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Reddit experienced an 11% surge in premarket trading on Wednesday, following the release of its quarterly results, the first since its IPO in March. Here’s a breakdown of Reddit's performance:
- Loss per share: $8.19, compared to the expected $8.71 loss by LSEG.
- Revenue: $243 million, exceeding the $212.8 million expected by LSEG.
Revenue saw an impressive 48% climb from $163.7 million a year earlier. Notably, the company reported $222.7 million in ad revenue for the period, marking a 39% year-over-year increase, outpacing its top competitors.
The resurgence in digital advertising is evident, with companies like Meta, Amazon, and Google's parent company, Alphabet, experiencing healthy revenue growth. Meta's ad revenue jumped 27% in the first quarter, followed by 24% growth at Amazon and 13% growth at Alphabet.
Despite reporting a net loss of $575.1 million, primarily due to stock-based compensation expenses and related taxes linked to its IPO, Reddit remains optimistic about its future.
For the second quarter, Reddit anticipates revenue of $240 million to $255 million, surpassing the $224 million expected by analysts. This guidance suggests a 32% growth for the second quarter, up from $183 million from a year earlier.
Founded in 2005 by Alexis Ohanian and Steve Huffman, Reddit, which hosts millions of online forums, sees its recent performance as the beginning of a new chapter.
“We see this as the beginning of a new chapter as we work towards building the next generation of Reddit,” Huffman said in a release.
Since its IPO, Reddit's shares have been on an upward trajectory, reaching $58 in after-hours trading on Tuesday. The company reported 82.7 million daily active users for the first quarter, surpassing the 76.6 million expected by StreetAccount. Additionally, the average revenue per user worldwide rose 8% to $2.94 from $2.72 a year ago.
With a strong user base and a promising financial outlook, Reddit is well-positioned for continued growth in the coming quarters.
