Reddit Inc forecast second-quarter revenue above Wall Street estimates, driven by growing digital advertising spend despite uncertainty over marketing budgets. The company’s shares rose 7% after CEO Steve Huffman expressed concerns about disruptions from Google search. However, revenue growth and a near-term earnings beat suggest that Reddit’s ad tech investments are paying off.
Redditors have benefited from the company’s conversation placement ads format, allowing brands to advertise within discussion threads in interest-based communities called subreddits. The number of active advertisers grew over 50% in the first quarter, exceeding analysts’ estimates.
The company expects $410-430 million in revenue for the current quarter, above the average estimate of $395.5 million. Reddit’s profit per share is expected to be between $110-130 million, ahead of Wall Street expectations. The stock has rebounded after a 27% drop this year, driven by growing ad revenue and improved user engagement through AI-powered products.
Reddit faces competition from rival platforms like TikTok, Facebook, and Instagram for digital ads, but its strong growth suggests it is a reliable choice for marketers.
Source: https://finance.yahoo.com/news/reddit-forecasts-quarterly-revenue-above-200914026.html