Snap Inc. (SNAP) shares surged 16.03% in pre-market trading on Thursday, following the company's impressive third-quarter 2025 financial results and strategic announcements that have reinvigorated investor confidence in the social media giant.

The company reported Q3 revenue of $1.51 billion, surpassing analysts' expectations of $1.49 billion. Snap's Daily Active Users (DAUs) reached 477 million, slightly above the forecasted 476.3 million. Notably, the company's Adjusted EBITDA of $182.038 million significantly outperformed estimates of $126.1 million, demonstrating improved profitability despite a net loss of $103.541 million for the quarter.

Adding to the positive sentiment, Snap announced a groundbreaking $400 million partnership with AI startup Perplexity. This collaboration aims to integrate Perplexity's conversational AI search technology into Snapchat by early 2026, positioning Snap at the forefront of AI integration in social media platforms. The company expects revenue contributions from this partnership to begin in 2026. Furthermore, Snap authorized a substantial $500 million stock repurchase program, signaling confidence in its long-term prospects and commitment to enhancing shareholder value.

Looking ahead, Snap provided an optimistic Q4 revenue outlook of $1.68 billion to $1.71 billion, aligning with Wall Street projections. The company's CEO, Evan Spiegel, highlighted the potential of AI to deepen advertiser-user interactions and emphasized the company's unique opportunity to distribute AI agents through its chat interface. These strategic moves, combined with the strong financial results, have contributed to the significant pre-market stock price increase, marking a potential turnaround for Snap, whose shares had previously underperformed the broader tech market year-to-date.