“It was a strong start to the year and a milestone quarter for Reddit,” CEO and co-founder Steve Huffman after company reported that the company’s daily active unique (DAUq) visitors jumped 37%, to 82.7 million in the first quarter ended March 31, while its average revenue per user increased by 8%.
On Tuesday, May 7, Reddit announced its Quarter 1 results since its market debut in March.
Evidently their revenue earnings report topped the estimates with its shares soaring nearly 13%.
Two months ago, the company’s valuation hit a bumper business valuation of $9 billion seconds after it started trading.
Reddit, home to thousands of communities, endless conversation and authentic human connection has unexpectedly performed better than expected although it suffered a net income loss of nearly $575 million, but this number does not indicate their core operating performance.
It recorded a revenue growth of nearly 50% from the last quarter — earning $243 million in 2024, significantly higher than the previous quarter earning of $163.7 million in 2023.
“We suspected that Reddit would come out strong out of the gates, and Reddit exceeded our bullish expectations,” Bernstein analyst Mark Shmulik said in a client note.
The social media company said it anticipates revenue for the second quarter to be between $240 million to $255 million, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $0 to $15 million, compared to the $10 million it reported in the first quarter.
Given its nascent stage, the company currently does not have the policy of paying dividends to its shareholders.
Google-Reddit deal
In late February, Reddit had struck a deal with Google to share contents with the tech giant to train its artificial intelligence models. The deal has a net worth of about $60 million per year, as Reuters reported.
With the brewing fierce competition between the social media platforms like Meta and TikTok, Reddit has leveled up its game as well — diversifying its revenue sources.
Current Shares Price
Right after the report was released, Reddit’s stock price was up more than 13% at $55.90 in extended trading as of 5 p.m. ET on May 7, an increase of about 64% from its IPO price of $34.
The RDDT Inc. shares on New York Stock Exchange (NYSE) recorded a price of $49.72 per share as of May 9, 20:24 (UTC+5:30). It plunged 3.27% from the previous high, recorded at $55.9 per share.
