Reddit, the popular online community platform, announced that it has exceeded analyst expectations for its second quarter earnings, thanks to robust digital ad spending.
‘Strong quarter across the board’
The platform’s revenue soared 54% year-over-year to $281 million, outpacing the anticipated $254 million. The platform’s net loss contracted to $10.1 million from $41.1 million in the same period last year.
“We had a strong quarter across the board and more people are visiting Reddit than ever before,” said Steve Huffman, Co-Founder and CEO of Reddit, in a press release. “Our work to improve the platform is driving results and we are well positioned to continue to grow and deliver on our long term mission.”
Online ad revenue climbed 41%
A key driver of Reddit’s growth was its advertising business. The digital ad market has continued to recover from a difficult 2022, when businesses pulled back on promotional spending because of inflation and other factors. Online ad revenue climbed 41% to $253.1 million, demonstrating the platform’s increasing appeal to advertisers.
Additionally, the company’s “other revenue,” primarily attributed to its data licensing business, surged by an impressive 691% to $28.1 million.
Increase in daily active users
Reddit also reported a significant increase in daily active users, reaching 91.2 million, a 51% jump from the previous year. This metric exceeded analyst projections of 84.5 million. The company’s average revenue per user (ARPU) also outperformed expectations, coming in at $3.08 compared to the estimated $3.02.
A bright outlook
Looking ahead, Reddit expressed optimism about its future performance. The company’s strategic partnerships with major sports leagues and tech giants like Google and Microsoft are expected to contribute to sustained growth. The platforms projected third-quarter revenue between $290 million and $310 million, surpassing analyst forecasts of $278.7 million.
