Reddit gains after strong sales in first report since IPO

livemint.com:

social media platform’s advertising system helped push quarterly sales higher than expected in its first results as a public company. Revenue increased 48% to $243 million in the period ended March 31, the social media company said Tuesday in a statement. Analysts, on average, estimated $211.9 million, according to data compiled by Bloomberg.

Reddit’s initial public offering in March was one of the largest on a US exchange this year, raising about $748 million. Its strong debut was bolstered by the site’s large user base and data licensing agreements with artificial intelligence companies, which will let those firms use Reddit’s data to train its AI systems. Reddit first filed confidentially for an IPO in 2021.

The company projected revenue of $240 million to $255 million in the current period ending in June. Analysts, on average, estimated $227.6 million. Reddit said the growth was spurred by investments in making the site easier to use and improvements in its ad targeting technology.

“It was a strong start to the year and a milestone quarter for Reddit and our communities," co-founder and Chief Executive Officer Steve Huffman said in the statement. “We see this as the beginning of a new chapter as we work toward building the next generation of Reddit." The shares hit a high of $60.40 in extended trading after closing at $49.40 in New York. While the stock got an initial boost in its first day of trading March 21, raising the market value of the company to about $8 billion, it has since dropped 2%.