Reddit (RDDT) is ready to report third quarter earnings after the bell on Thursday as buyers look ahead to any indicators of a slowdown in its every day lively customers and updates about potential expansions of AI licensing offers.
Wall Road analysts tracked by Bloomberg mission the social media platform will report adjusted earnings per share of $1.07 for the interval, up greater than 80% from its EPS of $0.59 in the identical quarter final yr, when Reddit reported its first revenue since its IPO.
The corporate is anticipated to see income of $549 million for the interval, a 58% improve from $348 million within the year-ago interval, in line with Bloomberg consensus information.
For the September quarter, analysts estimate Reddit will report 114 million every day lively customers, in line with Bloomberg information. Whereas that will mark a 17% improve from the prior yr, it will additionally signify a continued deceleration in person progress — a sample that has involved some on Wall Road. Reddit has recorded 5 straight quarters of slowing progress in every day lively customers since its person figures jumped greater than 50% within the second quarter of 2024.
Promoting income is projected to have jumped 63% to $513 million within the third quarter.
Learn extra: Dwell protection of company earnings
A number of Wall Road analysts at companies together with Deutsche Financial institution, B Riley Securities, and Raymond James reiterated their Purchase scores on the inventory in notes to buyers this month.
Deutsche Financial institution analyst Benjamin Black stated Reddit’s efforts to draw customers — akin to selling the platform by means of advertisements on Fb — might assist enhance advert income this quarter.
“Whereas Google-related referral site visitors considerations stay, inner initiatives look like a spotlight, doubtlessly giving Reddit extra management of person progress,” he wrote in a word Tuesday, elevating his value goal on the inventory to $245 from $205.
Analysts are additionally looking ahead to any commentary about Reddit’s licensing offers with Google (GOOGL, GOOG) and OpenAI (OPAI.PVT). In mid-September, Reddit inventory soared after Bloomberg reported the corporate was trying to strike its subsequent information licensing settlement with Alphabet-owned Google and was set to debate a brand new pricing mannequin for that deal, in addition to its partnership with OpenAI. The brand new pricing phrases would permit Reddit to be paid extra, as its content material is used extra typically within the corporations’ AI solutions, Bloomberg wrote, citing unnamed executives.
However the inventory plummeted in early October as third-party information prompt Reddit citations in OpenAI’s ChatGPT had fallen in mid-September, elevating considerations about Reddit’s negotiating energy in its licensing take care of the AI developer.
