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Reddit shares soared as much as 14% on Wednesday after the social media firm posted unexpectedly strong revenue growth and improving profitability in the first earnings report since its market debut.

The social media company surprised Wall Street late on Tuesday with a forecast that it could post an adjusted profit in the second quarter, and its revenue outlook was also far above estimates.

The projections followed better-than-expected results for the first three months of 2024 — Reddit’s first earnings report since making its public debut in March at the top of its targeted range of $31 to $34, which gave the company a valuation of about $6.4 billion by the end of the trading day.

Reddit’s revenue for the first quarter rang in at $243 million — blowing past the $212.8 million expected by LSEG and a whopping 48% increase from the $163.7 million it raked in a year earlier.

Some $222.7 million of the sum was from ad revenue alone, according to Reddit. The figure was up 39% year-over-year — a faster rate of growth than the company’s top competitors, CNBC earlier reported.

Meta’s ad revenue, for reference, 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. Stock-based compensation expenses and related taxes were $595.5 million, primarily driven by charges due to the initial public offering.

“We suspected that Reddit would come out strong out of the gates, and Reddit exceeded our bullish expectations,” Bernstein analyst Mark Shmulik said in a client note.

“Reddit appears to be reaping the benefits of a strong digital ad market, buoyed by some ‘free’ IPO marketing, alongside increased traffic courtesy of their new favorite AI partner Google.”

Looking to the second quarter, Reddit said it expects revenue to be somewhere between $240 million to $255 million, topping the $224 million expected by analysts, according to LSEG.

The midpoint of the guidance range suggests growth of about 32% for the second quarter, up from $183 million from a year earlier, CNBC reported.

Several analysts have said that despite being founded in 2005, Reddit was still in early stages of the process to generate ad revenue and should benefit in the coming quarters from expanded ad targeting and measurement tools, among others.

The company’s more than 100,000 discussion forums, or subreddits, filled with user-generated content topics ranging from history to gaming have made it an attractive partner for companies looking to train their data-hungry AI models.

Reddit, whose valuation is still much smaller than rivals such as Meta ($1.19 trillion), was on track to increase its market capitalization by more than $1 billion to upwards of $9 billion based on its premarket share price of $56.97.

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At the time of writing, in premarket trading, Reddit’s share price sat at $54.89, marking a more than 11% increase from the previous trading day.

At least seven analysts raised their price target on Reddit’s stock, pushing the median view to $55, according to LSEG data. The company priced its much-awaited initial public offering at $34 in March.

Reddit remains in early days of developing its ads business, Piper Sandler analysts said, adding that a large international user opportunity remains untapped.

With Post wires

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Sports

Ohtani delivers first walk-off hit as a Dodger

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Ohtani delivers first walk-off hit as a Dodger

LOS ANGELES — Shohei Ohtani delivered his second major league walk-off hit, a two-out single in the 10th inning that sent the Los Angeles Dodgers to a 3-2 victory over the Cincinnati Reds on Sunday.

Andy Pages hit an early two-run homer for the Dodgers, who have won 20 of 26 after taking three of four from Cincinnati.

Pinch-hitter Will Smith drew a one-out walk in the 10th from Alexis Diaz (1-3), who got Mookie Betts to fly out before Ohtani stroked a single to right, scoring Jason Heyward. Ohtani’s latest feat set off a loud celebration for another huge weekend crowd at Dodger Stadium.

His only other walk-off hit in Major League Baseball was an 11th-inning single for the Los Angeles Angels in a 6-5 win over Houston on Sept. 4, 2020.

It was Ohtani’s 21st multi-hit game this season, the most in MLB. He is hitting .393 this month, the third-highest batting average in MLB among hitters with at least 20 at-bats in May (Kevin Pillar .447, Vladimir Guerrero Jr. .407).

Stuart Fairchild had two hits for the Reds, who have lost 15 of 18. Cincinnati also has lost seven consecutive series.

Anthony Banda (1-0) got three straight outs in the 10th in his debut with the Dodgers, who acquired the reliever from Cleveland on Friday. Banda’s win was his first since May 28, 2022, with Pittsburgh. He has pitched for the Blue Jays, Yankees, Nationals and Dodgers — and played in Cleveland’s minor league system — since leaving the Pirates less than two years ago.

Cincinnati reliever Emilio Pagan left abruptly with two outs in the ninth and a 2-1 count on Heyward. Pagan recorded two outs before throwing three straight fastballs to Heyward and then departing with a possible shoulder injury.

Diaz struck out Heyward to force extra innings.

Hunter Greene struck out eight while pitching four-hit ball into the seventh inning for Cincinnati in his second career start in his hometown. The hard-throwing right-hander got youth coaching at Compton’s Major League Baseball Urban Youth Academy and played high school ball in Sherman Oaks before the Reds made him the second overall pick in 2017.

Landon Knack yielded one run on three hits over the first 4⅔ innings for the Dodgers in his fourth major league appearance. Knack made three starts in April, and he got recalled from Triple-A Oklahoma City for this spot start apparently so the Dodgers could give a full week of rest to Yoshinobu Yamamoto.

Freddie Freeman singled in the fourth before Pages put a poor slider into the short porch down the left-field line for the fifth homer of his rookie season.

