Reddit (NYSE:RDDT) experienced a significant surge of 11% pre-market today after the social media company reported stronger-than-expected revenue and provided positive revenue guidance for the current quarter, underpinned by robust user growth.
Reddit, which launched its initial public offering in March, posted a Q1 loss of $8.19 per share, a wider loss compared to $1.05 per share a year earlier, while revenue increased by 48% to $243 million. This revenue figure exceeded analyst expectations, who had projected a loss of $6.32 per share on revenue of $214 million.
The widening losses were primarily due to expenses associated with the company’s IPO. The substantial revenue growth was attributed to a significant increase in user engagement, with daily active users growing by 37% to 82.7 million.
Steve Huffman, Co-Founder and CEO of Reddit, described the quarter as a strong start to the year and a significant milestone as the company made its public debut.
Looking forward, Reddit set its revenue expectations for the next quarter between $240 million and $255 million, which is well above Wall Street’s forecast of $223 million.