RDDT: Reddit Stock Soars 15% as Traders Cheer 48% Revenue Growth in 1st Earnings Report

Social media and chat platform surprised investors with promising revenue jump. But can it reach profitability?

• Reddit stock RDDT skyrocketed 15% in the after-hours session Tuesday and is on track to open Thursday trading just under $57 a share. The new entrant to the stock market issued its first quarterly earnings report, showing impressive figures. For the March quarter, Reddit picked up revenue of $243 million, up 48% from the year-ago timespan and above the $214 million expected.
• Still, the company lost $575.1 million, a big chunk of which went to finance the March IPO, which saw shares fly away. Adjusted earnings before interest, raxes, depreciation and amortization (Ebitda — a controversial measure nevertheless) dwindled to $10 million from $50.2 million one year ago. New members flocked in, too. Weekly active users shot up 40% to 306.2 million, and daily active users jumped 37% to 82.7 million.
• “It was a strong start to the year and a milestone quarter for Reddit,” chief executive Steve Huffman said in a press release. For the current quarter ending June, Reddit projects revenue of $240 million to $255 million. Wall Street expects $227.5 million. It’s a promising start toward profitability — in its 19-year history, Reddit has never made any money and investors are hoping to see this change.