Cincinnati had been shut out for 16 consecutive innings at Chavez Ravine before it scored on back-to-back doubles to left in the fifth by Fairchild and Santiago Espinal, whose catchable drive fooled Teoscar Hernandez.

Cincinnati tied it in the seventh when pinch-hitter Spencer Steer — a Long Beach native in an 0-for-16 slump — drew a bases-loaded walk on nine pitches from Alex Vesia, who escaped the jam.

ESPN Stats & Information and The Associated Press contributed to this report.

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Rangers’ Garcia scratched with forearm soreness

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Rangers' Garcia scratched with forearm soreness

ARLINGTON, Texas — Rangers slugger Adolis Garcia was scratched from the starting lineup Sunday and got an MRI on his right forearm, a day after a collision in the outfield with second baseman Marcus Semien while both All-Star players went after a popup.

Manager Bruce Bochy said the plan had been for García, their primary right fielder, to be the designated hitter in the series finale against the Los Angeles Angels.

“The right forearm area took a pretty good shot there from Marcus, so he’ll get checked out,” Bochy said before the game. “We’ll have an MRI done, see where we’re at. My guess is, I’m hoping anyway, after the day off, he’ll be good to go.”

Bochy, without elaborating, said after their 4-1 loss that the MRI looked good.

The Rangers have a day off Monday before a three-game series at Philadelphia.

Semien was running out and García was coming in on Taylor Ward‘s popup to shallow right field in the sixth inning. Semien collided into García who had pulled up and gone down to a knee to get the ball after it dropped to the ground. Semien took a hard tumble, though both players stayed in and finished the Rangers’ 3-2 win in 13 innings.

García, the American League Championship Series MVP last year, hit his 11th homer of the season in the bottom of the sixth inning to tie the game at 1-1. He is hitting .251 and his 35 RBIs ranked fourth in the American League this season.

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Brixham: People remain scared to drink tap water as things slowly return to normal after parasite disease outbreak

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Brixham: People remain scared to drink tap water as things slowly return to normal after parasite disease outbreak

“I’m never drinking tap water again,” Kayley Lewis says.

“My symptoms have made me lose a stone in two weeks.”

Ms Lewis and her two children have been suffering from diarrhoea, vomiting and stomach cramps for over a fortnight – since South West Water found small traces of the parasite cryptosporidium in the Hillhead reservoir.

“I can’t trust them [South West Water] again.

“I might start using tap water for dishes… but definitely never to drink. Ever.

“I’ve been completely put off now… especially because of how poorly it makes you feel.

“I just don’t think I could ever try and risk going back to that.”

Pic: PA
Image:
A bottled water collection point in Devon. Pic: PA

At least 46 people are confirmed to have the disease, while as many as 70 other cases of diarrhoea and vomiting are also under investigation, the UK Health Security Agency (UKHSA) has said.

South West Water (SWW) has repeatedly apologised – telling Sky News today that they are working “around the clock” to get all households back to using safe water again.

This could be as early as this Wednesday, drought and resilience director at SWW David Harris told me.

“We’re looking at somewhere between mid to late next week before we’ll be in a position to be able to responsibly lift that boil water notice.”

David Harris said it could be a couple of weeks before the boil water notice
Image:
David Harris said it could be a couple of weeks before the boil water notice is lifted

So far, 14,500 households in the Alston supply area can drink their tap water without boiling it first – as advised by SWW.

However, some 2,500 homes in Hillhead, upper parts of Brixham and Kingswear have been told to continue boiling – and cooling – their water supplies before drinking it.

Steve Price, who runs the Station Guest House B&B near Brixham, said he lost a couple of thousand pounds in bookings due to – understandably – paranoid customers.

“Losses we anticipate are roughly around £2000 from people that have cancelled and directly stated that the cancellation was due to the water situation.

“So we would anticipate that at the bare minimum as compensation.”

Read more
Contamination ‘shouldn’t have happened’, SWW boss says
Water firm apologises after parasite detected in reservoir
Parasite outbreak has ‘destroyed’ business, residents say

Kayley Lewis has been drinking bottled water since the disease outbreak
Image:
Kayley Lewis has been drinking bottled water since the disease outbreak

Mr Price has spent the afternoon emptying the B&B’s water tanks in order to minimise the risk to his guests.

“In terms of money – we’re just flushing it away!

“A couple of hundred pounds worth. But this supply feeds the showers, sinks and bathrooms.

“It needs to be completely emptied and cleaned to avoid risks”.

Mr Price’s business isn’t the only one suffering.

It’s a bleak picture across the neighbouring towns.

This time of year Brixham is usually buzzing with holidaymakers – especially by the harbour side.

The past week, however, has been another story.

“It’s a ghost town”, Sally Tollon, an employee at a local chippy tells me.

“We’re really quiet… you can see it’s empty, because people are frightened to come down because of the water situation.

“On average we make a thousand pounds a day. Yesterday we did half of that.”

Sally Tollon's says the fish and chip shop where she works is losing money
Image:
Sally Tollon says the fish and chip shop where she works is losing money

Despite things slowly getting back to normal, people are scared.

They have lost faith and trust in a water supply – one woman told me – they had “always taken for granted”.

It’s clear rebuilding the community’s trust and confidence in their water supplier will take some time in the coming weeks and months.

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