Reddit RDDT reported third-quarter 2024 earnings of 16 cents per share, comfortably beating the Zacks Consensus Estimate of a loss of 7 cents per share. Reddit had reported a loss of 13 cents per share in the year-ago quarter.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Revenues of $348.4 million surpassed the Zacks Consensus Estimate by 11.31%. The reported figure rallied 68% year over year.
Reddit offered a strong fourth-quarter 2024 guidance. This, along with the solid third-quarter earnings beat, is expected to drive the stock in the near term. Year to date, RDDT shares have surged 62.1%, outperforming the Zacks Computer & Technology sector’s return of 27.5%.
Reddit Inc. Price, Consensus and EPS Surprise
Reddit Inc. price-consensus-eps-surprise-chart | Reddit Inc. Quote
RDDT shares have also outperformed the Zacks Internet Software industry and peers Snap SNAP and Bumble BMBL over the same time frame.
While Snap and Bumble shares have declined 29.3% and 51.1% year to date, the industry has appreciated 25.6%.
RDDT’s Q3 Revenues Ride on Strong Advertising Growth
Advertising revenues increased 56% year over year to $315.1 million, driven by increased impressions from strong user growth.
Other revenues surged 547% year over year to $33.2 million, led by a new data licensing agreement with Alphabet’s GOOGL Google and OpenAI.
Daily Active Uniques (DAUq) jumped 47% year over year to 97.2 million. U.S. DAUq jumped 51% year over year to 48.2 million, while International DAUq increased 44% to 49 million.
Weekly Active Uniques (WAUq) rallied 53% year over year to 365.4 million. U.S. WAUq jumped 58% year over year to 178 million, whereas International WAUq increased 48% year over year to 187.4 million.
Average Revenue Per User (ARPU) moved up 14% year over year to $3.58. U.S. ARPU increased 12% to $5.88, whereas International ARPU climbed 16% on a year-over-year basis to $1.32.
Third-quarter 2024 U.S. revenues (contributed 82.7% to revenues) increased 70% year over year to $288 million. International revenues (17.3% of revenues) rose 57% year over year to $60.4 million.
The adjusted EBITDA was $94.1 million against an adjusted EBITDA loss of $6.9 million in the year-ago quarter.
RDDT’s Balance Sheet Remains Strong
As of Sept. 30, 2024, Reddit had cash and cash equivalents, including marketable securities of $1.745 billion, compared with $1.7 billion as of June 30, 2024.
In the third quarter, Reddit generated $71.6 million of cash from operating activities compared with $28.4 million in the previous quarter.
RDDT posted a free cash flow of $70.3 million compared with $27.2 million in the previous quarter.
Reddit’s Guidance Positive
For the fourth quarter of 2024, RDDT expects revenues between $385 million and $400 million, which indicates growth of 54-60% (57% at the mid-point).
Adjusted EBITDA is expected between $110 million and $125 million, indicating an adjusted EBITDA margin of 30% at the mid-point.
Zacks Rank
Reddit currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Snap Inc. (SNAP) : Free Stock Analysis Report
Bumble Inc. (BMBL) : Free Stock Analysis Report
Reddit Inc. (RDDT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
