Reddit (RDDT.N) announced its potential for turning a profit in the second quarter, buoyed by a thriving advertising sector and content-licensing agreements with AI firms. This revelation delighted investors, propelling shares up by 16% in after-hours trading on Tuesday.
Marking its first earnings report since going public in March, Reddit also issued a revenue projection for the current quarter that surpassed Wall Street’s forecasts. The platform, which gained significant attention during the 2021 meme-stock frenzy, continues to attract more users.
CEO and co-founder Steve Huffman expressed satisfaction with the company’s performance, describing it as a strong start to the year and a pivotal quarter for Reddit. The platform witnessed a notable 37% increase in daily active unique visitors, reaching 82.7 million in the first quarter ending March 31, while its average revenue per user saw an 8% uptick.
These factors contributed to a remarkable 48% revenue surge to $243 million, surpassing Wall Street’s expectations of $212.8 million, according to LSEG data. Additionally, Reddit’s loss of $8.19 per share was narrower than the anticipated loss of $8.71 per share.
