Snap Inc. (NYSE:SNAP) shares fell Thursday after the company reported first-quarter results and disclosed that it had ended its relationship with AI search startup Perplexity AI, as investors focused on a mixed advertising recovery and softer profitability guidance.

Snap said its second-quarter revenue outlook assumes "no contribution from Perplexity" after the partnership ended amicably in the first quarter.

A Wall Street Journal report said Snap's relationship with Perplexity had raised investor expectations for improved profitability.

Advertising Recovery Remains A Concern

Snap reported a first-quarter loss of 5 cents per share, beating estimates for a 7-cent loss, while revenue rose 12% year-over-year to $1.53 billion, slightly above estimates of $1.528 billion.

Snap said ...