Reddit (NYSE:RDDT) shares surged more than 17% afterhours as its first quarterly earnings report as a public company impressed investors, as did its upbeat guidance for the second quarter.
For Q2, the social media platform guided adjusted EBITDA between break-even and $15 million, better than the $18.2 million loss expected by analysts.
Revenue is seen in the range of $240 million and $255 million, ahead of estimates of $223.8 million.
For Q1, Reddit (NYSE:RDDT) posted a 48% year-over-year increase in revenue to $234 million, nearly doubling its growth rate from the previous quarter and ahead of Wall Street estimates of $212 million.
Ad revenue was up 39% from the year-ago quarter at $222.7 million, above estimates of $199 million.
Average daily users surged 37% from Q1 2023 to 82.7 million, above the 28% increase expected by analysts.
However, the company’s losses were significantly more than expected. The company reported a loss per share of $8.19 or $575.1 million compared to estimates of a loss per share of $2.34.
In the year-ago quarter, the company posted a loss per share of $1.05 or $60.9 million.
Reddit (NYSE:RDDT) attributed its net loss to its initial public offering (IPO) expenses and noted this was its first profitable Q1 on an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) basis.
“It was a strong start to the year and a milestone quarter for Reddit (NYSE:RDDT) and our communities as we debuted as a public company,” CEO Steve Huffman said in a statement. “We see this as the beginning of a new chapter as we work towards building the next generation of Reddit.”
Reddit shares added 17.3% at about $58 shortly after the release of its Q1 report.
- Updated with Q2 guidance -