American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Business

Reddit shares surge 20% on record profit and strong revenue outlook

by admin August 2, 2025
August 2, 2025
Reddit shares surge 20% on record profit and strong revenue outlook

Reddit Inc. shares surged on Friday after the company posted its most profitable quarter to date and offered a third-quarter revenue forecast that significantly beat Wall Street expectations.

The strong performance, driven by growth in Reddit’s advertising business, marks a key milestone for the company following its public debut in March 2024.

For the second quarter, Reddit reported net income of $89 million, more than double the $36 million analysts had expected.

Revenue came in at $500 million, well above the average analyst estimate of $425 million.

The company expects revenue for the current quarter to range between $535 million and $545 million.

At the midpoint, this would exceed Wall Street’s $473 million forecast by more than 13%.

The upbeat results sent Reddit shares soaring as much as 20% after markets opened on Friday— their biggest intraday gain in nearly four months. Prior to Thursday’s announcement, Reddit shares were down 3.2% for the year.

Ad business expands as Reddit diversifies

Reddit’s financial results reflect the payoff of its ongoing investments in advertising infrastructure.

Chief Operating Officer Jennifer Wong highlighted the company’s focus on improving its ad stack, strengthening its sales team, and diversifying its advertiser base.

“We’re seeing more active advertisers on our platform,” Wong said. “The investments we’ve made in our sales team and in our ad stack and roadmap — well, our work is working.”

Historically, Reddit’s ad revenue has been driven by a relatively small group of large marketers.

The company is now actively targeting small and medium-sized advertisers, as well as expanding internationally to mitigate concentration risks.

Reddit’s ability to monetize its engaged user base is beginning to show results, with some analysts noting a shift in perception.

The company now boasts 110 million daily active users, a 2% increase from the previous quarter.

Meanwhile, its AI-powered tool, Reddit Answers, has reached 6 million weekly active users since its launch in December.

While monetization of this product remains in early stages, Wong said the company sees long-term opportunity.

AI, data licensing and market outlook

Beyond advertising, Reddit is pursuing revenue opportunities through data licensing.

The company has signed agreements with OpenAI and Google, and is seeking additional partnerships.

Reddit’s vast archive of user-generated content — spanning nearly two decades — has become a valuable resource for training AI models.

At the same time, Reddit is using its own data internally to power new features like Reddit Answers.

However, Reddit is also facing legal challenges in this area. The company is engaged in litigation against Anthropic PBC, alleging unauthorized use of Reddit data to train AI systems.

Analysts remain cautiously optimistic about Reddit’s prospects.

BofA Securities raised its price target on Reddit to $180 from $150, citing strong execution and a robust advertising outlook.

Still, the firm maintained a Neutral rating, pointing to Reddit’s high valuation relative to peers, limited scale of logged-in US users (23 million), and possible traffic disruptions related to changes in Google’s AI strategy.

With 64% year-over-year revenue growth and a fast-expanding ad base, Reddit appears well-positioned, though the company must navigate competition and valuation concerns as it scales.

The post Reddit shares surge 20% on record profit and strong revenue outlook appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
OpenAI raises $8.3B as AI demand grows: report
next post
Brazil antitrust watchdog probes Microsoft after Opera complaint over edge browser practices

Related Posts

65-year-old quit his job and emptied his life...

July 18, 2024

AppLovin stock has surged: brace for mean reversion...

December 10, 2024

Top adviser recommends against Elon Musk’s $56B Tesla...

June 2, 2024

European markets open: Stoxx 600 gains 0.3%; focus...

June 4, 2025

Intel shares slide as deeper losses, major job...

July 25, 2025

Hedge funds exit Asian markets ahead of US...

April 2, 2025

Indian markets open: Sensex, Nifty retreat after record...

April 16, 2025

As Tesla layoffs continue, here are 600 jobs...

May 19, 2024

Number of Bitcoin whales surpasses 1,600, hitting highest...

October 24, 2024

Vodafone share price rally has stalled: buy, sell,...

October 16, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Saudi Arabia poised to raise September crude prices to five-month highs

      July 28, 2025
    • From $824 to over $1,300: how soaring rents are consuming American paychecks

      July 27, 2025
    • India-UK sign historic free trade deal: here’s all you need to know

      July 24, 2025
    • Talen Energy surges 25% to ATH after strategic natural gas power plant acquisition

      July 20, 2025
    • US visa bans on Brazilian judges spark diplomatic rift, cloud economic ties

      July 20, 2025

    Categories

    • Business (3,550)
    • Investing (2,686)
    • Latest News (2,024)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved