Reddit shares are on the up after the website released its first quarterly results since its IPO in March.
Reddit’s revenue beat expectations coming in at $243 million vs the $212.8 million expected by LSEG.
The site’s ad revenue increase put it firmly ahead of its competitors: Reddit reported $222.7 million in ad revenue for the period, which was up 39 per cent year on year and is a faster rate of growth than its competitors.
Reddit’s soaring revenue follows a remarkable rise up Google’s search rankings, which left search marketing experts concerned. Some have suggested that when Google changed its algorithm in a Helpful Content Update, Reddit’s traffic across the internet increased fourfold, often at the expense of smaller independent publishers.
Higher Google rankings powers Reddit’s traffic, allowing it to monetise larger audiences and clicks.
For comparison, Meta’s ad revenue jumped 27 per cent in the first quarter, followed by a 24 per cent growth at Amazon and a 13 per cent increase at Google’s parent company Alphabet.
For the same period, Reddit reported a net loss of $575.1 million. This was mainly driven by expenses and taxes of $595.5 million which was mainly driven by charges caused by the IPO.
For the second quarter Reddit’s forecasting revenue of $240 million to $255 million – which is more than the $224 million that the analysts are expecting.
Reddit was founded in 2005 by Alexis Ohanian and Steve Huffman, who is currently the company’s CEO.
“We see this as the beginning of a new chapter as we work towards building the next generation of Reddit,” Huffman said in a release Tuesday.
Indy publishers raised concerns last month after Reddit’s traffic nearly quadrupled in just six months.
