Reddit Stock Soars After Reporting Record User Traffic in First Earnings Report Since IPO

By
Naomi Buchanan
Naomi Buchanan
Full Bio
Naomi Buchanan is a reporter at Investopedia breaking down news stories that impact investors.
Learn about our editorial policies
Published May 07, 2024
The Reddit mascot at the New York Stock Exchange (NYSE) during the company's initial public offering (IPO).

Michael Nagle / Bloomberg / Getty Images

Key Takeaways

  • Reddit shares soared in extended trading Tuesday after the company released its first quarterly earnings report since it began trading in March.
  • The social media company's first-quarter revenue was $243 million, a 48% increase from the year-ago period, while ad revenue increased 39% year-over-year to $222.7 million. Both exceeded Bank of America analysts' expectations.
  • Reddit's net loss of $575.1 million widened from a year ago, "driven by IPO charges."
  • Reddit also reported record user traffic, with daily active unique user numbers growing 37% year-over-year to 82.7 million, topping Raymond James analysts' estimates.

Reddit (RDDT) shares soared over 13% in extended trading Tuesday after the social media company reported record user traffic and rising revenue in its first quarterly earnings report since its initial public offering (IPO) in March.

The company's revenue for the first quarter of 2024 was $243 million, a 48% increase from the year-ago period. Ad revenue increased 39% year-over-year to $222.7 million. Both figures were above Bank of America analysts' expectations of $212 million and $199 million, respectively.

Reddit reported a net loss of $575.1 million or $8.19 per share, widening from a loss of $60.9 million or 1.05 per share in the first quarter of 2023, "driven by IPO charges."

The company also reported record user traffic, with daily active unique users (DAUq) jumping 37% year-over-year to 82.7 million, ahead of Raymond James analysts' expectations.

"It was a strong start to the year and a milestone quarter for Reddit and our communities as we debuted as a public company,” Reddit CEO Steve Huffman said, adding that "we see this as the beginning of a new chapter as we work towards building the next generation of Reddit.”

The social media company said it anticipates revenue for the second quarter to be between $240 million to $255 million, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $0 to $15 million, compared to the $10 million it reported in the first quarter.

Reddit's stock price was up more than 13% at $55.90 in extended trading as of 5 p.m. ET Tuesday, an increase of about 64% from its IPO price of $34.

Do you have a news tip for Investopedia reporters? Please email us at
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. Reddit. "Reddit Announces First Quarter 2024 Results."

  2. Bank of America Securities. "Reddit - 1Q Preview: Positive User and Industry Trends Suggest 1Q Upside."

Take the Next Step to Invest
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.