Reddit’s Wild Ride: From Profit Boom to User Growth Struggles

How the Front Page of the Internet is Navigating Wall Street’s Chaos.

Reddit’s IPO was one of the most talked-about market events of 2024. The platform that fueled GameStop’s meme stock frenzy and shaped internet culture finally went public, giving investors a chance to own a piece of the “front page of the internet.” But since its Wall Street debut, the stock has been anything but predictable.

With a mix of explosive revenue growth, AI-driven business moves, and some unexpected user growth setbacks, Reddit is proving to be both a powerhouse and a puzzle for investors.

Blowout Earnings, But a Reality Check on Users

Let’s start with the good news—Reddit’s latest earnings were a slam dunk. The company posted a staggering 71% revenue increase year-over-year, hitting $427.7 million. Ad revenue alone climbed 60% to $394.5 million, showing that Reddit’s efforts to monetize its user base are paying off.

Even better? The company flipped to profitability, reporting a net income of $71 million, or 36 cents per share, crushing analyst estimates of 25 cents. For a company that once struggled with monetization, this was a massive milestone.

But Wall Street doesn’t just care about revenue—it wants to see user growth. And that’s where Reddit stumbled.