Reddit Inc. ( RDDT ) experienced a significant boost in its stock value, rising by 21.56% in pre-market trading on Wednesday, as per Benzinga Pro. This increase came after the company released its third-quarter financial results, which surpassed analyst expectations.

What Happened: Reddit ( RDDT ) reported earnings of 16 cents per share, outperforming the anticipated loss of 8 cents. The company’s revenue reached $348.4 million, exceeding the consensus estimate of $311.42 million.

Reddit’s net income was $29.9 million, a notable improvement from a net loss of $7.4 million in the prior year. Adjusted EBITDA was $94.1 million, compared to a loss of $6.9 million previously.

Why It Matters: Most of Reddit’s revenue stemmed from advertising, totaling $315.1 million. Additional income of $33.2 million was generated through data licensing deals, with Google’s parent Alphabet Inc. ( GOOG ) and OpenAI utilizing Reddit’s content for AI model training.

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Reddit’s recent financial success is closely linked to strategic partnerships and revenue diversification efforts. Earlier this year, Reddit ( RDDT ) entered a content licensing agreement with Google ( GOOG ), valued at $60 million annually. This deal allows Google ( GOOG ) to use Reddit’s content for AI model training, providing a new revenue stream for Reddit ( RDDT ).

Additionally, Reddit ( RDDT ) has formed a partnership with OpenAI, which enhances its AI capabilities and offers new features to Reddit ( RDDT ) users. This collaboration allows OpenAI to access Reddit’s Data API, improving the understanding and display of Reddit ( RDDT ) content.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari