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    • What you need to know ahead of Tuesday’s Reddit earnings
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    What you need to know ahead of Tuesday’s Reddit earnings

    Online Niel Posted on

    Key value

    • Reddit will report earnings after the market close on Tuesday, with analysts expecting higher revenue but a bigger net loss than in the same period last year.
    • Shares have surged since Reddit went public in March, with shares doubling from their offering price.
    • Analysts expect international growth and AI-related data licensing deals to provide avenues for growth in both daily users and revenue in the coming quarters.

    Reddit (RDDT) is set to report earnings after the bell on Tuesday, with analysts expecting a rise in revenue but a slightly larger net loss than it posted in the same period last year before the social media company went public.

    Analysts are expected income to rise to $311.5 million for the third quarter, up from $207.5 million a year ago and $281.2 million in the second quarter. Reddit is also expected to report $18.1 million net loss for the quarter, more than double the $7.4 million it lost a year ago.

    Reddit shares have risen since their March trading debut, and analysts continue to hold bullish ratings on the stock, with seven out of nine analysts tracked by Visible Alpha with “buy” ratings.and two others with “pending” ratings. However, the average the target price for the social media platform is $76.22, below Reddit’s Thursday close above $78.

    Analyst estimates for Q3 2024 Q2 2024 Q3 2023
    Income $311.46 million USD 281.18 million $207.51 million
    Earnings per share (loss) (11 cents) (6 cents) (13 cents)
    Net income (loss) ($18.11 million) ($10.10 million) ($7.38 million)

    Key Value: User base, International growth

    Analysts at Jefferies and Deutsche Bank wrote ahead of Reddit’s earnings that international expansion is an important way for Reddit to grow its user base as the platform rolls out new language capabilities. France was one of Reddit’s top three fastest-growing markets in the second quarter as French translations became more widely available, Jefferies wrote, with the addition of languages ​​such as German and Spanish likely to boost growth.

    “With the full utility of the platform now unlocked to a larger percentage of the global population, we argue that increased content velocity is a likely outcome, which in turn could drive greater global engagement and attract over time ( daily active users)”. Analysts at Deutsche Bank wrote, raising their price target to $85 from $73.

    Attention businesses: AI licensing deals

    The third quarter will give Reddit its first full quarter since announcing a license agreement to give OpenAI’s ChatGPT access to its content for artificial intelligence (AI) training because it was only in effect for about half of the second trimester.

    Jefferies analysts said new licensing deals for its content could provide a big margin for revenue growth for Reddit, as it already has deals with OpenAI and Alphabet (GOOGLE) Google, two of the largest consumer-facing AI companies.

    Reddit shares rose more than 1% on Thursday to $78.60, more than twice the $34 at which it was priced at its IPO. at the beginning of this year.

    Online Niel
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