Reddit stock rocketed late Tuesday after the newly-public social media company reported quarterly results for the first time. Revenue for Reddit came in above expectations, while the company's loss was not as bad as analysts feared.
In results published after the market closed, Reddit said that it lost $8.19 per share on sales of $243 million. Analysts were expecting Reddit to post a loss of $8.75 per share from sales of $214 million, according to FactSet.
The big per-share loss was driven by expenses related to the company's public offering, Reddit said. Sales advanced 48% year over year.
On the stock market today, Reddit stock rose more than 12% to 55.41 in recent after-hours action.
Reddit Earnings Follow March IPO
Reddit completed an initial public offering on the New York Stock Exchange in March. In the lead-up to its IPO, investors honed in on the fact Reddit had yet to post a profit over nearly two decades in business.
But the company gave a positive forecast on its steps toward profitability. Reddit projects its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) will be between break-even and $15 million in the second quarter. Analysts were previously projecting EBITDA to come in at a loss of $18 million for the June period, according to FactSet.
Meanwhile, Reddit projects revenue for the current quarter between $240 million and $255 million, compared with analysts' previous estimates of $227.5 million, according to FactSet.
Daily active unique users on Reddit increased 37% year over year to 82.7 million, Reddit said.
"It was a strong start to the year and a milestone quarter for Reddit and our communities as we debuted as a public company," Reddit Chief Executive Steve Huffman said in a news release. "We see this as the beginning of a new chapter as we work towards building the next generation of Reddit."
Reddit Stock: Volatile Since Debut
As can be common with IPO stocks, Reddit stock has been volatile in its first weeks on the public markets.
Shares soared as much as 70% beyond the 34 offering price when Reddit went public on March 22.
Since then, they have bounced around to as high as near 75 and as low as 37.35.
