Key Takeaways
- Reddit shares soared Friday after the social media company posted earnings that topped analysts’ estimates.
- A jump in users helped power the better-than-expected results.
Reddit (RDDT) shares surged Friday after the social media platform posted better-than-expected earnings and an upbeat outlook.
The stock finished Friday’s session close to 8% higher, pushing its year-to-date gains to about 28%.
Reddit reported third-quarter earnings per share of $0.80, well above the consensus of analysts surveyed by Visible Alpha. Its revenue soared 68% year-over-year to $585 million, also exceeding expectations as a measure of its users jumped.
Why This Is Significant
Heading into the results, there were some worries that AI-powered search features being rolled out by Google could hurt Reddit’s user growth, though the social media platform’s stronger-than-expected results could ease those concerns.
Reddit’s users, measured in daily active uniques, or DAUqs, jumped 19% to 116 million. They were up 31% to 64.4 million internationally, boosted by strength in France, Brazil, and India. U.S. DAUq rose 7% to 51.6 million.
Co-founder and CEO Steve Huffman told analysts on the company’s earnings call that Reddit is “making real progress across the three main focus areas we shared last quarter, core product, search and internationalization,” according to a transcript provided by AlphaSense. Huffman called search one of Reddit’s biggest opportunities, noting that during the period more than 75 million people used Reddit for searching the internet, and that number is growing.
This article has been updated since it was first published to reflect more recent share prices.
