Reddit CEO Steve Huffman stands on the floor of the New York Stock Exchange (NYSE) after ringing a bell on the floor setting the share price at $47 in its initial public offering (IPO) on March 21, 2024 in New York City.
Spencer Platt | Getty Images
Reddit reported first-quarter earnings Thursday that beat Wall Street expectations on sales and guidance.
Shares of the social media company rose as high as 19% in after-hours trading.
Here’s how the company did compared with LSEG estimates:
Earnings per share: 13 cents vs. 2 cents expectedRevenue: $392 million vs. $370 million expected
Reddit said its second-quarter sales should come in the range of $410 million to $430 million, ahead of Wall Street expectations of $396 million. Reddit provided the guidance and touched on the on-going trade dispute between the U.S. and China in a letter to investors, saying it is “well-positioned to meet this moment.”
“Ever-shifting macro environments like these create both challenges and opportunities,” Reddit CEO Steve Huffman wrote. “We’ve grown through challenging times before — people need connection and information just as much in uncertain times.”
Revenue during Reddit’s first quarter rose 61% year over year. Net income, meanwhile, was $26.2 million compared to a year ago when Reddit recorded a net loss of $575.1 million due to costs associated with its March 2024 initial public offering.
The company’s global daily active uniques, or DAUq, jumped 31% year over year to 108.1 million in the first quarter. Analysts were expecting 107.3 million.
Reddit has been a big beneficiary from Google search changes and internal site improvements, which has led to an influx of new and returning users, which it refers to as logged-out users. The social media firm has focused on site updates and features intended to convince logged-out users to create accounts and become logged-in users, which are more valuable to advertisers.
The company’s first-quarter global logged-in DAUq rose 23% year over year to 48.7 million, while its global logged-out DAUq jumped 38% to 59.4 million.
In February, Reddit said that a Google search algorithm change temporarily impacted the company’s user growth during the fourth quarter. Search-driven traffic soon recovered in the first quarter, the company said at the time.
Reddit isn’t the only company to weigh in on macroeconomic challenges.
Meta shares rose Thursday after the company reported first-quarter earnings that beat on the top and bottom. However, the company’s advertising sales in the Asia-Pacific region came in at $8.22 billion for the first quarter, which was lower than analysts estimates of $8.42 billion.
Susan Li, Meta’s finance chief, said that “Asia-based e-commerce exporters” have reduced their digital ad spending likely due to the de minimis trade loophole ending Friday.
Snap reported its latest earnings on Tuesday and said it “experienced headwinds to start the current quarter,” and declined to provide guidance because of macroeconomic uncertainties.
Alphabet reported first-quarter earnings last week, and said that Google Advertising sales jumped 8.5% year over year to $66.89 billion while YouTube ad sales rose 10% to $8.93 billion.
Pinterest reports earnings on May 8.
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