Reddit shares rose 25% as it turned in its first gain

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Reddit, the social media platform known for its dedicated online community and ironic debates, surprised Wall Street months after going public for the first time, with shares surging 25 percent to record highs.

In a call with analysts, Reddit executives said investments in ad technology designed to improve ad effectiveness are paying off, such as using “machine translation” to automatically translate its content into languages ​​it seeks to grow its audience. It now has nearly 100 million daily active users, up 47 percent year over quarter

The company, which floated on the New York Stock Exchange in March, reported net income of $29.9 million in the third quarter, up from a net loss of $7.4 million in the same period last year and above Wall Street estimates of $10 million. damage

“In 2025 and beyond, we will look for opportunities to accelerate our roadmap, whether through new product development, global expansion or growing our advertising business,” said Steve Huffman, Reddit's chief executive, “while maintaining our commitment to scale profitably.” Making sure Reddit is the place to go for conversation and community on the Internet.”

Reddit's third-quarter revenue rose 68 percent to $348.4 million, beating the Wall Street consensus of $314.8 million. It forecast revenue for the current quarter of $385mn to $400mn, above Wall Street forecasts.

Huffman said the company will invest in modernizing its search capabilities, including developing “beautiful results pages” and integrating large language models into results data.

Huffman also said the company is looking to support businesses, brands and creators with an official presence on Reddit, signaling a new direction for a platform once known for a more hands-off approach to hosting and moderating edgy, anonymous conversations.

The White House now has an official account with its new Reddit Pro business offering, he added, and used it to share critical information with local communities during recent hurricanes in the United States.

However, Huffman was more cautious when talking about the licensing deals — to sell its data to tech and AI companies to train their models — that it is demanding ahead of its listing.

In particular, the company built enthusiasm by citing it as a potential revenue driver when it struck deals with Google and later OpenAI.

However, on Tuesday, Huffman said the company was still in talks about future deals, which were “limited” in number and mainly with smaller players.

“The story here is that Reddit data is extremely valuable to many players in the market,” Huffman said. “So we're finding the right balance between being open for business and making this information accessible and building our own product on top of it.”