Snap Inc., the parent company of Snapchat, is making headlines again—this time for a mix of financial surprises, bold AI partnerships, and a stock price that just can’t seem to catch a break. Despite beating Wall Street’s expectations in its latest earnings report, Snap’s shares are still hovering near their lowest point of the year, leaving investors and tech watchers asking: What’s really going on behind the scenes?
Snap’s Q3 2025: Revenue Up, Losses Down, But Stock Dips
Snap reported its third quarter 2025 results on November 5, and the numbers were, on the surface, impressive.
Revenue jumped 10% year-over-year to $1.51 billion, and the company managed to narrow its net loss to
$104 million—a
32% improvement compared to last year. Adjusted EBITDA hit
$182 million, with a healthy
12% margin. The company’s cash position remains strong, boasting
$3 billion in reserves.
Yet, in a twist that’s become all too familiar for Snap, the stock price didn’t celebrate. Instead,
shares fell by 2.28% in after-hours trading, closing at $7.30—just above its 52-week low of
$6.90. This drop came despite Snap beating both earnings and revenue forecasts, with EPS at -
$0.06 (versus the expected -
$0.12) and revenue slightly above analyst estimates.
Why the Disconnect? Investor Caution and User Growth Concerns
So why the negative reaction? The answer seems to lie in
investor skepticism about Snap’s long-term growth. While the company is making strides in monetization and augmented reality (AR), it faces stiff competition from rivals like TikTok and Instagram. Snap’s own guidance hinted at a possible decline in daily active users for Q4, citing regulatory and internal factors. For a social media company, user growth is the lifeblood—and any hint of stagnation can spook the market.
Betting Big on AI: The Perplexity Partnership
Snap isn’t standing still. In a headline-grabbing move, the company announced a major partnership with Perplexity, an AI search startup, to bring
conversational AI search to Snapchat’s platform. The deal, reportedly worth
$400 million, sent Snap’s stock soaring more than
17% in after-hours trading when it was first announced, though shares have since given back those gains.
CEO Evan Spiegel is bullish on the future, stating,
“We believe Snap is uniquely positioned to win the next wave of AR computing.” The company is doubling down on AI and AR, hoping these technologies will drive the next phase of growth and help Snap stand out in a crowded digital landscape.
What’s Next for Snap?
Looking ahead, Snap is projecting Q4 revenue between
$1.68 and
$1.71 billion—an 8-10% increase. The company is focusing on
monetization efficiency, AR innovation, and diversifying revenue streams. But with shares down more than
35% this year and investor confidence shaky, Snap has a lot to prove.
Key Takeaways for Investors and Users
-
Snap’s financials are improving, but user growth remains a concern.-
The company is betting big on AI and AR to fuel future growth.-
Stock volatility is likely to continue as Snap navigates a challenging social media landscape.For now, Snap’s story is one of bold bets and cautious optimism. Whether those bets pay off—or if Snap becomes another cautionary tale in tech—remains to be seen.
Sources
1. News - Snap Inc. - Investor Relations
2. Snap Inc. Class A Common Stock (SNAP) - Nasdaq
3. Snap Inc. - Investor Relations
4. Snap Q3 2025 slides: Revenue jumps 10% as losses narrow, AR ...
5. Earnings call transcript: Snap Inc. Q3 2025 beats ... - Investing.com
6. What the $400 million Snap-Perplexity deal means for users
7. SNAP Stock Quote | Price Chart | Volume Chart Snap Class A
8. Snap and Perplexity Partner to Bring Conversational AI Search to ...
