Snap Ends Its $400M Perplexity ‘Amicably’ Deal

As part of its quarterly earnings report, which was announced by Snap yesterday on Wednesday, it says it no longer has an agreement with Perplexity. The agreement, which was made public in November of last year, 2025, would have allowed Snapchat to directly incorporate Perplexity’s AI search engine into its app. Perplexity’s agreement, which was to give Snap a value of $400 million in cash and shares over the course of a year. 

According to Snap, which states that its sales guidance assumes no contribution from Perplexity and that the two firms “amicably ended the relationship in Q1.” Snap further stated that it anticipated revenue from the relationship to start boosting its finances in 2026 when it revealed the agreement as part of its third-quarter earnings last year.

Through the agreement, the public was made to understand that Perplexity would have been incorporated into Snapchat’s “Chat” feature, enabling users to be able to present queries and get conversational responses through chats, right within the app. In February, Snap stated that the companies had “yet to mutually agree on a path to a broader rollout,” despite the integration being tested with a limited number of customers.

At the time of the first announcement, the CEO of Snap, Evan Spiegel had stated that the collaboration represented the company’s goal of using AI to improve Snapchat discovery and that Snap was excited to “collaborate with more innovative partners in the future.”

A request for comment from the members of the press present was not immediately answered by the Perplexity team.

Yesterday, Snapchat had announced that its monthly active users (MAU) increased by 5% to reach 965 million, while its global daily active users (DAU) also had increased by 5% year over year to 483 million. The app’s new features, such as Snap Map and its Lenses AR filters, had been recognized by the firm with growth. 

In a news release, the CEO Spiegel stated that they had generated strong free cash flow, accelerated revenue growth, expanded margins, and returned to growth in daily active users in Q1. The CEO went further to proclaim that as they invest in Specs and their long-term opportunity in a smart and intelligent eyewear strategy ahead, they remain focused on disciplined execution. They look forward to sharing more at AWE later this year, precisely on June 16th.

Also, in April, Snap said that it was laying off about 16% of its global workforce, which would affect about 1,000 full-time workers. The company attributed the layoffs to advances in artificial intelligence. 

Despite the fallout of the deal, Snap has hence reported a 12% year-over-year revenue increase to $1.53 billion and 483 million daily active users, though its shares fell about 4% in extended trading after CNBC disclosed the failed partnership.