its “AI-driven transformation.”
Pinterest’s latest quarterly results on Monday beat sales and bottom lines, but its financial chief Julia Donnelly told analysts that “major retailers continue to be a headwind to growth” as they bear the brunt of President Donald Trump’s tough tariffs.
Reddit released first-quarter results last Thursday, with sales up 69% year-over-year to $663 million, with CEO Steve Huffman telling analysts it was the seventh consecutive quarter of revenue growth of more than 60%.
Meta and Alphabet also reported their most recent quarterly results last Wednesday, with both companies outperforming in terms of revenue. Both online advertising giants have also said they plan to increase spending on AI-related infrastructure this year, but investors reacted more favorably to Alphabet, sending its stock up while Meta fell.
WATCH: Here’s what the AI-focused tech giant has the most to prove after its latest earnings release.
