Reddit Stock Surges 5% on Strong Earnings and $1 Billion Buyback Announcement

Reddit shares jumped 5.3% in after-hours trading following a fourth-quarter earnings report that exceeded analyst expectations. The social media platform posted adjusted earnings of $1.24 per share, significantly higher than the anticipated 94 cents, with revenue reaching $726 million against forecasts of $666 million.

Advertising revenue grew 75% year-over-year to $690 million, driven by a 19% increase in daily active users, now totaling 121.4 million. International expansion, fueled by language translations, played a key role in user growth. The company also announced a $1 billion share repurchase program, underscoring its strong cash position of $2.48 billion.

Notably, Reddit's AI-related capital expenditures stood at just $3 million for the quarter—a fraction of what competitors are spending. This disciplined approach to cost management highlights the company's efficient growth strategy amid rising industry investments in artificial intelligence.