(Bloomberg) – Reddit Inc. tells potential investors in its initial public offering that it expects revenue in 2024 to grow by more than 20% from the previous year, according to a person familiar with the situation.
The social media company gave guidance at a roadshow event that it was set for a similar revenue trajectory to what it saw last year, the person said. Revenue in 2023 grew to $804 million, according to its filing with the U.S. Securities and Exchange Commission. That is 20.5% above the previous year’s figure, shows data compiled by Bloomberg.
Reddit expects to break even this year on adjusted earnings before interest, taxes, depreciation and amortization, the person said. The company posted an adjusted Ebitda loss of $69.3 million for 2023, the filing shows.
Read More: Reddit’s Main Risk Is Dependence on Unpredictable Users
Separately, estimates from some of the signatories of the offer also see Reddit’s revenue increasing at similar rates to the company’s own projections, a different person said, asking not to be identified because the information is not public.
A Reddit representative declined to comment.
The figures are being discussed as part of the marketing to potential investors of the IPO, which could raise as much as $748 million for the company and a group of investors who are employees, according to the filing. Together they are selling 22 million shares in a price range of $31 to $34, the filing shows.
The projections would mark a continued turnaround for Reddit, which turned profitable in the fourth quarter last year, Bloomberg News reported. The company has ventured beyond ad revenue, its traditional source of revenue, allowing third parties including Alphabet Inc’s Google. license access to data on their platform for a fee. Reddit expects a minimum of $66.4 million in revenue this year from those deals, the filing shows.
Read More: Reddit Revenue Up 20% Ahead of IPO Even as Profits Remain Fragile
Analysts at investment banks that underwrite a company’s offering have a model for its growth and earnings power over the next few years, based on their own assumptions and research. Those numbers often play a role in shaping investors’ thinking about the company’s valuation in the offering, although underwriters are limited when they can publish the research, typically for about 25 days.
The IPO is led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., the filing shows. Reddit plans to have its shares trade on the New York Stock Exchange under the symbol RDDT.
More stories like this are available at bloomberg.com
©2024 Bloomberg LP
Unlock a world of Perks! From insightful newsletters to real-time stock tracking, breaking news and a personalized news feed – it’s all here, just a click away! Login Now!
Catch all Business News, Market News, News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More or less
Published: 14 Mar 2024, 03:33 IST