Reddit's strong forecasts spark share surge after first results since IPO

"It was a strong start to the year and a milestone quarter for Reddit," and co-founder Steve Huffman said.

The company's daily active unique visitors jumped 37%, to 82.7 million in the first quarter ended March 31, while its average revenue per user increased by 8%.

That helped it post a 48% jump in revenue to $243 million, which was far above Wall Street expectations of $212.8 million, according to data. Its loss of $8.19 per share was also smaller than expectations for a loss of $8.71 per share.

The results follow strong earnings from rivals including and fan optimism that marketers are ramping up spending this year, after an ad market slump in 2023 caused by sticky inflation and an uncertain economic outlook.

Reddit is also trying to diversify revenue by licensing its user-generated content for the training of data-hungry AI models. It signed a deal with earlier this year that is worth about $60 million annually.

"Reddit has cultivated a diverse and loyal audience that advertisers covet. But the real money printer here is Reddit's AI ," said senior director of briefings Jeremy Goldman.

Company executives signaled on a post-earnings call that Reddit was in talks for more such deals and has seen an increase in interest in its data.

Reddit said it expects second-quarter revenue to be between $240 million and $255 million, compared with an estimate of $223.8 million.

It expects adjusted earnings before interest, taxes, depreciation, and amortization to be between break-even and $15 million in the second quarter, compared with estimates for a loss of $18.2 million.

With Reddit's shares at $57.67 in extended trading, the stock has surged about 70% from the price in its March IPO.