Reddit CEO Steve Huffman stands on the floor of the New York Stock Exchange (NYSE) after ringing a bell on the floor setting the share price at $47 in its initial public offering (IPO) on March 21, 2024 in New York City.
Spencer Platt | Getty Images News | Getty Images
Reddit reported third-quarter earnings on Thursday in which the company beat on the top and bottom, but the company saw its user growth for logged-in users slow down once again.
Shares were down about 4% at the market’s close.
Here’s how the company did compared with LSEG estimates:
- Earnings per share:Â 80 cents vs. 51 cents expected
- Revenue:Â $585 million vs. $546 million expected
The company said global daily active uniques for the third quarter grew 19% year-over-year to 116 million, surpassing analyst estimates of 114 million.
Reddit’s logged-in DAUq for the U.S., its most lucrative region, rose 7% year-over-year to 23.1 million during the third quarter. That was slower than the 12% year-over-year jump Reddit recorded during the second quarter when logged-in DAUq for the U.S. was 22.9 million.
The company’s third-quarter global logged-in DAUq rose 14% year over year to 50.2 million, while its global logged-out DAUq jumped 24% to 65.8 million.
Investors have been watching for any changes to Reddit’s user growth amid Google increasingly debuting generative AI features like AI Overview, which provides summaries to search questions. Reddit has seen a wave of users come to its platform from Google, and the social media company makes more advertising-related money from users who create accounts.
Reddit’s sales jumped 68% year-over-year in the third quarter, while net income was $163 million, representing a 23% increase from the $133 million it logged the previous year during the same period.
The company said it expects fourth-quarter sales to come in the range of $655 million to $665 million, ahead of the $638 million that Wall Street was expecting.
Reddit said it expects its adjusted earnings in the fourth quarter to be between $275 million and $285 million, topping StreetAccount’s projections of $259 million.
The company said third-quarter global average revenue per user was $5.04, ahead of analyst estimates of $4.82.
Third-quarter revenue in the U.S. came in at $480 million, surpassing StreetAccount estimates of $445 million. Reddit generated international third-quarter sales of $105 million, ahead of the $104 million that StreetAccount projected.
Reddit’s “Other revenue” category, which includes the company’s data licensing business, rose 7% year-over-year to $36 million.
Google and Meta both reported their third-quarter earnings on Wednesday in which both tech giants surpassed Wall Street expectations.
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