Reddit, Inc. RDDT reported strong revenue and user growth in its better-than-expect Q1 report released Thursday. Executives offered more color and insight into future growth on the company’s earnings call with analysts.
Q1 Details: Reddit beat analysts’ expectations on the top and bottom lines with earnings of 13 cents per share and revenue of $392.36 million, which beat the analyst consensus estimate of $370.01.
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DAUs: The social platform also saw user growth of 31% year-over-year with 108.1 million daily active uniques.
Reddit CEO Steve Huffman said on the earnings call that Reddit had 400 million weekly active uniques in Q1, but does expect growth to be “bumpy” in the near term due to changes in Google’s search ecosystem. Huffman added that DAU growth for April averaged in the high teens.
However, the CEO expressed optimism for growth over the longer term.
“We believe we’re in great shape over the medium and longer term. Look, ultimately, we drive growth when we make improvements to the product, which is where our focus is. So things like onboarding, search, machine translation, they all drive growth over the long term,” Huffman told analysts.
Revenue: Reddit’s ad revenue increased 61% year-over-year to $358.6 million, and other revenue increased 66% year-over-year to $33.7 million in the first quarter.
CFO Drew Vollero said on the earnings call that strength in ad impressions was the primary revenue driver, along with growth across various verticals and international markets.
“Additionally, the increase in ad pricing from our investments in performance and targeting contributed to higher returns for advertisers,” Vollero added.
Guidance: The CFO guided second-quarter revenue in the range of $410 million to $430 million, representing growth of 46% to 53% year-over-year.
“We are confident in our ability to deliver strong growth in Q2 and beyond, given the positive momentum and investments we’re making across product and sales,” Vollero said.
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