Reddit shares climbed more than 9% in after-hours trading on Thursday. The company reported first-quarter results that beat analyst expectations for both earnings and revenue. Its outlook was also higher than expected. This marks the seventh straight quarter that Reddit’s revenue has grown by more than 60%.
Revenue grew 69% year over year to $663 million. This beat the analyst’s estimate of $611 million. Net income jumped to $204 million from $26 million last year. Earnings per share were $1.01, nearly double Wall Street’s forecast of $0.58. For the next quarter, Reddit expects revenue between $715 million and $725 million. Adjusted earnings are expected to be $285 million to $295 million, both above what analysts predicted. These results show that Reddit’s momentum is continuing.
These results are part of a larger trend of strong digital advertising. Meta and Alphabet also reported their fastest revenue growth in years on Wednesday. Reddit’s performance stands out because it operates with a lean business model. The company spent just $1 million on capital expenses this quarter. This is much less than the huge sums big tech companies spend on AI infrastructure. Reddit’s global daily active users grew 17% to 126.8 million, slightly above analyst expectations. Average revenue per user was $5.23, higher than the $4.81 estimate. U.S. revenue per user was $9.63, also beating forecasts. This shows that Reddit is getting better at monetizing its most valuable users.
Reddit’s data licensing business grew 15% from last year, bringing in $39 million in revenue. Its main partners are Google and OpenAI. The CEO said these partnerships generate revenue and are important because they give Reddit access to AI infrastructure and expertise. The CEO also set a long-term goal of reaching 100 million daily U.S. users, but did not give a timeline.
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