Reddit Inc. RDDT experienced a significant boost in its stock value, rising by 21.56% in pre-market trading on Wednesday, as per Benzinga Pro. This increase came after the company released its third-quarter financial results, which surpassed analyst expectations.
What Happened: Reddit reported earnings of 16 cents per share, outperforming the anticipated loss of 8 cents. The company’s revenue reached $348.4 million, exceeding the consensus estimate of $311.42 million.
Reddit’s net income was $29.9 million, a notable improvement from a net loss of $7.4 million in the prior year. Adjusted EBITDA was $94.1 million, compared to a loss of $6.9 million previously.
Why It Matters: Most of Reddit’s revenue stemmed from advertising, totaling $315.1 million. Additional income of $33.2 million was generated through data licensing deals, with Google’s parent Alphabet Inc. GOOGL GOOGand OpenAI utilizing Reddit’s content for AI model training.
Reddit’s recent financial success is closely linked to strategic partnerships and revenue diversification efforts. Earlier this year, Reddit entered a content licensing agreement with Google, valued at $60 million annually. This deal allows Google to use Reddit’s content for AI model training, providing a new revenue stream for Reddit.
Additionally, Reddit has formed a partnership with OpenAI, which enhances its AI capabilities and offers new features to Reddit users. This collaboration allows OpenAI to access Reddit’s Data API, improving the understanding and display of Reddit content.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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