Reddit CEO Steve Huffman hugs mascot Snoo as Reddit begins trading on the New York Stock Exchange (NYSE) in New York on March 21, 2024.┬а
Timothy A. Clary | AFP | Getty Images
Reddit shares rallied 11% in premarket trading on Wednesday, a day after the company released quarterly results for the first time since its IPO in March.
Here’s how the company did:
- Loss per share: $8.19. That may not compare with the $8.71 loss expected by LSEG
- Revenue: $243 million vs. $212.8 million expected by LSEG
Revenue climbed 48% from $163.7 million a year earlier. The company reported $222.7 million in ad revenue for the period, up 39% year over year, which is a faster rate of growth than at its top competitors.
Digital advertising companies have started growing again at a healthy clip after brands reeled in spending to cope with inflation in 2022. Meta‘s ad revenue jumped 27% in the first quarter, followed by 24% growth at Amazon and 13% growth at Google parent Alphabet.
Reddit reported a net loss of $575.1 million. Stock-based compensation expenses and related taxes were $595.5 million, primarily driven by charges due to the initial public offering.
For the second quarter, Reddit expects revenue of $240 million to $255 million, topping the $224 million expected by analysts, according to LSEG. The midpoint of the guidance range suggests growth of about 32% for the second quarter, up from $183 million from a year earlier.
Reddit, which hosts millions of online forums on its platform, was founded in 2005 by Alexis Ohanian and Steve Huffman, the company’s CEO.┬а
“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 Tuesday.
Reddit began trading under the ticker symbol “RDDT” on the┬аNew York Stock Exchange in March. The company priced its IPO at $34 per share, which valued the company around $6.5 billion. When tech valuations were red hot in 2021, Reddit’s private market valuation reached $10 billion.
The stock climbed past $58 in after-hours trading on Tuesday before coming back a bit. Should shares close above $57.75 on Wednesday, they would be at their highest since March 26, the fourth day of trading. Reddit closed that day at $65.11.
The company reported 82.7 million daily active users for its first quarter, up from the 76.6 million expected by StreetAccount. Average revenue per user worldwide rose 8% to $2.94 from $2.72 a year ago.
