Reddit Stock Rises After First Post-IPO Earnings Report
Reddit stock is higher after the company's impressive Q1 results and strong Q2 outlook. Here's what you need to know.
 
 
Reddit (RDDT) stock jumped 5% in early trading Wednesday after the social media platform beat top- and bottom-line expectations in its first earnings report as a public company. Shares have since pared a portion of these earlier gains, but are still comfortably higher.
In the three months ended March 31, Reddit's revenue surged 48.4% year-over-year to $243 million. The top-line results were driven by a 37.1% increase in daily active uniques (DAUq) to 82.7 million and an 8.1% increase in average revenue per user to $2.94. Reddit defines DAUqs as users the company "can identify with a unique identifier who has visited a page on the Reddit website or opened a Reddit application at least once during a 24-hour period."
On the bottom line, Reddit posted a net loss of $575.1 million, up from a net loss of $60.9 million in the year-ago period, primarily due to charges related to its initial public offering (IPO) in March. Still, the company reported adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of positive $10.0 million vs negative $50.2 million in the year-ago period.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
 
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"It was a strong start to the year and a milestone quarter for Reddit and our communities as we debuted as a public company," Reddit co-founder and CEO Steve Huffman said in a statement. "We see this as the beginning of a new chapter as we work towards building the next generation of Reddit."
The top-line results easily beat analysts' expectations for revenue of $212.8 million, according to CNBC.
Reddit also provided an upbeat outlook for its second quarter. The company is calling for revenue in the range of $240 million to $250 million and adjusted EBITDA in the range of $0 to $15 million.
Wall Street, meanwhile, is anticipating Q2 revenue of $224 million, according to Yahoo Finance.
Is Reddit stock a buy, sell or hold?
Analysts were bullish on Reddit stock going into the earnings release. According to S&P Global Market Intelligence, analysts' average target price for RDDT is $55.07, representing implied upside of about 6% to current levels. Additionally, the consensus recommendation is Buy. However, these estimates could change following Reddit's strong first-quarter performance.
Financial services firm Needham has already reiterated its Buy rating and increased its price target to $63 from $55 in reaction to the company's quarterly results. The new $63 price target represents implied upside of roughly 22% to current levels.
What's more, Needham analyst Laura Martin added the communication services stock to her Conviction List, saying the company's impressive revenue and free cash flow growth growth, as well as its strong margin expansion are "indicative of RDDT's robust business model."
Additionally, Reddit is one of the best sources to train generative AI (artificial intelligence) large language models (LLMs), which should give the company pricing power, Martin says. "[I]ts content library contains 1 billion posts and 16 billion comments collected over the past 18 years, and its platform hosts 1.2 million new posts and 7.5 million new comments every single day," the analyst notes.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
- 
 I Just Paid Off My Car. Can I Downgrade My Car Insurance Now? I Just Paid Off My Car. Can I Downgrade My Car Insurance Now?You've gotten rid of that car payment. Can you save even more by downgrading your car insurance? Here's what to consider. 
- 
 Is Wireless Home Internet Right for You? Is Wireless Home Internet Right for You?T-Mobile’s 5G home internet offers flexibility, simplicity and potential savings but is it a replacement for cable or fiber? 
- 
 Are You Retired? Here's How to Drop the Guilt and Spend Your Nest Egg Are You Retired? Here's How to Drop the Guilt and Spend Your Nest EggTransitioning from a lifetime of diligent saving to enjoying your wealth in retirement tends to be riddled with guilt, but it doesn't have to be that way. 
- 
 Government Shutdown Freezes National Flood Insurance Program: What Homeowners and Buyers Need to Know Government Shutdown Freezes National Flood Insurance Program: What Homeowners and Buyers Need to KnowFEMA's National Flood Insurance Program is unavailable for new customers, increased coverage or renewals during the government shutdown. 
- 
 Separating the Pros From the Pretenders: This Is How to Tell if You Have a Great Adviser Separating the Pros From the Pretenders: This Is How to Tell if You Have a Great AdviserDo you leave meetings with your financial adviser feeling as though you've been bulldozed into decisions or you're unsure of what you're paying for? 
- 
 What Netflix Stock's 10-for-1 Split Means for Investors What Netflix Stock's 10-for-1 Split Means for InvestorsNetflix announced its long-awaited stock split after Thursday's close. NFLX will start trading on a split-adjusted basis ahead of the November 17 open. 
- 
 Stocks Sink with Meta, Microsoft: Stock Market Today Stocks Sink with Meta, Microsoft: Stock Market TodayAlphabet was a bright light among the Magnificent 7 stocks today after the Google parent's quarterly revenue topped $100 billion for the first time. 
- 
 Five Downsides of Dividend Investing for Retirees, From a Financial Planner Five Downsides of Dividend Investing for Retirees, From a Financial PlannerCan you rely on dividend-paying stocks for retirement income? You'd have to be extremely wealthy — and even then, the downsides could be considerable. 
- 
 Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market Today Dow, S&P 500 Slip on December Rate Cut Worries, Nvidia Boosts Nasdaq: Stock Market TodayNvidia became the first company ever to boast a $5 trillion market cap, but it wasn't enough to lift the Dow and the S&P 500. 
- 
 I'm a CPA: Control These Three Levers to Keep Your Retirement on Track I'm a CPA: Control These Three Levers to Keep Your Retirement on TrackThink of investing in terms of time, savings and risk. By carefully monitoring all three, you'll keep your retirement plans heading in the right direction.