Reddit reported better-than-expected profit and revenue in its first-quarter earnings report on Thursday, and also issued an optimistic forecast. The stock jumped 6% in extended trading.
Here's how the company did compared with LSEG estimates:
Earnings per share: $1.01 vs. 58 cents expected
Revenue: $663 million vs. $611 million expected
Revenue jumped 69% in the quarter from $392 million a year earlier, Reddit said in an earnings release. Net income soared to $204 million, or $1.01 per share, from $26 million, or 13 cents per share, a year ago.
Reddit said second-quarter sales should be in the range of $715 million to $725 million, ahead of analyst estimates of $712 million. Adjusted earnings will be between $285 million and $295 million, topping the $276 million average estimate.
The strong results continue a trend in online advertising. Meta and Alphabet, the leaders in digital ads, both beat on revenue in their earnings reports on Wednesday, showing their fastest growth in years. They also revealed plans to increase the amount of money they're spending on artificial intelligence infrastructure.
Alphabet shares rose Thursday, while Meta shares sank, underscoring investor concernsabout the Facebook-parent's hefty AI spending and its lack of a cloud business.
Reddit's daily active unique users, or DAUq, rose 17% year-over-year to 126.8 million for the quarter, ahead of analyst estimates of 125.9 million.
Average revenue per user, or ARPU, was $5.23, topping analyst estimates of $4.81. The company's U.S.-specific ARPU came in at $9.63, ahead of the $8.53 that Wall Street was projecting.
"Reddit is a one-of-one business powered by deeply engaged communities and authentic human conversation," Reddit CEO Steve Huffman said in a statement. "That foundation is driving a rare combination of growth, profitability, and efficiency, and giving Reddit a unique advantage in the age of AI."
Reddit reports 69% jump in revenue, topping analyst estimates
byu/2plus2_equals_5 instocks
Posted by 2plus2_equals_5
13 Comments
It’s a blow out quarter and feel its fairly valued at 150-160 but I can see it climbing back to 200-220. I reckon I’ll take a small position on this
Unreal
Awesome numbers coming out of RDDT!
Nice
Gross margins around 90% is crazy.
I should have taken Reddit’s IPO offer. Or invested when it IPO.
Something lost in their number is that their ROAS (Return on Advertising Spend) increased considerably. Advertisers haven’t really liked Reddit historically because it was hard to advertise on it and needed a unique way to catch Redditors attention. It seems they’re figuring it out.
Every single ad seller is doing great. They only sell, this shows there are so many buyers outbidding each other. This is not what a recession looks like,
to all the Reddit wEre aLlReAdY iN a rEcEsSiOn doomers, you can fake unemployment but you can’t fake all the small and medium businesses spending money on ads because they get a positive ROI
You are welcome
Up 10-15% tomorrow
I think it’s insane that all of this money is going to someone who relies on thousands of people and bots for content.
Like what the fuck? He’s nothing without the people.
Not surprised looking at the quality of ads in recent month Reddit is getting traction
How? Full add block everything