06:26 AM EST, 11/06/2025 (MT Newswires) -- Snap (SNAP) shares spiked early Thursday as its third-quarter loss unexpectedly narrowed year over year amid double-digit revenue growth, while the social media company announced a $400 million partnership with Perplexity to bring its artificial intelligence-powered search engine directly into the Snapchat app.

The company reported a net loss of $0.06 a share for the quarter ended Sept. 30, compared with a loss of $0.09 the year before, it said late Wednesday. The consensus on FactSet was for the GAAP loss to increase to $0.12 per share. Revenue improved 10% to $1.51 billion, topping the Street's view for $1.49 billion.

"In (the third quarter), we made meaningful progress on our long-term strategy to grow our global community, deliver stronger performance for advertisers, and invest in the future of augmented reality," Chief Executive Evan Spiegel said during a conference call, according to a FactSet transcript. "This clarity of purpose continues to drive durable growth."

Separately, Snap said it is partnering with Perplexity to integrate its AI-powered answer engine with the chat interface of Snapchat around the world, starting early next year. Perplexity will pay Snap $400 million for one year, through a combination of cash and equity.

The Snapchat parent's stock jumped 18% in the most recent premarket activity.

Advertising revenue grew 5% to $1.32 billion in the third quarter, mainly boosted by an 8% gain in direct response advertising revenue, while other revenue surged 54% to $190 million, Chief Financial Officer Derek Andersen said on the call. Daily active users inclined 8% to 477 million, ahead of the average analyst estimate of 476.1 million. Average revenue per user ticked up to $3.16 from $3.10, ahead of the market's forecast of $3.13.

For the ongoing quarter, the company anticipates revenue to come in between $1.68 billion and $1.71 billion, representing annual growth of 8% to 10%, according to Andersen. The Street is looking for $1.69 billion.

Overall daily active users "may decline" in the fourth quarter due to the impacts of regulation and government policies and restrictions on "access to internet services in certain countries," Spiegel told analysts.

"These policy developments, combined with potential platform-level age verification, are likely to have negative impacts on user engagement metrics that we cannot currently predict," the CEO added.