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Reddit reports earnings tomorrow after the bell. In an unusual move, the company will be taking questions from its very own users.
Redditors can post questions in the subreddit r/RDDT, and the company will respond during the question and answer part of its first quarter earnings call with investors. Reddit has made an effort to make its users a part of its public debut, reserving 8% of its IPO shares to its most devoted Redditors with no lock-up period in March.
Raymond James analyst Josh Beck reiterated his strong buy rating of Reddit’s stock in anticipation of its earnings report Tuesday, given its “encouraging” user trends and demand for its data to train generative AI models. Bank of America analysts gave the stock a neutral rating but still anticipate a 30% increase in Reddit’s first quarter revenue compared to the prior year, especially given its data licensing agreement with Google.
Reddit shares stood at nearly $49 at market close on Monday, above Reddit’s IPO price of $34 but well below the stock’s all time high price of about $75 in the week following its public debut. Reddit hasn’t turned a profit since it was founded in 2005. The social media site posted a loss of $91 million in 2023, according to the company’s IPO filing with the Securities and Exchange Commission.
But the losses are getting slimmer. The company’s total loss shrunk 43% between 2022 and 2023, when Reddit started charging fees to third-party developers using its application programming interface (API). The move sparked outrage among Redditors, but their protests had little effect.
Reddit sales increased about 21% to $804 million last year.
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Reddit CEO Steve Huffman is paid more than the heads of Meta, Pinterest, and Snap — combined