Reddit Shares jump 10% After Revenue Pops in First-ever Earnings

Reddit shares ( RDDT ) rose 10% after the social media platform posted strong revenue growth and improved profitability in its first earnings report since its market debut. The company surprised Wall Street with a forecast that it could post an adjusted profit in the second quarter, and its revenue outlook was far above estimates. Reddit's revenue for the first quarter was $243 million, a 48% increase from the $163.7 million it earned a year earlier. $222.7 million of this was from ad revenue alone, which was up 39% year-over-year.

Meta's ad revenue jumped 27% in the first quarter, followed by a 24% increase at Amazon and just 13% growth at Google-parent Alphabet. Reddit reported a net loss of $575.1 million, with stock-based compensation expenses and related taxes being $595.5 million, primarily driven by charges due to the initial public offering.

Reddit ( RDDT ) expects revenue to be between $240 million and $255 million in the second quarter, topping the $224 million expected by analysts. The midpoint of the guidance range suggests growth of about 32% for the second quarter, up from $183 million from a year earlier. Analysts believe that Reddit ( RDDT ) is still in the early stages of generating ad revenue and should benefit from expanded ad targeting and measurement tools. The company's more than 100,000 discussion forums have made it an attractive partner for companies looking to train their data-hungry AI models.

Technical Outlook
Reddit stock ( RDDT ) is trading with a Relative Strength Index (RSI) of 50.62 a reversal might be possible after the earnings review the stock daily price chart shows a "Three Bearish black crows" which are are potential signs of a trend reversal.