reddit Shares rose 14% in after-hours trading Tuesday after the company reported its first quarterly results since its IPO in March.
The company’s initiatives include:
- Loss per share: Loss of $8.19 per share.This may not compare to the $8.71 loss expected by LSEG.
- Revenue: $243 million vs. LSEG expected $212.8 million.
Sales increased 48% from $163.7 million in the same period last year. The company reported ad revenue of $222.7 million in the same period, up 39% year-over-year, which is a faster growth rate than its top competitors.
Digital advertising companies are starting to see healthy growth again after brands hoarded spending to combat inflation in 2022. meta‘s advertising revenue increased 27% in the first quarter; Amazon 13% growth in Google parent alphabet.
Reddit reported a net loss of $575.1 million. Stock-based compensation expense and related taxes of $595.5 million were primarily due to IPO costs.
Reddit expects second-quarter sales of $240 million to $255 million, higher than analysts’ expectations of $224 million, according to LSEG. The midpoint of the guidance range suggests second-quarter growth of approximately 32% from $183 million year-over-year.
Reddit, which hosts millions of online forums on its platform, was founded in 2005 by Alexis Ohanian and company CEO Steve Huffman.
“We believe this is 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 20th. New York Stock Exchange in March. The company’s IPO price was $34 per share, giving it an enterprise value of approximately $6.5 billion. When tech valuations were heating up in 2021, Reddit’s private market valuation hit his $10 billion mark.
The stock peaked above $58 in after-hours trading on Tuesday, but has since rebounded slightly. If the stock closes above $57.75 on Wednesday, it would be its highest since March 26, which would be its fourth day of trading. The stock closed at a record high of $65.11 on the day.
The company reported 82.7 million daily active users in the first quarter, higher than the 76.6 million expected by StreetAccount. Average revenue per user worldwide increased 8% from $2.72 in the same period last year to $2.94.
Reddit will hold its first quarterly conference call with investors at 5pm ET.
clock: Reddit stock rises after earnings