Full Breakdown
Snap Q1 2026 Earnings: Growth, Guidance, and End of Perplexity Deal
5/7/2026, 4:42:35 AM
Snap’s Q1 2026 Financial and User Results
Snap posted a first-quarter loss of five cents per share, a figure not directly comparable to analyst forecasts. Daily active users rose 5 % YoY, helped by Lenses and Snap Map updates. The firm projected Q2 revenue of $1.52-$1.55 billion, near consensus.
Background and Recent Strategic Shifts
In November 2025 Snap announced a $400 million partnership with generative-AI startup Perplexity, slated to generate revenue in 2026. The deal ended amicably in Q1 and was omitted from the sales outlook. In April, Snap cut 16 % of its workforce and froze hiring for 300 roles while advancing an AI-driven transformation.
Key Executives and Partners
Snap’s co-founder and CEO Evan Spiegel leads the firm. Perplexity, the terminated generative-AI partner, had been slated to provide AI capabilities for Snap’s advertising platform.
Data and Statistics
Snap recorded a five-cent loss per share and a 5 % increase in global DAU. Q2 revenue guidance is $1.52-$1.55 billion. The $400 million Perplexity deal was excluded from the forecast. The April announcement noted a 16 % workforce cut and a hiring freeze for 300 positions.
Official Statements and Company Response
Snap’s investor letter said large North American advertisers continued to constrain growth, yet early signs of improvement were emerging. The firm clarified that Q2 guidance assumes no Perplexity revenue and that the Middle-East operating environment is expected to stay stable, while noting uncertainty about regional geopolitics.
Criticism and Opposition
Analysts pointed to ongoing headwinds from major advertisers as a barrier to revenue growth. The sudden end of the Perplexity partnership raised doubts about Snap’s ability to monetize AI on schedule. Middle-East volatility was also flagged as a risk to ad demand.
Conflicting Reports and Gaps
A technology newsletter reported the Perplexity deal had collapsed, while Snap described the separation as amicable and revenue-free. The earnings release noted a per-share loss but omitted a direct comparison to analyst expectations, leaving the size of the miss unclear.
Verbatim Quotes
- “In Q1, we returned to growth in daily active users, accelerated revenue growth, expanded margins, and generated strong free cash flow,” — Evan Spiegel, Snap CEO.
- “large advertisers in North America remained a headwind to advertising growth” — Snap, Investor Letter.
- “assumes no contribution from Perplexity as we amicably ended the relationship in Q1,” — Snap, Investor Letter.
- “The company said in April that it would lay off about 16% of its workforce and no longer hire for 300 open positions, while pushing further into an” — Snap, Statement.
Outlook and Upcoming Actions
Snap expects Q2 revenue of $1.52-$1.55 billion and will watch the Middle-East environment for changes in ad demand. The firm affirmed ongoing AI investment despite the Perplexity exit and will evaluate further workforce adjustments within its AI-driven transformation.
