Snap Terminates Perplexity Partnership, Reports 5% User Growth and Q1 Layoffs

Snap no longer has a deal with Perplexity, the company revealed on Wednesday as part of its quarterly earnings report. The deal, announced last November, would have seen Perplexity’s AI search engine integrated directly into Snapchat. Perplexity was set to pay Snap $400 million in cash and equity over one year as part of the deal.

Snap said that the companies amicably ended the relationship in Q1 2026. Its sales guidance assumes no contribution from Perplexity. When Snap announced the deal as part of its third-quarter earnings last year, it said it expected revenue from the partnership to begin contributing to its financials in 2026.

The deal would have seen Perplexity integrated into Snapchat’s Chat interface, allowing users to ask questions and receive conversational answers directly within the app. Although the integration was being tested with select users, Snap said in February 2026 that the companies had yet to mutually agree on a path to a broader rollout.

Snap CEO Evan Spiegel said at the time of the initial announcement that the deal reflected the company’s vision to use AI to enhance discovery on Snapchat.

He added that Snap was looking forward to collaborating with more innovative partners in the future. Snapchat’s global daily active users rose 5% year-over-year to 483 million. Monthly active users grew 5% to 965 million.

Snap attributed its user growth to new features across the app, including Snap Map and its Lenses AR filters. “In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow,” Spiegel said in a press release.

Snap said in April 2026 that it was laying off roughly 16% of its global workforce, impacting around 1,000 full-time employees.

The company cited advancements in AI for the cuts. TechCrunch reported that Perplexity did not immediately respond to a request for comment on the termination of the partnership.