Snap announced on Wednesday that it has ended its deal with Perplexity, as revealed in its quarterly earnings report. The partnership, initially announced last November, aimed to integrate Perplexity’s AI search engine into Snapchat, with Perplexity set to pay Snap $400 million in cash and equity over the span of one year.
Snap stated that the companies “amicably ended the relationship in Q1” and noted that its sales guidance “assumes no contribution from Perplexity.” The initial agreement anticipated revenue contributions from the deal starting in 2026.
The integration was meant to enable users to ask questions and receive conversational answers within Snapchat’s “Chat” interface. However, despite testing with select users, Snap mentioned in February that the parties had “yet to mutually agree on a path to a broader roll-out.”
Snap CEO Evan Spiegel emphasized at the time of the initial announcement that the collaboration reflected the company’s vision of utilizing AI to enhance user discovery within Snapchat. Spiegel remarked about the company looking forward to “collaborating with more innovative partners in the future.” Perplexity did not respond to a request for comment from TechCrunch.
In its earnings report, Snap revealed a 5% year-over-year increase in global daily active users (DAU), reaching 483 million. Monthly active users (MAU) also grew by 5%, totaling 965 million, attributed to new app features like Snap Map and Lenses AR filters.
Spiegel stated in the release, “In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow.” He also mentioned continued investment in Specs and the long-term potential of intelligent eyewear, with additional details expected to be shared at AWE on June 16th.
Additionally, Snap announced in April a layoff of approximately 16% of its global workforce, affecting around 1,000 employees, attributing the decision to advancements in AI technology.
