Steve Huffman, co-founder and CEO of Reddit, speaks at the WSJ Tech Live conference hosted by the Wall Street Journal at Montage Laguna Beach in Laguna Beach, California on October 21, 2024.
Frederick J. Brown | AFP | Getty Images
reddit reported better-than-expected profits and sales in its first-quarter earnings report on Thursday, and also issued an optimistic outlook. Shares rose 6% in extended trading.
Here’s how LSEG’s estimates compare to the company’s performance.
Earnings per share: $1.01 vs. 58 cents expected Earnings: $663 million vs. $611 million expected
Revenue for the quarter was up 69% from $392 million in the same period last year, Reddit said in an earnings call. Net income jumped to $204 million, or $1.01 per share, from $26 million, or 13 cents per share, a year ago.
Revenue for the second quarter should be in the range of $715 million to $725 million, according to Reddit, higher than analysts’ expectations of $712 million. Adjusted profit is expected to be between $285 million and $295 million, beating the average estimate of $276 million.
The strong performance continues the trend of online advertising. meta and alphabetBoth digital advertising leaders reported higher sales on Wednesday, showing their strongest growth in years. They also revealed plans to increase the amount they spend on artificial intelligence infrastructure.
On Thursday, Alphabet shares rose while Meta shares fell, highlighting investor concerns about parent company Facebook’s large AI investments and lack of a cloud business.
Reddit’s daily active unique users (DAUq) for the quarter rose 17% year-over-year to 126.8 million, beating analysts’ expectations of 125.9 million.
Average revenue per user (ARPU) was $5.23, beating analyst expectations of $4.81. The company’s U.S.-specific ARPU was $9.63, beating Wall Street’s expectations of $8.53.
“Reddit is a unique business powered by deeply engaged communities and real human conversation,” Steve Huffman, CEO of Reddit, said in a statement. “That foundation is driving a rare combination of growth, profitability, and efficiency, giving Reddit a unique advantage in the age of AI.”
What to watch: The market is showing concern about capex plans, especially meta.
