Reddit shares experienced a significant boost, surging by 14% in after-hours trading following the release of their quarterly results. Despite reporting a loss per share of $8.19, which was slightly lower than the $8.71 loss projected by LSEG, Reddit’s revenue exceeded expectations. The company reported revenue of $243 million, compared to the anticipated $212.8 million. This marked a substantial 48% increase from the previous year’s revenue of $163.7 million. Notably, ad revenue for Reddit reached $222.7 million during the period, showcasing a remarkable 39% year-over-year growth rate, surpassing that of its competitors in the digital advertising industry.
Looking ahead, Reddit anticipates revenue for the second quarter to be in the range of $240 million to $255 million, surpassing analyst expectations of $224 million. The midpoint of this guidance suggests a growth rate of approximately 32% for the second quarter, a substantial increase from the $183 million reported in the same period a year ago. This optimistic outlook reflects Reddit’s confidence in its ability to sustain growth and profitability in the coming months.
Founded in 2005 by Alexis Ohanian and Steve Huffman, Reddit has become a prominent platform hosting millions of online forums. Huffman, the company’s CEO, expressed his vision for the future, stating, “We see this as the beginning of a new chapter as we work towards building the next generation of Reddit.” The company made its debut on the New York Stock Exchange under the ticker symbol “RDDT” in March, with an IPO price of $34 per share, valuing the company at approximately $6.5 billion. Despite a private market valuation of $10 billion during the peak of tech valuations in 2021, Reddit continues to focus on enhancing its platform and expanding its user base.
In terms of user metrics, Reddit reported 82.7 million daily active users for the first quarter, surpassing the expectation of 76.6 million. Moreover, the average revenue per user worldwide saw a growth of 8%, reaching $2.94 compared to $2.72 from the previous year. These figures indicate a strong user base and increasing engagement on the platform, which bodes well for Reddit’s future revenue prospects.
Reddit’s impressive quarterly results and positive outlook for future growth have instilled confidence in investors, leading to a surge in the company’s shares. With a focus on innovation and user engagement, Reddit is well-positioned to capitalize on the growth opportunities in the digital advertising space and continue its upward trajectory in the market.