Reddit (RDDT) shares surged 9.02% in pre-market trading on Friday, following the company's impressive first-quarter earnings report released after market close on Thursday. The social media platform significantly exceeded analysts' expectations and provided an optimistic outlook for the second quarter, instilling confidence in investors.

Reddit reported earnings per share of $0.13 for Q1 2025, substantially beating the consensus estimate of $0.02. Revenue for the quarter came in at $392.4 million, representing a year-over-year increase of 61.5% and surpassing Wall Street expectations of $370 million. The company's strong performance was primarily driven by robust growth in advertising revenue, which rose 61% to $358.6 million.

Key metrics also showed significant improvement, with daily active unique visitors (DAUq) increasing 31% year-over-year to 108.1 million, slightly above analyst expectations. Reddit CEO Steve Huffman highlighted the platform's unique advantage, stating, "Over 400 million people now come to Reddit each week—because when you want real opinions, you turn to real people."

Adding to the positive sentiment, Reddit provided an optimistic outlook for the second quarter of 2025. The company forecasts Q2 revenue between $410 million and $430 million, surpassing the analyst consensus estimate of $395.5 million. Additionally, Reddit expects adjusted EBITDA in the range of $110 million to $130 million for Q2, further demonstrating the company's confidence in its continued growth and profitability.

The strong earnings report and guidance have led to a wave of positive reactions from investors and analysts alike. The stock's pre-market surge reflects growing confidence in Reddit's ability to monetize its user base effectively and compete in the digital advertising market. With the total number of active advertisers growing over 50% year-over-year and broad growth across advertising verticals, Reddit appears well-positioned to capitalize on its expanding user base and unique platform offerings.