Copyright CNBC
Reddit reported third-quarter earnings on Thursday in which the company beat on the top and bottom, but the company saw its user growth for logged-in users slow down once again. Shares were down about 4% at the market's close. Here's how the company did compared with LSEG estimates: Earnings per share: 80 cents vs. 51 cents expected Revenue: $585 million vs. $546 million expected The company said global daily active uniques for the third quarter grew 19% year-over-year to 116 million, surpassing analyst estimates of 114 million. Reddit's logged-in DAUq for the U.S., its most lucrative region, rose 7% year-over-year to 23.1 million during the third quarter. That was slower than the 12% year-over-year jump Reddit recorded during the second quarter when logged-in DAUq for the U.S. was 22.9 million. The company's third-quarter global logged-in DAUq rose 14% year over year to 50.2 million, while its global logged-out DAUq jumped 24% to 65.8 million. Investors have been watching for any changes to Reddit's user growth amid Google increasingly debuting generative AI features like AI Overview, which provides summaries to search questions. Reddit has seen a wave of users come to its platform from Google, and the social media company makes more advertising-related money from users who create accounts. Reddit's sales jumped 68% year-over-year in the third quarter, while net income was $163 million, representing a 23% increase from the $133 million it logged the previous year during the same period. The company said it expects fourth-quarter sales to come in the range of $655 million to $665 million, ahead of the $638 million that Wall Street was expecting. Reddit said it expects its adjusted earnings in the fourth quarter to be between $275 million and $285 million, topping StreetAccount's projections of $259 million. The company said third-quarter global average revenue per user was $5.04, ahead of analyst estimates of $4.82. Third-quarter revenue in the U.S. came in at $480 million, surpassing StreetAccount estimates of $445 million. Reddit generated international third-quarter sales of $105 million, ahead of the $104 million that StreetAccount projected. Reddit's "Other revenue" category, which includes the company's data licensing business, rose 7% year-over-year to $36 million. Google and Meta both reported their third-quarter earnings on Wednesday in which both tech giants surpassed Wall Street expectations.
