Snap shares rocket 25% on strong forecast, $400 million Perplexity deal (www.cnbc.com)

Snap beat expectations in Q3 and sparked a 25% stock rally after reporting $1.51B revenue (vs. $1.49B expected), 477M daily active users, ARPU of $3.16, and a narrower net loss of $104M. Management unveiled a $500M share buyback and raised guidance (Q4 revenue midpoint $1.695B), with adjusted EBITDA of $182M beating estimates. The headline AI move: Snap struck a commercial partnership with Perplexity AI in which Perplexity will pay Snap $400M over one year (cash plus equity) to integrate conversational search directly into Snapchat; the feature is slated to roll out starting early 2026 and will begin contributing revenue that year. For AI/ML audiences the deal is notable as one of the largest monetized tie-ups between a consumer social platform and an LLM-powered search startup, signaling a viable commercialization path for conversational AI beyond desktop search. Technical and product implications include in-app LLM-driven, conversational search/QA, requirements for real-time inference, privacy/moderation workflows, and integration with Snapchat’s ad and subscription stack. Snap also flagged regulatory risks—platform-level age verification (Apple/Google signals and new laws) and monetization experiments like Snapchat+ may depress engagement—highlighting how compliance and safety will shape deployment strategies for LLM features at scale.