Reddit Investors Prepare for Q3 Results: Higher Revenue Expected, But Net Loss Could Widen – Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Reddit Inc RDDT is expected to report earnings after the market closes on Tuesday, and analysts are predicting a quarter-on-quarter increase in sales.

However, there are concerns about a possible widening of the company's net loss to $18.1 million. That's more than double the $7.4 million it lost a year ago.

Revenue is expected to rise to $311.5 million in the third quarter, up from $281.2 million in the second quarter.

Reddit in full swing: Reddit made its long-awaited entry into the public markets earlier this year as its first major initial public offering of 2024. After pricing the IPO at $34 per share, the stock began trading at $47 on March 21. Dollar. Since then, shares have risen over 77%.

Reddit's growth trajectory has been underpinned by:

• Increasing user engagement (e.g. the White House)
• Stronger advertising revenue: (positive results in 3 months. As of June 30, 2024, the company achieved a solid revenue growth rate of approximately 53.63%).
• Advances in AI: Alphabet Inc GOOG GOOGL inked a $60 million-a-year deal that gives Google real-time access to Reddit's data; Google, in turn, will have access to Reddit real-time data to train its artificial intelligence models.

What's the catch?: The San Francisco-based platform continues to face challenges on its path to profitability.

Higher operating costs, higher infrastructure investments and increasing content moderation efforts could weigh on the bottom line.

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What investors will pay attention to

According to Bloomberg, investors will be looking for guidance on future financial performance and operational updates, as well as the company's AI plans.

Expect analysts to comment on this, like Reddit's CEO Steve Huffman covers advances on a variety of topics, including:

Given competitive pressure from other social media platforms and regulatory scrutiny of user data, the earnings announcement could set the tone for Reddit's market prospects in 2025.

One of the most important points to consider is how the company plans to pursue a path to profitability in the long term.

Price action: Reddit shares were up 0.2% at last check on Monday, trading at around $81.57.

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