Reddit shares soar 14% after company reports revenue pop in debut earnings report

Reddit
shares
rallied
14%
in
extended
trading
on
Tuesday
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. 

“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 New
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.