At First Earnings Report Since IPO, Reddit Stock Soars on Record User Traffic

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During extended trading on Tuesday, shares of Reddit (RDDT) increased by more than 13%. This was in response to the social media company’s announcement that it had received record user traffic and rising revenue in its first quarterly financial report since its initial public offering in March.

The revenues of the firm for the first quarter of 2024 were $243 million, which is a 48% increase over the same period in the previous year. Advertising revenue reached $222.7 million, representing a year-on-year increase of 39%. Both figures were higher than the forecasts that were provided by analysts at Bank of America, which were $212 million and $199 million, respectively.

From a loss of $60.9 million, or 1.05 per share, in the first quarter of 2023, Reddit had a net loss of $575.1 million, which is equivalent to $8.19 per share. This increase was “driven by IPO charges.”

The company also reported that it has achieved record user traffic, with daily active unique users (DAUq) increasing by 37% year on year to 82.7 million, which is higher than the projections made by Raymond James analysts.

“It was a strong start to the year and a milestone quarter for Reddit and our communities as we debuted as a public company,” said Steve Huffman, CEO of Reddit. “We were able to celebrate our first quarter as a public company.” He also said that “we see this as the beginning of a new chapter as we work towards building the next generation of Reddit.”

The social media firm anticipates that its sales for the second quarter will be between $240 million and $255 million, and that its adjusted profits before interest, taxes, depreciation, and amortization (EBITDA) would fall somewhere in the range of $0 to $15 million. This corresponds to an increase from the first quarter’s earnings of $10 million.

The share price of Reddit was around 64% higher than its initial public offering (IPO) price of $34 as of Tuesday at 5 p.m. Eastern Time (ET), which was an increase of more than 13% to $55.90.

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