Reddit exceeded analyst predictions for both revenue and active users in the first quarter of 2024, marking a significant milestone since its IPO in March. The social platform’s shares surged by 14% following the release of its financial results.
Revenue Surpasses Expectations
This quarter’s revenue surged by 48% year-over-year to $243 million, surpassing expectations of $212.8 million. Advertising played a pivotal role, with revenue soaring by 39% to $222.7 million, outpacing competitors like Meta, Amazon, and Alphabet. This robust growth was facilitated by brands reallocating advertising budgets in response to inflationary pressures in 2022. With market conditions improving, companies are once again investing heavily in marketing.
Audience Expansion and Revenue Per User
Alongside impressive financial figures, Reddit also witnessed qualitative growth in its audience, boasting a daily reach of 82.7 million users compared to analysts’ forecasts of 76.6 million. Average revenue per user climbed by 8% to $2.94.
Promising Outlook
The company anticipates even stronger revenue growth in the second quarter, with forecasts ranging from $240-255 million, far exceeding analysts’ expectations of $224 million, adds NIX Solutions. This anticipates a 32% growth compared to the previous year.
Following the earnings release, Reddit’s shares experienced a 14% surge before retracing from their peak. Nonetheless, they continue to trade above their March IPO levels. Stay tuned for further updates on Reddit’s promising trajectory.