World Stock Watch

Reddit Stock Soars 22% After Impressive Q3 Earnings Report

In a significant boost to its market value, Reddit’s stock price jumped 22% in extended trading on Tuesday, surpassing $100 for the first time. This surge came after the social media company released its third-quarter earnings report, which exceeded analyst estimates and forecast a promising current period.

Key Highlights from Q3 Earnings Report

• Revenue for Q4 is expected to be between $385 million and $400 million, beating the average analyst estimate of $357.9 million.
• Adjusted earnings for Q4 are projected to be in the range of $110 million to $125 million, higher than the $85.2 million average estimate.
• Q3 revenue increased by 68% year-over-year, with the company reporting a net income of $29.9 million, compared to a net loss of $7.4 million during the same quarter last year.
• Daily active users grew 47% year-over-year to 97.2 million, exceeding analyst estimates of 96.5 million.
• Average revenue per user was $3.58 for Q3, beating analyst estimates of $3.24.

CEO Steve Huffman’s Statement

“It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability,” said Reddit CEO Steve Huffman. “Reddit continues to be one of the most visited and trusted sites in the world with opportunities available to us that aren’t available to most companies.”

Market Performance and Growth

This is Reddit’s third earnings report since going public in March. Based on the after-hours pop, the stock has almost tripled in value since its IPO. At the close, Reddit had a market cap of $13.6 billion.

Challenges and Opportunities

Reddit has benefited from Google search updates that helped push its content higher in results, bringing in a flood of new users to the 19-year-old social media service. However, the newer users, which Reddit refers to as logged-out users, generate less online advertising revenue for the company than logged-in users. Reddit is trying to get logged-out users to sign up to the service and is making it easier for them to do so.

User Growth and Engagement

The company reported that global logged-out users grew 70% from a year earlier to 53.1 million, while global logged-in users increased 27% to 44.1 million. These numbers demonstrate Reddit’s continued growth and engagement, as well as its potential for further expansion and monetization.