Reddit shares surged 24% in premarket trading after the company reported its first quarterly profit since going public.
The third-quarter revenue reached $348.4 million, a 68% increase from the previous year, exceeding analyst estimates of $312.2 million.
Reddit posted a net profit of $29.9 million (16 cents per share), contrasting sharply with expectations of a $17.7 million net loss (10 cents per share).
For the fourth quarter, Reddit anticipates revenue between $385 million and $400 million, with adjusted EBITDA of $110 million to $125 million.
Analyst Insights:
Analysts from Citigroup noted that a 56% increase in advertising revenue significantly contributed to the overall sales growth. This was driven by more impressions and efficient ad placements.
Following the positive earnings report, JPMorgan raised its price target for Reddit from $77 to $110, while maintaining a "neutral" rating.
Currently, Reddit's shares are trading around $101, significantly higher than the $34 IPO price.
The third-quarter revenue reached $348.4 million, a 68% increase from the previous year, exceeding analyst estimates of $312.2 million.
Reddit posted a net profit of $29.9 million (16 cents per share), contrasting sharply with expectations of a $17.7 million net loss (10 cents per share).
For the fourth quarter, Reddit anticipates revenue between $385 million and $400 million, with adjusted EBITDA of $110 million to $125 million.
Analyst Insights:
Analysts from Citigroup noted that a 56% increase in advertising revenue significantly contributed to the overall sales growth. This was driven by more impressions and efficient ad placements.
Following the positive earnings report, JPMorgan raised its price target for Reddit from $77 to $110, while maintaining a "neutral" rating.
Currently, Reddit's shares are trading around $101, significantly higher than the $34 IPO price.