Steve Huffman, co-founder and CEO of Reddit, speaks during the WSJ Tech Live conference hosted by The Wall Street Journal at the Montage Laguna Beach in Laguna Beach, California, on Oct. 21, 2024.
Frederic J. Brown | Afp | Getty Images
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 concerns about 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.”
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