Reddit Inc. (RDDT) shares plummeted 13.84% in the pre-market session on Thursday, despite reporting robust financial results for the fourth quarter of 2024. The social media platform's stock opened at $160.00, erasing a significant portion of its year-to-date gains, after the company's user growth metrics fell short of analysts' expectations.

For the quarter ended December 31, 2024, Reddit reported revenue of $427.7 million, representing a 71% year-over-year increase and surpassing Wall Street's expectations. However, the company's daily active uniques (DAUq) grew 39% year-over-year to 101.7 million, missing analysts' average projection of 103.8 million.

Reddit attributed the slower user growth to changes in Google's search algorithm, which impacted the platform's traffic from search engines. According to the company, Google has accounted for as much as 50% of Reddit's traffic in a single day, making the social media site susceptible to changes in Google's search engine.

Despite the user growth miss, Reddit's financial performance remained strong. The company reported net income of $71 million, compared to $18.5 million in the year-ago period, and an Adjusted EBITDA of $154.3 million, with an Adjusted EBITDA margin of 36.1%.

Looking ahead, Reddit provided a relatively conservative outlook for the first quarter of 2025, forecasting revenue in the range of $360 million to $370 million and Adjusted EBITDA between $80 million and $90 million. This guidance, combined with the user growth miss, likely contributed to the stock's sharp decline in the pre-market session.