Reddit Stock Soars on Strong Revenue Growth. Reddit (RDDT) experienced a significant 15% surge in after-hours trading on Tuesday, approaching an opening price of approximately $57 per share for Thursday’s session following the release of its inaugural quarterly earnings report. The social media and chat platform reported impressive financial figures for the March quarter, with revenue reaching $243 million, marking a robust 48% increase compared to the same period last year. This revenue surpassed analysts’ expectations, which had anticipated around $214 million in revenue.
However, alongside the revenue growth, Reddit disclosed a substantial net loss of $575.1 million for the quarter, largely attributable to expenses incurred during its initial public offering (IPO) in March. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) declined to $10 million from $50.2 million in the previous year. Despite these challenges, Reddit saw remarkable expansion in its user base, with weekly active users surging by 40% to 306.2 million and daily active users increasing by 37% to 82.7 million. Reddit Stock Soars on Strong Revenue Growth.
In his press release statement, Reddit’s CEO, Steve Huffman, expressed enthusiasm about the company’s performance, describing the quarter as a “strong start to the year and a milestone quarter for Reddit.” Looking ahead to the current quarter ending in June, Reddit projects revenue between $240 million and $255 million, surpassing Wall Street’s estimate of $227.5 million. This optimistic outlook underscores Reddit’s efforts to achieve profitability, a milestone that has eluded the company throughout its 19-year history.
The surge in Reddit’s stock price reflects investor optimism about the platform’s growth potential and financial trajectory. This enthusiasm aligns with broader market sentiment toward social media companies, which have seen increased investor interest amid evolving digital trends. Notably, Reddit’s earnings report coincides with a broader focus on the monetization of social media platforms, as companies seek to capitalize on their expanding user bases and engagement levels to drive revenue growth and ultimately achieve profitability.
