Investing.com -- Reddit Inc (NYSE: RDDT) shares rose 3.9% in after-hours trading on Thursday after the social media company reported a significant revenue beat for the first quarter. While diluted earnings per share of $1.01 trailed the analyst estimate of $1.11, investors focused on the company’s 69% year-over-year top-line growth.

Total revenue reached $663 million, far exceeding the consensus expectation of $609.8 million as advertising demand accelerated. The platform's daily active unique users (DAUq) grew to 126.8 million, representing a 17% increase year-over-year and a 4% sequential rise from the 121.4 million reported in the previous quarter.

Chief Executive Steve Huffman credited the platform's unique community structure for the accelerating financial performance and operational efficiency. “Reddit is a one-of-one business powered by deeply engaged communities and authentic human conversation,” said Huffman in a statement accompanying the release.

Management maintains that the combination of user growth and high gross margins, which hit 91.5%, positions the firm for long-term scalability. Huffman further noted that the company's foundation provides “a unique advantage in the age of AI.”

Profitability metrics showed substantial improvement, with adjusted EBITDA rising 131% to $266 million during the first quarter. Free cash flow also demonstrated significant strength, reaching $311 million compared to $127 million in the same period last year.

The company provided optimistic guidance for the second quarter, projecting revenue between $715 million and $725 million. This outlook surpassed Wall Street expectations at the $720 million midpoint, signaling that the momentum in user monetization is likely to persist.

Average revenue per user increased 44% globally to $5.23, driven by a significant 54% jump in the critical U.S. market. The growth in "logged-out" users, which rose 26% globally, indicates that the platform is successfully capturing broader search and discovery traffic.

The platform's expansion was particularly strong in international markets, where daily user counts jumped 26% compared to the prior year. Huffman concluded that the current trajectory is “driving a rare combination of growth, profitability, and efficiency.”