Reddit's stock surged 14.01% in pre-market trading on Friday, marking a significant rebound for the social media platform.
The dramatic price movement follows the company's release of first-quarter financial results that far exceeded analyst expectations. Reddit reported earnings of $1.01 per share, beating estimates of approximately $0.58, while revenue climbed 69% year-over-year to $663 million. The company's net income saw a remarkable 680% increase to $204 million.
Investor sentiment was further bolstered by Reddit's strong second-quarter outlook, with revenue projected between $715 million and $725 million, above consensus estimates. Management attributed the outperformance to its AI-powered advertising tools, which are fueling a 74% surge in ad revenue and driving a 75% increase in its active advertiser base. The company highlighted that performance-oriented advertising now represents over 60% of total ad revenue, demonstrating effective monetization of its platform.