Reddit (RDDT, Financials) reported third-quarter earnings that surpassed analyst expectations, driving a 22% surge in premarket trading on Wednesday.
With adjusted profits per share of $0.16, the business outperformed analysts expecting a $0.23 loss. Rising 68% year-over-year to $348.4 million, quarterly income exceeded expert forecasts and outperformed previous year's $312.8 million.
Rising 55% year over year, advertising income exceeded experts' projected $275 million to reach $315 million. Jefferies analysts, who boosted their price objective on Reddit shares from $100 to $120, citing ongoing monetization possibilities, have noted that Reddit's ad revenue growth has now risen for the fourth straight quarter.
Rising 47% year over year, daily active unique users now number 97.2 million. In contrast to a net loss of $7.4 million year earlier, the firm also declared net gain of $29.9 million. Rising from minus $6.9 million in the same quarter previous year, Adjusted EBITDA rose to $94.1 million.
While operational cash flow was $71.6 million and free cash flow remained at $70.3 million, Reddit's gross margin climbed to 90.1%, a 280-basis-point gain over the previous year.
Looking forward, Reddit gave fourth-quarter income projections ranging from $385 million to $400 million, above the average expectation of $357.9 million.
Co-founder and Reddit CEO Steve Huffman pointed out that throughout the quarter the business reached notable benchmarks in user traffic, profitability, and revenue growth.
