Reddit Stock Falls After Mixed Q4 Earnings, Despite Improved Q1 Guidance
Key Points:
* Reddit (RDDT) shares declined 18% in after-hours trading following mixed Q4 earnings.
* Revenue surged 70% to $427.7 million, exceeding analyst forecasts.
* Diluted EPS missed estimates, falling to $0.36 versus the expected $0.48.
* Daily active users reached 101.7 million, slightly below expectations.
* CEO Steve Huffman attributed traffic volatility to Google algorithm changes, which have since stabilized.
* Reddit aims to convert logged-out users into active accounts with improved signup and personalized home screens.
* The company enhanced its AI-powered search tool to reduce reliance on Google Search.
* Reddit guided for Q1 revenue between $360 million and $370 million, surpassing analyst forecasts.
* Despite mixed Q4 results, Reddit remains a promising AI play with strong ad revenue growth and licensing deals with tech giants.