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Reddit's strong forecasts spark share surge after first results since IPO

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Reporting by Aditya Soni in Bengaluru; Editing by Pooja Desai

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Reddit Posts $575 Million Loss Tied to I.P.O. but Also Strong Growth

Reddit’s first earnings report as a public company showed leaps in users and advertising revenue, along with expenses related to its initial public offering.

By Mike Isaac

Mike Isaac has covered Reddit from San Francisco since 2010.

Reddit on Tuesday posted a more than $500 million quarterly loss in its first earnings report as a public company, largely due to stock-based compensation expenses incurred during its initial public offering in March.

But the social media company also saw robust revenue and user growth, underscoring the potential of its digital advertising business as people flock to the site. Last month, Google , Meta and Snap also reported rising advertising sales and double-digit revenue growth.

Reddit’s revenue was $243 million in the first quarter, up 48 percent from $163.7 million a year earlier and above Wall Street estimates of $214 million, according to data compiled by FactSet. The net loss was $575.1 million, compared with a loss of $60.9 million a year earlier. Stock-based compensation expenses totaled $595.5 million, versus $13.2 million a year earlier. Daily active users jumped to 82.7 million, up 37 percent from a year earlier.

The result sent Reddit’s shares soaring 17 percent to $58 in after-hours trading.

Steve Huffman, Reddit’s co-founder and chief executive, attributed the growth to the company’s improvements in product updates and content recommendations to users.

“We’ve been saying for a long time that everyone has a home on Reddit, but we’ve gotten much better about helping them find it,” he said in an interview. “We’ve hit an inflection point where our work is working.”

Reddit, which went public after more than 18 years as a private company, has turned into a kind of litmus test for technology initial public offerings. The company successfully debuted in what had been a tepid I.P.O. market, with its shares soaring 48 percent on the first day of trading and giving investors cause for optimism. Reddit’s shares continue to trade above the company’s I.P.O. price of $34.

Essentially a message board where users congregate on forums to research and discuss interests they have in common, Reddit has spent years trying to diversify its main business of digital advertising. It has struck deals with Google and Cision, public relations services company, and is in talks with other companies that wish to license its vast amounts of conversation data, such as for building artificial intelligence technology. It has also tried to spur an e-commerce business.

In a letter to shareholders on Tuesday, Mr. Huffman said he expected to continue investing in A.I. technology to improve Reddit’s content recommendations so people spend more time on the site. He also plans to invest in search technology, which could help people find information from the conversations that have occurred across the site.

Reddit projected $240 million to $255 million in revenue in the current quarter, above Wall Street’s expectations.

Users, known as Redditors, had been skittish about the company’s going public, worrying that executives would put a priority on profits, and had vented their frustrations on message boards and across social media. But some of that angst seems to have died down in recent weeks, said Mr. Huffman, who described the past month as “relatively quiet.”

“We’re in a good place with a good foundation to build on,” he said.

Mike Isaac is a technology correspondent for The Times based in San Francisco. He regularly covers Facebook and Silicon Valley. More about Mike Isaac

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Reddit Stock Soars After Reporting Record User Traffic in First Earnings Report Since IPO

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Key Takeaways

• Reddit shares soared in extended trading Tuesday after the company released its first quarterly earnings report since it began trading in March.
• The social media company's first-quarter revenue was $243 million, a 48% increase from the year-ago period, while ad revenue increased 39% year-over-year to $222.7 million. Both exceeded Bank of America analysts' expectations.
• Reddit's net loss of $575.1 million widened from a year ago, "driven by IPO charges."
• Reddit also reported record user traffic, with daily active unique user numbers growing 37% year-over-year to 82.7 million, topping Raymond James analysts' estimates.

Reddit ( RDDT ) shares soared over 13% in extended trading Tuesday after the social media company reported record user traffic and rising revenue in its first quarterly earnings report since its initial public offering (IPO) in March.

The company's revenue for the first quarter of 2024 was $243 million, a 48% increase from the year-ago period. Ad revenue increased 39% year-over-year to $222.7 million. Both figures were above Bank of America analysts' expectations of $212 million and $199 million, respectively.

Reddit reported a net loss of $575.1 million or $8.19 per share, widening from a loss of $60.9 million or 1.05 per share in the first quarter of 2023, "driven by IPO charges."

The company also reported record user traffic, with daily active unique users (DAUq) jumping 37% year-over-year to 82.7 million, ahead of Raymond James analysts' expectations .

"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 CEO Steve Huffman said, adding that "we see this as the beginning of a new chapter as we work towards building the next generation of Reddit.”

The social media company said it anticipates revenue for the second quarter to be between $240 million to $255 million, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the range of $0 to $15 million, compared to the $10 million it reported in the first quarter.

Reddit's stock price was up more than 13% at $55.90 in extended trading as of 5 p.m. ET Tuesday, an increase of about 64% from its IPO price of $34.

Reddit. " Reddit Announces First Quarter 2024 Results ."

Bank of America Securities. "Reddit - 1Q Preview: Positive User and Industry Trends Suggest 1Q Upside."

