Reddit has forecasted second-quarter revenue between $410 million and $430 million, exceeding Wall Street's average estimate of $395.5 million. This optimistic outlook is driven by a significant increase in digital advertising spend on the platform, with a reported 61% revenue growth to $392.4 million in the first quarter. The company has also seen a 50% increase in active advertisers, indicating strong demand for its unique ad formats that integrate directly into user discussions.

Despite the positive revenue forecast, CEO Steve Huffman acknowledged potential disruptions from Google's search algorithm changes, which previously impacted Reddit's traffic. The company experienced volatility in user engagement due to Google's focus on AI-generated content. This reliance on Google raises concerns about the sustainability of Reddit's growth, especially as it competes with larger platforms like Meta and TikTok for advertising dollars.