Snap Q1 2026: Beat Earnings But Stock Fell 8% — Here's Why the Perplexity Deal Collapse Matters

# Snap Q1 2026: Beat Earnings But Stock Fell 8% — Here's Why the Perplexity Deal Collapse Matters

> **Quick answer:** Snap's Q1 2026 numbers were genuinely strong — $1.53B in revenue (up 12% YoY), 483 million daily active users, and $233M in adjusted EBITDA. The stock still fell ~8% after hours. Two things spooked the market: soft Q2 guidance ($1.52-$1.55B) that left analysts with nothing to get excited about, and the quiet disclosure that Snap's $400 million AI partnership with Perplexity had been terminated. CEO Evan Spiegel is pivoting Snap's AI ambitions toward smart glasses — and that bet is far from certain.

Snap Q1 2026 earnings looked like a win on paper. The company beat expectations on users and revenue, narrowed its net loss, and generated strong free cash flow. Then the stock dropped 8%. If you're confused, you're not alone — but the explanation reveals something important about how Snap is repositioning itself in the AI race, and whether that bet will pay off.

## What Snap Actually Reported for Q1 2026

The headline numbers from Snap's May 6, 2026 earnings release were broadly positive:

- **Revenue:** $1.529 billion, up 12% year-over-year and in line with expectations - **Daily active users (DAU):** 483 million, up 5% YoY — a return to DAU growth the company had been working toward - **Monthly active users (MAU):** 956 million globally, up 43 million (5% YoY) - **Net loss:** $89 million, improved from $140 million in Q1 2025 - **Adjusted EBITDA:** $233 million, versus $108 million in the prior year — a 116% improvement - **Free cash flow:** $286 million, up from $114 million a year ago - **Average revenue per user:** $3.17, up from $2.96