Overview
- Reddit, which reported Thursday, posted revenue of $663 million and earnings of $1.01 per share, beating Wall Street forecasts on both metrics.
- The company guided second‑quarter revenue to $715 million to $725 million and projected adjusted EBITDA of $285 million to $295 million, both above analyst expectations.
- Advertising drove the upside as ad sales rose 74% to $625 million, helped by AI tools like a Reddit‑specific copywriter, automatic image cropping, and ad placement inside relevant subreddit threads, while active advertisers grew about 75%.
- Profitability and cash generation strengthened with net income of $204 million, an adjusted EBITDA margin near 40%, free cash flow above $300 million, gross margin over 90%, and only $1 million in capital spending.
- Shares jumped in after‑hours and premarket trading on Friday as management touted Reddit’s value to AI developers through data partnerships with Google and OpenAI and said the company is still hiring even as some larger rivals cut staff.