Reddit (NYSE:RDDT) saw its shares soar over 24% in after-hours trading after the social media platform reported impressive third-quarter results and provided optimistic guidance for the fourth quarter.
For Q3, Reddit posted adjusted earnings per share of $0.16, far surpassing Street expectations of a $0.23 loss. Revenue climbed 68% year-over-year to $348.4 million, exceeding the prior-year figure of $312.8 million. Daily active users also surged, with DAUs up 47% year-over-year to 97.2 million.
Reddit achieved GAAP profitability with a net income of $29.9 million, a significant turnaround from the previous year’s $7.4 million loss. Adjusted EBITDA reached $94.1 million, a stark improvement from negative $6.9 million a year prior.
Looking ahead, Reddit projected Q4 revenue between $385 million and $400 million, well above the Street estimate of $357.9 million. Gross margin rose to 90.1%, and the company generated positive operating cash flow of $71.6 million and free cash flow of $70.3 million, highlighting its strengthened financial position.