Reddit Inc (NYSE:) reported better-than-expected third-quarter results and provided strong guidance, sending its shares soaring over 17% in after-hours trading.
The social media platform posted adjusted earnings per share of $0.16, significantly beating analyst estimates of a $0.23 loss. Revenue for the quarter jumped 68% YoY to $348.4 million, surpassing the $312.8 million reported in the same quarter last year and analyst expectations.
Reddit’s daily active unique users (DAUs) increased 47% YoY to 97.2 million. The company achieved GAAP profitability with a net income of $29.9 million, compared to a net loss of $7.4 million in the prior year. Adjusted EBITDA came in at $94.1 million, a substantial improvement from negative $6.9 million a year ago.
“It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability,” said Steve Huffman, Co-Founder and CEO of Reddit.
Looking ahead, Reddit provided upbeat guidance for the fourth quarter, projecting revenue between $385 million and $400 million, above the consensus estimate of $357.9 million.
The company’s gross margin improved to 90.1%, up 280 basis points from the previous year. Reddit also reported positive operating cash flow of $71.6 million and free cash flow of $70.3 million for the quarter.
