Priceline's Claude-powered travel bot Penny goes live in Snapchat chat ads
Snap's newest ad format is a rented conversation running on Priceline's bot and Anthropic's models, while subscriptions, not advertising, supplied about three quarters of Snap's growth last quarter. That split is what SNAP holders are actually buying into the holiday quarter.
Vincent Jiangtwo-minute read
Priceline has moved its travel agent into someone else's inbox. On November 10 the Booking Holdings+0.96% — Booking Holdings, up 0.96 percent today-owned booking site became the first travel brand on AI Sponsored Snaps, the format Snap opened in April that lets advertisers run their own chatbots inside Snapchat's−1.78% — Snapchat, down 1.78 percent today Chat tab 128. Open the promoted message and Penny, Priceline's assistant rebuilt in June on Anthropic's$350B — Anthropic, private, latest valuation $350B Claude models, collects destinations, dates and lodging picks, then carries them over to Priceline to finish the booking 1.
The bot in the inbox belongs to the advertiser
Snap owns the Chat tab, where 85% of users engage regularly, and the paid message slot inside it; the intelligence answering belongs to the advertiser 23. Snap's support guidance says these chats run on the advertiser's bot, not Snap's own My AI assistant, and that messages are sent to the advertiser's AI service 3.
Experian, the credit-data group, signed on earlier 3. Snap's chief business officer Ajit Mohan called conversation "the most valuable real estate in advertising" at the launch 2. Two much-quoted numbers need labels: the 22% more conversions and 20% lower cost per action belong to standard Sponsored Snaps, not the AI version, and Priceline's claim that Penny users convert at about twice the rate of others is measured on Priceline's own site 13.
A chat format launched inside a subscription quarter
Third-quarter advertising revenue was $1,372.8 million, up 4.2% year over year, while subscriptions and other revenue rose 84% to $349.7 million; total revenue was $1,722 million, up 14%, with net income of $56.5 million against a year-earlier loss 45. Advertising was 79.7% of revenue, down from 87.4% 4. Sponsored Snaps revenue grew 56% sequentially, and the quarterly filing attributes part of that to advertiser spending shifted away from other Snap surfaces 4.
Subscriptions grew 84% while advertising grew 4.2%
Data
| Value | |
|---|---|
| Subscriptions and other | 84% |
| Total revenue | 14% |
| Advertising | 4.2% |
Advertising has fallen from 96% of Snap's revenue to under 80%
Ads are under 80% of revenue, from 96% in 2023
Data
| Advertising share of revenue | |
|---|---|
| FY2023 | 96% |
| FY2024 | 91% |
| FY2025 | 87% |
| Q3 2026 | 79.7% |
The bull case has a hole
Deutsche Bank's Benjamin Black kept a Buy rating and an $8 target, and the shares rose about 7% on November 11 on his case that investors underrate subscriptions: about 30 million paying users, up 77% 67. His own caveat: at 6.6 times forward earnings, those normalized earnings exclude roughly $1.05 billion a year of stock-based pay 6.
Stock-based pay has beaten net income in all seven quarters charted
- Stock-based compensation
- Net income
Data
| Stock-based compensation | Net income | |
|---|---|---|
| Q1 '25 | $0.25B | -$0.14B |
| Q2 '25 | $0.25B | -$0.26B |
| Q3 '25 | $0.26B | -$0.1B |
| Q4 '25 | $0.26B | $0.05B |
| Q1 '26 | $0.25B | -$0.09B |
| Q2 '26 | $0.26B | -$0.16B |
| Q3 '26 | $0.26B | $0.06B |
Holiday bookings are the first real test
Fourth-quarter guidance of $1.950 to $1.985 billion implies 13.6% to 15.6% growth, and chief executive Evan Spiegel says he is "cautiously optimistic", seeing "a bit of acceleration on the ad side" 4. The tell is whether Priceline's holiday bookings produce the first public proof that a rented conversation sells tickets. Snap owns the inbox; the conversation inside belongs to someone else's AI.
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