RDDT Stock Pops Big After-Hours: Revenue And Earnings Smash Expectations

• RDDT revenues jump by nearly 200 million year-on-year.
• Cos daily active users jumps 17% and beat expectations.
• RDDT Q2 revenue guidance surpasses expectations.

Reddit (RDDT) stock gained 12% after-hours after the company’s Q1 revenues and earnings far exceeded Wall Street expectations, alongside robust second-quarter guidance, which was also above street bets. 

Reddit reported adjusted earnings of $1.01 per share, beating expectations of $0.57 per share, according to data from Fiscal.ai. Total revenue reached $663 million, far exceeding the consensus expectation of $609.8 million amid strong advertising demand. 

The social platform saw daily active users of 126.8 million during the quarter, a 17% increase from the prior year, driving more advertising interest. That was more than the 125.9 million analysts expected.

RDDT Q2 Guidance 

Reddit projected Q2 revenue between $715 million and $725 million, surpassing consensus analyst estimates of $715.5 million, per Fiscal.ai, signaling that momentum in advertising demand driven by a higher user base is expected to continue. 

RDDT Analyst View 

Rothschild & Co Redburn lowered its price target on Reddit to $110 from $125 and maintained its ‘Sell’ rating ahead of the earnings report. 

The firm believes Reddit's business will continue to have structurally higher margins than its peers. However, it views buy-side estimates as challenging, making upside unlikely given that the stock "still commands a premium multiple." 

Alternatively, DA Davidson initiated coverage of Reddit with a ‘Buy’ rating and $200 price target, citing a belief that Reddit remains "incredibly under-monetized relative to peers." 

The "human-first social platform" should continue to attract more users and advertisers as it scales, which should support more favorable contract renewals with the leading LLMs, a broader base of advertisers, and further operating leverage, the analyst told investors. 

RDDT Retail View 

One user claimed the stock is a “monster in the making.”

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The stock has lost 36% year-to-date.