Reddit co-founder and CEO Steve Huffman will speak at the WSJ Tech Live Conference hosted by the Wall Street Journal in Montage Laguna Beach, Laguna Beach, California, on October 21, 2024.
Frederick J. Brown | AFP | Getty Images
Reddit stock fell more than 15% on Wednesday after reporting exceeded expectations in fourth quarter revenues.
Here’s how the company did it compared to LSEG estimates:
- Earnings per share: 36 cents vs 25 cents are expected
- Revenue: $428 million It is expected to be $405 million
Global Daily Active Uniques (DAUQ) rose 39% from the previous year to an average of 101.7 million in the fourth quarter. The estimated Wall Street value was 103.1 million.
Changes to Google search algorithms caused “volatility” accompanied by user growth in the fourth quarter, but the company’s search-related traffic recovered in the first quarter, Reddit CEO Steve Huffman in a letter to shareholders I’ve said that.
“What happened wasn’t uncommon. Referrals from searches fluctuate from time to time, primarily affecting users who are logged out,” Huffman wrote. “Our team did an excellent job navigating numerous algorithm updates and adapting effectively to these latest changes.”
Reddit has benefited from Google search updates and improved internal sites, helping to attract a significant amount of new users that social companies call logged out over the past year and a half. Reddit says it is working to convince logged out users to create an account as the logged in user.
Global Logged-in Dauq rose 27% year-on-year to 46.1 million, while Global Logged-Out Dauq rose 51% to 55.6 million.
In the revenue call, Huffman said that Google’s algorithm changes are made about twice a year, adding that it is “not the first, not the last.”
“It mainly affects logged out users in the US,” he said. “It was really interesting, but because there was actually a swingdown, and then the recovery happened at the end of the quarter soon after.”
Despite the lack of user numbers, the company reported a strong quarter and provided optimistic guidance.
Reddit sales rose 71% from the previous year’s $250 million growth rate, the fastest quarter since 2022.
The company said first quarter revenues ranged between $360 million and $370 million ahead of the average analyst estimate of $358 million.
Net income almost quadrupled from $18.5 million or from break-even per share a year ago to $71 million or 36 cents per share. Reddit reported an adjusted profit of $154 million in the fourth quarter, surpassing analysts’ $128 million forecast.
Reddit went public at $34 per share in March and has since jumped from more than six times to more than $216.47 as of the end of Wednesday. The shares rose 32% this year before the sale outside of business hours.
Reddit’s fourth quarter revenues followed several other online advertising technology companies that recently reported recent quarterly revenues.
last week, Amazon Reporting revenue for the four quarter, he said the online advertising business recorded $172.9 billion, an 18% increase from a year ago. With fourth quarter revenue, Pinterest It said sales for that period increased 18% year-on-year to $1.15 billion.
Last week, Alphabet said Google’s ad sales rose 11% from a year ago to $72.46 billion, while YouTube’s ad revenue rose 14% in the fourth quarter to $1.047 billion. I did. snapMeanwhile, it reported that its fourth quarter revenue growth rate was $1.56 billion, at 14% year-on-year.
Late January, Meta It said its fourth quarter revenue was $483.9 billion, an increase of 21% from the previous year. Microsoft It also reported that news ad sales increased 21% year-on-year in its latest quarterly revenue. Microsoft has not disclosed quarterly sales figures for that unit.
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