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Reddit shares soar after company reports strong first-ever earnings with record user traffic

• Reddit beat expectations for its first financial quarter as a publicly traded company.
• Strong revenue growth and record user traffic sent the stock price up 16% in after-hours trading.
• R&D expenses were up four times compared to last year.

Reddit just delivered a big first quarter as a newly public company .

The social media platform beat analyst expectations Tuesday when it reported revenue of $243 million, up 48% from the same period last year. The company also boasted a record 82.7 million daily active users, up 37% from the year before.

"It was a strong start to the year and a milestone quarter for Reddit and our communities as we debuted as a public company," co-founder and Reddit CEO Steve Huffman said in a statement. "We see this as the beginning of a new chapter as we work towards building the next generation of Reddit."

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While still not yet profitable, the net loss of $8.19 a share was below the $8.75 a share loss that investors were bracing for.

"On a non-GAAP basis, adjusted EBITDA was approximately $10 million in the first quarter," CFO Drew Vollero told investors on the company's earnings call. "This marks our first profitable Q1 on adjusted EBITDA basis, which in digital advertising is traditionally the slowest quarter of the year."

Meanwhile, research and development costs soared by 300% year-over-year as the company beefed up its AI partnerships and advertising strategy. The company said its performance advertising segment drove more than half of the revenue growth for the quarter.

"The real money printer here is Reddit's AI data licensing deals, like the $60 million per year agreement with Google," said Jeremy Goldman, an analyst at Emarketer, a sister company to Business Insider. "With its distributed human moderation, Reddit is well-positioned to detect and prevent AI-generated spam, giving it an edge over rivals."

On the earnings call, Huffman said the company's near-term priorities are improving retention, search performance, and translating the site's content into languages other than English, which would help tap into international markets.

Huffman also said when it comes to third parties training their AI models on Reddit content for free, the days are numbered.

"I don't think companies that have taken or continue to take our data can expect to continue to do so with no repercussions," he said.

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The Met Gala 2024

By Tori B. Powell, Scottie Andrew, Kristen Rogers and Nick Remsen, CNN

Here's what happened on one of fashion's biggest nights

From CNN staff

Celebrities stunned Monday night at the Met Gala in New York City in earthen colors inspired by concepts like decay and fairytales.

The official dress code was " The Garden of Time ," which takes its title from a 1962 short story written by British author J. G. Ballard, set (as its title suggests) in a garden filled with translucent, time-manipulating flowers.

The Ballardian theme accompanies The Costume Institute’s exhibition,  “Sleeping Beauties: Reawakening Fashion,”  which will run at the Metropolitan Museum of Art from May 10 through September 2.

Here's what you should know:

• Co-chairs: Superstars Zendaya, Jennifer Lopez, Bad Bunny and Chris Hemsworth served as co-chairs — alongside American Vogue editor-in-chief, Anna Wintour. Lopez, who wore a nude illusion Schiaparelli gown , described it as "quite the honor" to serve as co-chair, although she hinted it might be the last time. "I think that’s it for me.”
• A second look from Zendaya: In addition to co-chairing, Zendaya worked double on the red carpet, which in fact was cream-colored . The "Challengers" star's first look was designed by Maison Margiela and was an ode to nature, with a towering headpiece tucked into a forest-green beret, a hummingbird on her neck and fruits and vines draped around her deep blue-and-green gown. Her surprise second appearance was styled by Law Roach and sourced from Beverly Hills vintage clothing store Lily et Cie.
• Fun spins on suits: Though their looks weren't as attention-grabbing as their counterparts on the green carpet, several celebrity men — including Donald Glover, Ed Sheeran and Jack Harlow — put fun spins on suits and tuxedos with subtle nods to the night's garden-centric theme.
• Celebrities in all-black: The red carpet saw an array of colors, including a handful who interpreted the year's theme in black ensembles. Stars like Juliana Canfield , Rosalía, Cardi B and Dua Lipa wore black. Rosalía explaining she wanted to embody lady Dior – but through the eyes of fashion designer Maria Grazia Chiuri, and described herself as "a black tulip."
• Who didn't attend: Met Gala favorites including Rihanna, Blake Lively, Kate Moss, Beyoncé, Solange and Taylor Swift were all not in attendance at this year's gala.

Here's who didn't show at the Met Gala this year

From CNN's Scottie Andrew

Alas, fashion lovers: Some of our favorite Met Gala attendees of years past did not grace the green carpet this year.

Perhaps the most notable absence was that of Rihanna , who's delivered some of the most memorable Met Gala looks of recent memory, including her stunning yellow Guo Pei cape from 2015 or that incredible, gem-encrusted mitre hat from John Galliano. When she has stopped by the Met Gala, she's typically one of the final celebs to walk the carpet.

Blake Lively , another Met Gala regular, didn't return this year either. Amateur Met Gala historians are still fawning over her 2022 Versace gown inspired by the Statue of Liberty's patina.

Supermodel Kate Moss was noticeably missing. Her 1995 pastel yellow Calvin Klein gown is one of the most casually beautiful looks in Met Gala history.

