Steve Huffman, co-founder and CEO of Reddit, speaks at the WSJ Tech Live conference organized by the Wall Street Journal at the Laguna Beach editing in Laguna Beach, California, October 21, 2024.
Frederic J. Brown | AFP | Getty images
Reddit’s shares fell by more than 15% on Wednesday after the company said weaker than expected user numbers in its profits in the fourth quarter.
Here’s how the company compared to LSEG estimates:
- Profit by action: 36 cents against 25 hundred expected
- Income: $ 428 million Against $ 405 million expected
Global Daily Active Unique, or Dauq, increased by 39% compared to an average to an average of 101.7 million for the fourth quarter. Who followed the estimates of Wall Street of 103.1 million.
A change in Google research algorithm caused “volatility” with user growth in the fourth quarter, but traffic related to the company A has since recovered in the first quarter, said Steve Huffman, CEO of Reddit, in A letter to the shareholders.
“What happened was not unusual – the references of research fluctuate from time to time, and they mainly affect recorded users,” wrote Huffman. “Our teams have saved many algorithms updates and have done an excellent job to adapt effectively to these latest changes.”
Reddit has benefited from Google research updates and internal site improvements that helped it obtain a large amount of new and returned users, which social society calls disconnected users, during the last year and a half. Reddit said he tried to convince connected users to create accounts as connected users, who are more lucrative for his business.
DAUQ connected to Global increased from 27% from one year to the next to 46.1 million during the quarter, while DAUQ registered worldwide increased by 51% to 55.6 million, the company said.
Despite the missing on the user number, the company otherwise reported a solid district and provided optimistic advice.
Reddit sales jumped 71% during the quarter, compared to $ 250 million a year earlier, the fastest growth rate for any quarter since 2022.
The company said that sales in the first quarter will be between $ 360 million and $ 370 million, before the $ 358 million analyst’s average estimate.
Net profit has almost quadrupled at $ 71 million, or 36 cents per share, compared to $ 18.5 million, or the profitability threshold, a year earlier. Reddit said an adjusted profit of $ 154 million in the fourth quarter, exceeding the expectations of $ 128 million analysts.
The results of the Reddit fourth quarter have followed several other online advertising technology companies that recently published their latest quarterly results.
Last week, Amazon Generated in the fourth quarter, saying that his online advertising company had recorded $ 17.29 billion, up 18% compared to a year ago. In his fourth quarter income, Pinterest said its sales during the period increased from 18% from one year to the next to $ 1.15 billion.
Last week, Alphabet also said that its Google advertising sales increased by 11% compared to one year before $ 72.46 billion, while YouTube’s advertising revenues jumped 14% to 10.47 billion dollars in the fourth quarter. InstantMeanwhile, fourth quarter income growth of 14% from one year over the other to $ 1.56 billion.
End of January, Meta said his revenues for the fourth quarter reached $ 48.39 billion, up 21% compared to the previous year. Microsoft also indicated that its advertising sales increased by 21% from one year to the other in its last quarterly results. Microsoft does not reveal the quarterly sales figures for this unit.
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