Reddit Skyrockets 18% After Hours As Q3 Outlook, Earnings Beat Spark Investor Frenzy – Reddit (NYSE:RDDT)

Reddit Inc. RDDT surged 17.82% in after-hours trading on Thursday after reporting second-quarter results that crushed Wall Street expectations and issued bullish third-quarter guidance.

What Happened: The social media platform reported second-quarter revenue of $499.6 million, beating consensus estimates of $424.73 million by 17.6%. Earnings per share hit 48 cents, more than doubling analyst expectations of 19 cents per share.

Total revenue climbed 78% year-over-year as daily active unique users increased 21% to 110.4 million. U.S. DAUq grew 11% while international DAUq surged 32%, according to Benzinga Pro data.

Reddit generated $111 million in both operating cash flow and free cash flow during the quarter. The company ended the second quarter with $2.06 billion in cash and cash equivalents.

“With 20+ years of conversations across 100,000+ communities, Reddit is the internet’s largest archive of authentic dialogue,” the company stated in its shareholder letter. Management emphasized Reddit’s role as foundational infrastructure for AI and large language models.

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Why It Matters: For the third quarter, Reddit expects revenue between $535 million and $545 million, significantly above Wall Street’s $471.49 million estimate. The company projects adjusted EBITDA of $185 million to $195 million.

SimilarWeb data showed download volumes jumped 77.98% in April and another 47.92% in May.

Multiple analysts raised price targets ahead of earnings, with Raymond James maintaining a Strong Buy rating and $175 target. The consensus price target stands at $150.67.

Reddit’s market cap reached $29.63 billion following the after-hours surge. The stock trades at a 257.58 price-to-earnings ratio.

With momentum in the 93rd percentile, Benzinga’s Edge Stock Rankings show RDDT trending positively across all time frames—see how it stacks up against other social media stocks.