Reddit Exceeds Earnings Estimates But User Growth Misses Targets

Reddit (RDDT) reported stronger-than-expected fourth-quarter earnings, driven by robust revenue growth. However, user growth came below analyst estimates.

Key Financial Highlights:

* Revenue: $427.7 million, up 71% YoY
* Net income: $71 million, up 281% YoY
* Daily active users: 101.7 million, up 39% YoY

Analyst Consensus vs. Actual:

* Revenue: Consensus $425.9 million, Actual $427.7 million
* Net income: Consensus $66.9 million, Actual $71 million
* Daily active users: Consensus 103.24 million, Actual 101.7 million

Market Reaction:

Shares of Reddit initially surged in after-hours trading but later plunged 15% to $183.85 due to the disappointment in user growth.

Guidance:

Reddit expects first-quarter revenue between $360 million and $370 million, exceeding analyst estimates of $359.4 million.

Stock Performance:

Despite the post-earnings decline, Reddit's stock remains significantly above its March 2024 IPO price of $34, having risen nearly sevenfold.