(Reuters) -Reddit missed market estimates for daily active unique visitors in the fourth quarter on Wednesday, sending its shares down about 15% in extended trading.

Reddit stock, which debuted in March 2024, gained nearly five-fold last year.

The company forecast first-quarter revenue above Wall Street estimates on Wednesday, betting on its artificial intelligence content licensing deals and a robust digital advertising spend.

"Reddit shares are down in part due to Daily Active Users missing expectations, but it's not the best reason for anyone to lose faith in the company," said Jeremy Goldman, senior director of briefings at eMarketer.

Reddit has benefited from its conversation placement ads format, where brands can advertise directly into discussion threads within interest-based communities known as subreddits.

Its content licensing deals with Alphabet's Google and Microsoft-backed OpenAI have helped the company diversify its revenue streams.

The social media platform has been using AI to enhance its products and boost user engagement. It started testing Reddit Answers, an AI-powered feature that scours posts on the social media platform to answer users' queries.

The company expects first-quarter revenue of $360 million to $370 million, compared with analysts' average estimate of $358.1 million, according to data compiled by LSEG.

Reddit's daily active unique visitors rose 39% to 101.7 million in the fourth quarter ended December 31, missing estimates of 103.3 million.

Revenue rose 71% to $427.7 million during the fourth quarter, beating the average estimate of $405.3 million. Its global average revenue per user increased 23% to $4.21.