Reddit (RDDT, Financials) shares declined 11.7% in premarket trading to $191.00 on Thursday, despite reporting strong fourth-quarter earnings growth.

While daily active unique users climbed 39% to 101.7 million, the social network business said fourth-quarter revenue increased 71% year over year to $427.7 million. Comprising most of Reddit's profits, advertising revenue increased 60% year over year to $394.5 million. Other income came in at $33.2 million for the period.

Up 62% from last year, Reddit's full-year income for 2024 came to $1.3 billion. From 88.4% a year ago, gross margin rose to 92.6% in the fourth quarter.

Comparatively to $18.5 million in net income in the previous year, the quarter's net incomeor $0.36 per diluted sharestood at $71.0 million. With a $131.2 million gain, Adjusted EBITDA shot to $154.3 million.

In the fourth quarter, operating cash flow jumped to $90.0 million, up $107.4 million year-over-year. With capital expenditures of $0.8 million, free cash flow came at $89.2 million.

Reddit reported a financial loss of $484.3 million for the whole year, a widening from a net loss of $90.8 million in 2023. Still, adjusted EBITDA for the year rose dramatically to $298.0 million, compared to a loss of $69.3 million in the previous year.

With adjusted EBITDA ranging from $80 million to $90 million, the business forecasts first-quarter 2025 sales between $360 million and $370 million looking forward.