Reddit CEO Steve Huffman stands on the floor of the New York Stock Exchange (NYSE) after ringing a bell on the floor setting the share price at $47 in its initial public offering (IPO) on March 21, 2024 in New York City.
Spencer Platt | Getty Images
Reddit shares jumped 22% in extended trading Tuesday, topping $100 for the first time, after the social media company reported third-quarter results that topped analyst estimates and issued an optimistic forecast for the current period.
Here’s how the company did compared with LSEG estimates:
- Earnings per share: 16 cents vs. a loss of 7 cents expected
- Revenue: $348.4 million vs. $312.8 million expected
Reddit said fourth-quarter revenue will be between $385 million and $400 million, beating the average analyst estimate of $357.9 million. Adjusted earnings for the fourth quarter will be in the range of $110 million to $125 million, higher than the $85.2 million average estimate.
Revenue in the third quarter jumped 68% from a year earlier, and the company turned profitable, reporting net income of $29.9 million, compared with a net loss of $7.4 million during the same quarter a year ago.
The company said that its daily active users grew 47% year over year in the third quarter to 97.2 million, better than analyst estimates of 96.5 million.
Average revenue per user was $3.58 for the third quarter, which beat analyst estimates of $3.24.
“It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability,” Reddit CEO Steve Huffman said in a statement. “Reddit continues to be one of the most visited and trusted sites in the world with opportunities available to us that aren’t available to most companies.”
This is Reddit’s third earnings report since the company went public in March. Based on the after-hours pop, the stock has almost tripled in value since its IPO. At the close, Reddit had a market cap of $13.6 billion.
Since last year, Reddit has benefited from Google search updates that helped push its content higher in results, bringing in a flood of new users to the 19-year-old social media service. However, the newer users, which Reddit refers to as logged-out users, generate less online advertising revenue for the company than logged-in users, who typically spend more time on the platform, Reddit has detailed in financial filings.
Reddit is trying to get logged-out users to sign up to the service and is making it easier for them to do so, Huffman told CNBC in August. He also said that Reddit’s direct traffic is “really resilient” to any Google search changes.
The company said global logged-out users grew 70% from a year earlier to 53.1 million, while global logged-in users increased 27% to 44.1 million.