- Reddit’s stock surged in after-hours trading following its first quarterly report since going public.
- The social media company reported higher than expected revenue and a smaller than anticipated loss.
- “It was a strong start to the year and a milestone quarter for Reddit and our communities as we debuted as a public company,” said Reddit CEO Steve Huffman.
Reddit’s stock soars after its first earnings report since going public, beating revenue expectations and reporting a smaller than expected loss.
Reddit’s First Earnings Report Post-IPO
Reddit, which went public in March, reported a loss of $8.19 per share on sales of $243 million, beating analysts’ expectations of a loss of $8.75 per share on sales of $214 million. The company attributed the significant per-share loss to expenses related to its public offering. Despite this, sales advanced 48% year over year, and Reddit’s stock rose more than 12% in after-hours trading.
Positive Outlook for Profitability
Despite not having posted a profit in nearly two decades, Reddit gave a positive forecast for its path to profitability. The company projects its adjusted EBITDA to break even or reach up to $15 million in the second quarter, compared to analysts’ previous projection of an $18 million loss. Additionally, Reddit anticipates revenue for the current quarter to be between $240 million and $255 million, surpassing analysts’ previous estimates of $227.5 million. The number of daily active unique users on Reddit also increased by 37% year over year to 82.7 million.
Volatility of Reddit Stock Post-IPO
Like many IPO stocks, Reddit’s stock has been volatile since its debut on the public markets. Shares soared as much as 70% beyond the offering price when Reddit went public on March 22. Since then, they have fluctuated to as high as near 75 and as low as 37.35.
Conclusion
Reddit’s first earnings report since going public has been met with optimism, as the company beat revenue expectations and reported a smaller than expected loss. The company’s positive outlook for profitability and growth in daily active users may indicate a promising future for the social media platform. However, like many newly public companies, Reddit’s stock may continue to experience volatility in the near term.
