The question rang around the Internet not long ago: “What the fuck did I just find in my bathroom?”
He the query arrived along with a photo of a truly original insect, and the responses quickly followed.
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“We call him Spricket…Spider Cricket,” one person said.
“Camel Cricket. It's scary because they jump at you but they're harmless,” was another response.
“I hate these things with a passion,” said another contributor. “Harmless? Count my nightmares!”
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All of this buggy behavior was happening on the social media site Reddit. (RDDT) which surpassed Wall Street's third-quarter earnings expectations on October 29.
The San Francisco company's shares soared 42% at last check and have more than doubled (up 137.5%) so far this year.
Founded in 2005, Reddit allows registered users to submit content such as links, text posts, images and videos, which are upvoted or downvoted by other members.
Posts are organized by topic on user-created boards called “communities” or “subreddits.”
“I'm excited to share that the third quarter was a historic quarter for Reddit,” co-founder and CEO Steven Huffman told analysts during the company's earnings call. “Our third quarter revenue grew 68% year over year, and I'm proud to announce that we also achieved GAAP profitability.”
Reddit CEO: 'influence continues to grow'
Huffman said Reddit averaged more than 97 million daily active unique users, up 47% from a year ago, and that the site surpassed 100 million DAUq for the first time during the quarter, “which has been a long-standing milestone.” dates for us.”
“Reddit's influence continues to grow on the Internet as a whole,” Huffman said. “In 2024, so far, the word 'Reddit' was the sixth most searched word on Google in the United States, underscoring that when people look for answers, advice, or community, they search for Reddit specifically.”
He said Reddit saw this in real time. When the White House turned to the site to share critical information during the recent hurricanes, they “used our Reddit Pro tools to identify the right communities to reach people affected by these events.”
“In fact, thousands of companies are using Reddit Pro, including” Major League Baseball and the National Football League, he added.
For the quarter, Reddit earned 16 cents per share, down from a loss of 13 cents a year earlier and beating the Wall Street consensus of a loss of 7 cents per share.
Revenue was $348.4 million, up from $207.5 million a year earlier and beating analysts' forecast of $312.8 million.
Average international daily users grew 44% year over year, led by 53% growth in Reddit's focus markets, notably France, India and the Philippines.
“This year we started using ai to translate Reddit's corpus into other languages, making it more accessible for non-English speakers to enjoy in their native languages,” Harmon said.
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Machine translation, which uses artificial intelligence to translate text or speech from one language to another, generated four times as many users as it did last quarter, Harmon said. And “based on the success we've seen so far, we plan to expand machine translation to more than 30 countries by 2025.”
Reddit estimated fourth-quarter revenue between $385 million and $400 million, beating analysts' average estimate of $357.9 million. Fourth-quarter adjusted earnings will range from $110 million to $125 million, above the average estimate of $85.2 million.
“What is there to say?” Stephen Guilfoyle of TheStreet Pro wrote on October 30. “The quarter was excellent. Forecasts are solid. Cash flows are better than healthy. The balance sheet is beyond outstanding.”
The veteran analyst, whose career dates back to the 1980s on the New York Stock Exchange, said that “Reddit is probably a good stock to invest in, but for now it is a bad stock to trade on the long side.”
The analyst quotes 'Dr. The story of Jekyll and Mr. Hyde'
Bernstein analysts saw a classic story with the Reddit results, specifically Dr. Jekyll and Mr. Hyde.
The investment firm raised its price target on Reddit to $85 from $65 and maintained an underperform rating on the stock after the earnings report, according to The Fly.
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The firm said the clouds around Reddit “have quickly cleared and become a true story of Dr. Jekyll and Mr. Hyde.”
Reddit began trading on the New York Stock Exchange on March 21 and Bernstein said that before the IPO, Reddit felt stagnant, unable to grow users or monetize the platform or seen as a real business: This is Mr. .Hyde.
Reddit reached an agreement with Google (GOOGLE) allowing the search engine giant to use posts from the site to train its artificial intelligence models and improve services.
After the IPO, the investment firm said, Reddit suddenly looks like an ai winner, growing ad revenue at an unprecedented pace and hitting years-long profitability targets in months.
This is Dr. Jekyll, Bernstein said, and right now, Dr. Jekyll is in charge.
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Loop Capital raised its price target on Reddit to $120 from $90 and affirmed a Buy rating on the stock.
In this quarter, Reddit reported an even bigger lead in its beat-and-raise than in its first full quarter as a public company, and surprisingly, GAAP earnings were positive in the period, the investment firm said. The rise was driven by a 56% increase in advertising.
Reddit is still in the early stages of driving user growth and expanding monetization, Loop Capital said.
Citi analyst Ronald Josey raised the company's price target on Reddit to $120 from $70 and maintained a buy rating on the stock.
The company reported “impressive” results in the third quarter, with revenue 11% above consensus and Ebitda 57% above the upper limit of guidance, Josey said.
Underscoring the results is Reddit's continued user growth and engagement gains. Daily active users increased 47% year over year, led in part by increased conversations on the platform as well as its global machine translation initiatives, the analyst said.
Josey said the trends could continue as new ad units are launched and incremental surfaces, such as search, video and shopping, are monetized as Reddit's operating leverage continues.
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