- Reddit beat expectations for its first financial quarter as a publicly traded company.
- Strong revenue growth and record user traffic sent the stock price up 16% in after-hours trading.
- R&D expenses were up four times compared to last year.
Reddit just delivered a big first quarter as a newly public company.
The social media platform beat analyst expectations Tuesday when it reported revenue of $243 million, up 48% from the same period last year. The company also boasted a record 82.7 million daily active users, up 37% from the year before.
"It was a strong start to the year and a milestone quarter for Reddit and our communities as we debuted as a public company," co-founder and CEO Steve Huffman said in a statement. "We see this as the beginning of a new chapter as we work towards building the next generation of Reddit."
While still not yet profitable, the net loss of $8.19 a share was below the $8.75 a share loss that investors were bracing for.
"On a non-GAAP basis, adjusted EBITDA was approximately $10 million in the first quarter," CFO Drew Vollero told investors on the company's earnings call. "This marks our first profitable Q1 on adjusted EBITDA basis, which in digital advertising is traditionally the slowest quarter of the year."
Meanwhile, research and development costs soared by 300% year-over-year as the company beefed up its AI partnerships and advertising strategy. The company said its performance advertising segment drove more than half of the revenue growth for the quarter.
"The real money printer here is Reddit's AI data licensing deals, like the $60 million per year agreement with Google," said Jeremy Goldman, an analyst at Emarketer, a sister company to Business Insider. "With its distributed human moderation, Reddit is well-positioned to detect and prevent AI-generated spam, giving it an edge over rivals."
This story is developing as Reddit conducts its 5pm ET earnings call…