Reddit Shares Surge Following Strong Earnings Report

New York, NY — Reddit CEO Steve Huffman celebrated a notable uptick in the company’s stock price after the social media platform reported strong first-quarter earnings that exceeded Wall Street expectations. On March 21, 2024, Reddit’s shares increased by over 16% in after-hours trading when it announced a revenue growth of 61% year-over-year and a net income of $26.2 million.

Reddit has projected its second-quarter sales to be between $410 million to $430 million, surpassing analysts’ predictions of $396 million. In a letter to investors, Huffman acknowledged the ongoing economic fluctuations between the U.S. and China, expressing confidence in Reddit’s ability to navigate these challenges. He stated, ‘Ever-shifting macro environments like these create both challenges and opportunities. We’ve grown through challenging times before — people need connection and information just as much in uncertain times.’

The company’s global daily active users also saw a significant increase, with figures rising 31% year-over-year to 108.1 million in the first quarter, surpassing expectations of 107.3 million. Reddit’s logged-in daily active users grew 23%, while logged-out users jumped 38%, indicating a growing user base, driven by recent site updates designed to convert casual users into account holders.

Huffman noted, ‘Our recent updates have been aimed at encouraging logged-out users to create accounts, making them more valuable to advertisers.’ Despite experiencing a dip in user growth earlier this year due to a Google search algorithm change, the company rebounded as search-driven traffic improved.

In a broader context, Reddit’s report aligns with mixed trends across the tech industry. Other companies, like Meta, reported challenges linked to advertising sales in Asia, while Amazon‘s web services growth slowed for the third straight quarter. The tech industry continues to navigate a shifting economic climate, influenced by factors such as tariffs on imports and evolving consumer behavior.

As Reddit prepares for future earnings, it remains focused on expanding its user base and adapting to market dynamics. Huffman concluded with optimism about Reddit’s position: ‘We are well-positioned to meet this moment.’