Reddit CEO Steve Huffman hugs mascot Snoo as Reddit begins trading on the New York Stock Exchange on March 21, 2024.
Timothy A. Clary | AFP | Getty Images
Reddit shares jumped more than 10% after the company reported second-quarter earnings on Thursday that beat on sales and guidance.
Here’s how the company did compared with LSEG estimates:
- Earnings per share: 45 cents vs. 19 cents expected
- Revenue: $500 million vs. $426 million expected
Reddit’s sales grew 78% year-over-year in the second quarter and was 17% above consensus estimates, representing the biggest beat in its short history as a public company. Net income came in at $89 million in the second quarter, compared with a net loss of $10 million in the second quarter of last year due to costs associated with its IPO.
The company said third-quarter revenue will be in the range of $535 million to $545 million, ahead of Wall Street estimates of $473 million.
Adjusted EBITDA in the third quarter is projected to be in between $185 million to $195 million, ahead of StreetAccount’s estimates of $160 million.
Reddit said global daily active users for the quarter grew 21% year-over-year to 110.4 million, ahead of analyst estimates of 109 million.
The company said that second-quarter global average revenue per user was $4.53, topping analyst estimates of $3.90.
Reddit’s second-quarter sales in the U.S. were $409 million, ahead of StreetAccount estimates of $335 million. International revenue was $91 million in the quarter, compared with $89 million that StreetAccount projected.
“Other revenue,” which includes Reddit’s data licensing business, jumped 24% year-over-year to $35 million.
The company’s second-quarter global logged-in DAUq rose 17% year over year to 49.3 million, while its global logged-out DAUq jumped 24% to 61.1 million.
Reddit CEO Steve Huffman said in a letter to shareholders that the company’s AI-powered Reddit Answers tool, which debuted in December, now has 6 million weekly users, up from 1 million last quarter. Reddit Answers will expand globally and the company will be “integrating it more deeply into the core search experience, and making search a central feature across Reddit,” Huffman wrote in the letter. Huffman did not specify when exactly Reddit Answers will expand.
“Recently, we celebrated Reddit’s 20th year, and I’ve never been more excited about our business and potential than I am today,” Huffman wrote. “The internet is evolving, and our role as a community-powered platform for human connection is only becoming more critical.”
Huffman said that in order to focus on the “most pressing needs,” Reddit is “deprioritizing a few initiatives,” including its “work on the user economy.” Reddit’s initial 2024 IPO prospectus detailed the company’s efforts to build a user economy business, which could include games and online marketplaces akin to Roblox and Facebook Marketplace.
Google posted strong quarterly earnings results quarterly earnings results last week that beat on the top and the bottom line, similar to Meta’s recent quarterly earnings, which were released Wednesday.
Next week, Snap will report quarterly earnings on Tuesday followed by Pinterest, which will report on Thursday.
