Reddit Crushes Q1 Expectations: Shares Soar 20% on Earnings
Published • 1 May 2025 at 10:37 PM
Reddit Shares Jump 20% on Strong Q1 & Bullish Q2 Outlook
Reddit (RDDT) shares surged nearly 20% after the company crushed Q1 2025 expectations, reporting earnings of 13 cents per share on $392.4 million in revenue—well above analysts’ forecasts of 2 cents per share on $370 million. This marks a major turnaround from a Q1 2024 loss of $8.19 per share, driven by IPO-related expenses. Sales rose 61% year over year, and daily active users grew 31% to 108.1 million, topping estimates. Reddit also issued a bullish Q2 forecast, projecting $420 million in revenue, easing investor fears about the impact of U.S. tariffs on digital ad spending. CEO Steve Huffman highlighted Reddit’s resilience in “ever-shifting macro environments,” stressing its role in connecting users during uncertain times. The strong earnings contrast sharply with Reddit’s stock performance earlier in the year—down 27%—following a post-IPO surge. Despite past concerns about over-reliance on Google traffic and market headwinds, Reddit’s strong Q1 results and user growth position it well for future gains.
User Growth & Strong Q1 Lift Reddit (RDDT) Shares by 20%
- Stock Surge: Reddit shares soared nearly 20% after beating Q1 estimates.
- Earnings Beat: Reported 13 cents EPS on $392.4M revenue, surpassing expectations of 2 cents EPS and $370M revenue.
- Turnaround: A major improvement from Q1 2024 loss of $8.19 per share due to IPO costs.
- User Growth: Daily active users rose 31% to 108.1 million, exceeding projections.
- Sales Growth: Revenue grew 61% year-over-year.
- Q2 Outlook: Reddit forecasts $420M in Q2 revenue, calming fears over ad spending amid U.S. tariffs.
- CEO’s Comment: Steve Huffman emphasized Reddit’s resilience in "ever-shifting macro environments."
- Stock Performance: Despite strong earnings, Reddit stock is down 27% YTD, post-IPO surge.
- Concerns: Previous concerns included dependency on Google traffic and market volatility.
- Positioning: Strong Q1 results and user momentum boost Reddit’s growth prospects moving forward.
