Home Finance/Economy/Business Reddit Skyrockets 18% After Hours As Q3 Outlook, Earnings Beat Spark Investor...

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.

See Also: Michael Saylor Says Strategy’s Current Capital Structure ‘Bulletproof’ Compared To 2022 Crypto Winter, Asserts Company Can Weather 80% Bitcoin Crash

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.

Trending Investment Opportunities

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.

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Photo Courtesy: Ink Drop On Shutterstock

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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