Reddit Stock Jumps 14% Following Strong Debut Earnings Report
Reddit released its first quarterly earnings report following its March IPO, reporting $243 million in Q1 revenue and 82.7 million daily active users.
Reddit (NYSE: RDDT) shares rallied 14% in after-hours trading today after the company released its quarterly earnings for the first time since its IPO in March.
Here’s how the company did:
- Revenue: $243 million vs. $212.8 million expected by LSEG
- Loss per share: $8.19 loss per share. That may not compare with the $8.71 loss expected by LSEG
Revenue climbed 48% from $163.7 million a year earlier. The company reported $222.7 million in ad revenue for the period, up 39% year over year, which is a faster rate of growth than at its top competitors.
Digital advertising companies have started growing again at a healthy clip after brands reeled in spending to cope with inflation in 2022. Meta’s (NASDAQ: META) ad revenue jumped 27% in the first quarter, followed by 24% growth at Amazon (NASDAQ: AMZN) and 13% growth at Google parent Alphabet (NASDAQ: GOOGL).
Reddit reported a net loss of $575.1 million. Stock-based compensation expenses and related taxes were $595.5 million, primarily driven by IPO charges.
For the second quarter, Reddit expects revenue of $240 million to $255 million, topping the $224 million expected by analysts, according to LSEG. The midpoint of the guidance range suggests growth of about 32% for the second quarter, up from $183 million from a year earlier.
Source: CNBC Television YouTube
Also Read: BofA Issues New Price Target on Reddit Stock Following $750 Million IPO
Reddit, which hosts millions of online forums on its platform, was founded in 2005 by Alexis Ohanian and Steve Huffman, the company’s CEO.
Reddit CEO Steve Huffman commented on the company’s Q1 earnings, stating:
“We see this as the beginning of a new chapter as we work towards building the next generation of Reddit.”
Reddit began trading under the ticker symbol “RDDT” on the New York Stock Exchange in March. The company priced its IPO at $34 per share, which valued the company at around $6.5 billion. When tech valuations were red hot in 2021, Reddit’s private market valuation reached $10 billion.
The stock climbed past $58 in after-hours trading on Tuesday before coming back a bit. Should the stock close above $57.75 on Wednesday, it would be at its highest since March 26, its fourth day of trading. The shares closed that day at $65.11, their highest yet.
The company reported 82.7 million daily active users for its first quarter, up from the 76.6 million expected by StreetAccount. Average revenue per user worldwide rose 8% to $2.94 from $2.72 a year ago.
Reddit will hold its first quarterly call with investors at 5 p.m. EST. Investors can read the company’s full earnings press release here.
Shares of Reddit last traded at $49.40, up +2.34% on the day. In after-hours trading, RDDT stock is up +14.27%.
This article was originally published on CNBC.com.
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