Reddit Inc. (NYSE:RDDT) has projected third-quarter revenue that surpasses Wall Street's expectations, indicating a rebounding digital ad market. However, the stock experienced a decline in extended trading.
What Happened: Reddit's forecast for the third quarter, its second since going public in March, suggests a resurgence in the digital ad market, attracting more advertisers to the platform, reported Reuters.
Analysts have attributed the stock's decline to the upcoming end of the pre-IPO lockup for private or pre-IPO investors on Friday. Additionally, the stock's low average revenue per user (ARPU) growth and the conservative quarterly forecast have also been cited as reasons for the downturn.
Despite these factors, Reddit's earnings have sparked optimism about the company's content licensing deals with Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Microsoft Corp. (NASDAQ:MSFT) backed OpenAI.
Reddit's CEO, Steve Huffman, announced plans to test new AI-powered search results later this year. The company expects its third-quarter revenue to be between $290 million and $310 million, compared to analysts' average estimate of $278.7 million, according to LSEG data.
"(This) is probably a 'sell the news' reaction to get out of the stock ahead of this Friday, when the pre-IPO lockup ends for private or pre-IPO investors," Michael Ashley Schulman, Chief Investment Officer, Running Point Capital said.
Why It Matters: Reddit's forecast comes on the heels of a strong second-quarter performance, where the company reported a revenue of $281.2 million, a 54% increase from the previous year.
The company's daily active unique visitors also rose by 51% to 91.2 million in the second quarter, while its global ARPU increased by about 2% to $3.08. Despite these positive results, the company's shares experienced a decline in extended trading.
Reddit's strong performance in the second quarter showed a significant increase in daily active unique users by 51% year-over-year. This growth in user engagement is crucial for attracting advertisers, which is a key revenue stream for the platform.
In May, JPMorgan highlighted Reddit's enhanced advertising tools as drivers for "sizable upside." The company's first-quarter results had already surpassed expectations, setting a positive tone for subsequent quarters.
Furthermore, the debate about Reddit's value underscores the platform's potential and the high expectations from its user base and investors.
Price Action: Reddit Inc. closed at $54.36 on Tuesday, down 4.31%. In after-hours trading, the stock continued to decline, falling by an additional 4.53%. However, year to date, Reddit Inc. has seen an overall increase of 7.77%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
紐交所的Reddit公司（NYSE：RDDT）預計第三季度的營業收入將超過華爾街的預期，表明數字廣告市場正在復甦。然而，該股票在延長的交易中出現了下跌。
發生了什麼：據路透社報道，Reddit對第三季度的預測是自3月份上市以來的第二次預測，表明數字廣告市場正在復甦，吸引更多的廣告商進入該平台。
分析人士將該股票的下跌歸因於週五即將結束的私募或上市前投資者的解禁。此外，股票的用戶每月平均收入增長率下降和保守的季度預測也被認爲是下跌的原因。
儘管存在這些因素，Reddit的業績還是激發了人們對該公司與Alphabet Inc.（納斯達克代碼：GOOGL）（納斯達克代碼：GOOG）和Microsoft Corp.（納斯達克代碼：MSFT）支持的OpenAI進行內容許可協議的樂觀情緒。
Reddit的首席執行官Steve Huffman宣佈計劃於今年晚些時候測試新的人工智能搜索結果。根據LSEG數據，該公司預計第三季度營業收入爲2.9億到3.1億美元，而分析師的平均預期爲2.787億美元。
“（這）很可能是在本週五私募或上市前投資者解禁前退出股票的‘賣出新聞’反應，”Running Point Capital首席投資官Michael Ashley Schulman表示。
Reddit在第二季度表現強勁，公司報告營收爲2.812億美元，同比增長54%。
公司的每日活躍獨立訪問者在第二季度增長51%至9120萬，而全球ARPU增長約2%，爲3.08美元。儘管有這些積極的結果，該公司的股票在延長的交易中下跌了。
Reddit在第二季度表現強勁，每日活躍獨立用戶同比增長51%。這種用戶參與度的增長對於吸引廣告商非常關鍵，同時也是該平台的主要收入來源之一。
摩根大通在5月份強調了Reddit強化的廣告工具帶來的“可觀上漲”機會。該公司在第一季度的業績已經超過了預期，爲隨後的季度設定了積極的基調。
此外，Reddit價值的爭議凸顯了該平台的潛力以及其用戶基礎和投資者的高期望值。
股票買賣行爲：Reddit Inc.週二收盤價爲54.36美元，下跌4.31%。在盤後交易中，該股票繼續下跌，下跌了另外4.53%。然而，根據Benzinga Pro的數據，Reddit Inc年初至今的整體增長爲7.77%。
圖片來自Shutterstock。
本報道使用Benzinga Neuro生成，並由Kaustubh Bagalkote
