Feb 13- Reddit shares plunged more than 15% on Wednesday following its fourth?quarter earnings report that revealed a miss in user growth despite strong revenue performance. The platform reported global daily active uniques (DAUq) rising 39% year?over?year to 101.7 millionjust below analyst expectations of 103.1 million. Revenue reached $428 million, beating the $405 million forecast, while earnings per share came in at 36 cents versus an expected 25 cents. CEO Steve Huffman attributed the shortfall in user numbers partly to a recent Google algorithm change that disrupted search referrals for logged?out users in the United States. Huffman noted that such algorithm adjustments occur semiannually and have triggered similar fluctuations in the past. He added that search-related traffic recovered in the first quarter, offsetting much of the earlier dip.
The company also recorded a 71% surge in sales and nearly quadrupled its net income to $71 million. Reddit's report follows robust quarterly results from tech giants, including Google (GOOG, Financial), Meta (META, Financial), Microsoft (MSFT, Financial), as well as Amazon (AMZN, Financial), Pinterest (PINS, Financial), and Snap (SNAP, Financial). The company provided optimistic guidance, projecting first?quarter sales between $360 million and $370 million. Investors weigh potential impacts of future search updates.
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