Snap drops after cautious Q2 revenue outlook and Perplexity AI-search deal termination
Snap shares fell as investors digested Q1 results and a cautious Q2 outlook that guided revenue to $1.52B–$1.55B. The stock also faced fresh uncertainty after Snap ended its planned $400M AI-search integration agreement with Perplexity.
1) What’s moving the stock today
Snap is sliding as the market focuses on forward expectations rather than the just-reported quarter. For Q2, Snap projected revenue of $1.52 billion to $1.55 billion, a range that investors viewed as too cautious given recent optimism around digital ads and Snap’s subscription momentum. (investing.com)
2) Earnings backdrop: solid engagement, mixed monetization picture
Snap reported continued growth in its user base, including 956 million global monthly active users and 483 million global daily active users in Q1 (both up 5% year over year). The company’s “Other Revenue” (which includes subscriptions such as Snapchat+) rose 87% year over year to $285 million, highlighting progress diversifying beyond advertising even as advertising remains the largest driver of results. (sec.gov)
3) Additional overhang: Perplexity AI-search partnership ends
Adding to the negative tone, Snap confirmed it ended its planned AI-search integration arrangement with Perplexity, unwinding a partnership that had been framed as a meaningful step in broadening Snap’s revenue streams and product capabilities. The breakup undercut expectations for incremental AI-related monetization and product differentiation that had been associated with the deal. (engadget.com)