Reddit’s traffic was volatile in the latter part of the June quarter, but the bigger picture for the company remains unchanged, CEO Steve Huffman said.

  • Retail sentiment for RDDT turned ‘extremely bullish,’ with traders pointing to continuing strength in financial performance.
  • Reddit’s revenue in the second quarter rose 61% to $805 million, beating expectations.
  • The traffic warning pushed RDDT 10% lower in overnight trading.

Reddit shares fell 10% in overnight trading ahead of Friday despite reporting strong quarterly results and issuing an upbeat forecast, as investors focused on the company’s warning about “volatile traffic” as a key risk to the business.

“Search referrals were choppy in the quarter, and traffic was more volatile later in the quarter, but the bigger picture is unchanged: the commercial business is strong, our revenue growth is differentiated, and we have much to be encouraged by on the product side,” CEO Steve Huffman said in the shareholder letter release alongside the company’s financial results.

RDDT was among the top five trending tickers on Stocktwits early Friday, with retail sentiment for the stock shifting to ‘extremely bullish’ from ‘neutral’ the previous day.

“$RDDT Will be adding significantly. They exceed expectations for each earnings. Top 10 most visited websites in the world. C'mon,” a trader said.

Another wrote: “Wall St hates this stock for whatever reason. They just continue QoQ to destroy earnings, buy back stock and exceed guidance but can’t get any love. It’s wild.”

Reddit’s Q2 Update

Reddit’s revenue in the second quarter rose 61% to $805 million, beating expectations of $730 million. Profit climbed to $1.25 per share, compared to expectations of $0.95 per share.

Reddit’s daily active users increased 18% year over year and 2.8% sequentially to 130.3 million. DAU for the U.S. region declined 0.6% sequentially.

The company expects third-quarter revenue to be between $860 million and $870 million, sharply above analysts’ expectation of $828 million. Adjusted earnings this quarter will be between $385 million and $395 million, also topping Wall Street projections of $368 million.

Reddit has emerged as a key stock on investors’ radars. Over the past years, Reddit has rolled out a range of AI-powered tools for advertisers that helped lift revenue, while partnerships with Google and OpenAI are pushing Reddit content into chatbots and driving additional traffic to the site.

Reddit shares are still recovering from a sharp slide in January, and remain 23% lower year to date.

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