Beyoncé hasn't been to the Met Gala since 2016 , and yet every year, fans hold out hope that she'll make her grand return. At least she's delivered some exceptional country-fied looks on Instagram to celebrate the release of her new album, "Cowboy Carter."

Solange , sister of Beyoncé and fashion icon in her own right , was deeply missed at this year's Met Gala. The carpet could've used her unique infusion of personality, intellectual curiosity and fearlessness.

And finally, Taylor Swift, the other concert movie queen of 2023, has also chosen not to return to the gala since 2016 . Perhaps she'll consider returning in 2025 once she's taken a break from world domination.

"Succession" stars take the night off at the Met

These looks would never fly at WayStar Royco.– but on the Met Gala red carpet, the stars of the Emmy-winning HBO drama eschewed the corporate dress code.

"Eldest boy" Jeremy Strong , currently starring on Broadway in "An Enemy of the People," wore a creamy tux with floral embellishments on one side of his lapel and a single earring that Logan Roy would certainly not approve.

Kieran Culkin , who won an Emmy for his raucous performance as Roman Roy, was accompanied by his wife Jazz Charton and wore a colorfully printed suit.

Tom Wambsgans himself, Matthew Macfadyen , jazzed things up with a velvety blue tuxedo jacket.

And Juliana Canfield , who played Kendall's beleaguered assistant Jess across four seasons, finally got her moment in the spotlight, dazzling in a strapless black gown with a giant bow across the bodice and a feathery skirt.

Celebrity men put subtle fun spins on suits

Though their looks weren't as attention-grabbing as their counterparts on the green carpet, several celebrities made impressions in suits and tuxedos with subtle nods to the night's garden-centric theme.

Donald Glover, who recently teased new music from his rap alter ego Childish Gambino, looked relaxed in various shades of brown.

Ed Sheeran, attending with Stella McCartney, wore a powder blue suit straight out of an '80s prom, complete with a casually undone bowtie.

Jack Harlow, on his third trip to the Met Gala, matched his mullet-in-progress with a gray-and-silver suit.

Nicolas Galitzine, who stars opposite Anne Hathaway in Amazon's romance "The Idea of You," wore a sharp custom Fendi tuxedo to his first Met Gala.

A blond Adrien Brody accented his otherwise standard black tuxedo with a large silver brooch.

Sebastian Stan looked relatively subdued in a black T-shirt and pants, minus his dashing coat with black sequin appliques.

Director Taika Waititi, accompanying wife Rita Ora to her 10th Met Gala, wore a monochromatic milky brown suit complete with gloves. It looks as though he was dipped in the river at Willy Wonka's chocolate factory.

Zendaya reveals second Met Gala look

From CNN's Kristen Rogers

Just when we thought we'd seen the last of her, Zendaya is again walking the Met Gala carpet in a surprise second look styled by Law Roach and sourced from Beverly Hills vintage clothing store Lily et Cie.

In addition to the dramatic black Victorian gown — pulled from the archives of spring/summer 1996 Givenchy by John Galliano — she accessorized with a headpiece crafted from a bouquet of roses. It was designed by Philip Treacy for Alexander McQueen for spring/summer 2007.

Lizzo's headpiece turned her into a flower

Dressed like a whimsical character out of Lewis Carroll's Wonderland, Lizzo's dress didn't stop at her neck. Instead, it turned into a conical hat that wrapped around her face and was laced in the back with corset-like closures. The hem of her dress curved up, like the lip of an anthurium flower.

Nicki Minaj pops in colorful custom Marni

Nicki Minaj has made her grand entrance at the Met Gala, wearing a vibrant yellow Marni minidress reminiscent of an idyllic oil painting.

This controversial Met Gala look glows in the dark

Model Amelia Gray's mini Undercover dress is one of the most ambitious of the night: When the marigold look was modeled on the runway, it was filled with live butterflies.

The dress now appears to feature roses alone, but it's no less show-stopping. It glows in the dark, too, though the lights of the carpet were too bright for the effect to fully dazzle.

The "terrarium" dress closed Undercover's Spring-Summer 2024 show in Paris and is now on the cover of the hardcover book commemorating the Metropolitan Museum of Art's exhibit, "Sleeping Beauties: Reawakening Fashion."

It wasn't without its detractors, though. Designer Jun Takahashi apologized for featuring live insects inside the dress after animal rights organization PETA criticized the look.

Lewis Hamilton's Burberry look pays homage to the first Black gardener in Wales

The British Formula 1 driver was proud to share the inspiration behind his oversized black coat from Burberry: An unnamed gardener, an enslaved man brought to the UK in the slave trade who became the first Black gardener in Wales in the 18th century.

The slave trade was abolished in the British Empire in 1807 and the Slavery Abolition Act went into effect in 1834.

"Through adversity, he really triumphed," Hamilton said.

Inside the coat is a large tag with a poem from an unnamed Black English poet, he said.

Hamilton's dedication to the Met Gala — this year is his fifth — is unmatched. He was in Miami just this morning after racing there on Sunday.

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