Reddit Inc Reports Strong Q3 Results

Reddit Inc (NYSE:RDDT) reported better-than-expected third-quarter results and provided strong guidance, which resulted in shares soaring over 17% in after-hours trading.

The social media platform posted adjusted earnings per share of $0.16, significantly beating analyst estimates of a $0.23 loss. Revenue for the quarter jumped 68% YoY to $348.4 million, surpassing the $312.8 million reported in the same quarter last year and analyst expectations.

Reddit's daily active unique users (DAUs) increased 47% YoY to 97.2 million. The company achieved GAAP profitability with a net income of $29.9 million, compared to a net loss of $7.4 million in the prior year. Adjusted EBITDA came in at $94.1 million, a substantial improvement from negative $6.9 million a year ago.

> “It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability,” said Steve Huffman, Co-Founder and CEO of Reddit.

Looking ahead, Reddit provided upbeat guidance for the fourth quarter, projecting revenue between $385 million and $400 million, above the consensus estimate of $357.9 million.

The company's gross margin improved to 90.1%, up 280 basis points from the previous year. Reddit also reported positive operating cash flow of $71.6 million and free cash flow of $70.3 million for the quarter.