n
The actions of Reddit (DRDT) fell by more than 5% on Thursday after the results of mixed profits from the fourth quarter of the company posted Wednesday evening did not meet the high expectations of investors.
The profit diluted by Reddit share of $ 0.36 dropped estimates by analysts of $ 0.48. Reddit’s daily active users in the December quarter reached 101.7 million, up almost 40% compared to 2023, but less than 103.8 million expected.
The turnover of the fourth quarter of the social media platform increased by more than 70% of the previous year to $ 427.7 million, exceeding Wall Street forecasts of $ 405.5 million, According to Bloomberg consensus data.
The actions of the company initially dropped up to 18% after the results.
The CEO, Steve Huffman, said during an appeal with analysts on Wednesday evening that the traffic in the platform had known “a certain volatility” due to a change in the Google Search algorithm at the end of the Fourth trimester. Huffman said that “the traffic of [Google] Research has recovered so far in the first quarter and we have resumed momentum. “”
“We see Google’s volatility all the time, just like everyone else,” Huffman told analysts, “there is no concern on our part in this department.”
Huffman added that the disturbance affected “disconnected users” or those who have no reddit accounts. The CEO said the social media company is trying to convert these users into active account holders by rationalizing the registration process and improving their personalized home screens.
Reddit also improves its internal research tool powered by AI, Reddit responds, to attract users and encourage them to count on it instead of Google research.
Although the benefits of the fourth quarter of Reddit were mixed, his advice for the first quarter came before the projections of analysts.
The platform said it expects income between $ 360 million and $ 370 million in the first quarter of 2025, more than 359 million Wall Street analysts, followed by Bloomberg, had planned . Reddit provides that it will record the adjusted profits (before interest, taxes, damping and depreciation) of 80 to 90 million dollars, more than the $ 72 million expected by analysts.
Raymond James’ analyst Josh Beck called on Thursday’s withdrawal in Reddit shares a “purchasing opportunity”, highlighting Reddit’s “net” recovery in traffic after changes in the Google algorithm.
“Although the report has not erased our planned bar, we move away by the international increase, advertising progress and the early positive response of [Reddit] Answers that are probably combined with research to improve the search for the platform, “said Beck in a note to investors on Wednesday evening.
n
n
