Reuters Reddit said it could post an adjusted profit in the second quarter thanks to its booming advertising business and contentlicensing deals with AI companies, impressing investors who sent its shares soaring 16 in extended trading on Tuesday.

The earnings report the first since Reddit went public in March also included a revenue forecast for the current quarter that was above Wall Street estimates, as more people flock to the social media platform behind 202139;s memestock frenzy.

It was a strong start to the year and a milestone quarter for Reddit, CEO and cofounder Steve Huffman said.

The company39;s daily active unique visitors jumped 37, to 82.7 million in the first quarter ended March 31, while its average revenue per user increased by 8.

That helped it post a 48 jump in revenue to 243 million, which was far above Wall Street expectations of 212.8 million, according to LSEG data. Its loss of 8.19 per share was also smaller than expectations for a loss of 8.71 per share.

The results follow strong earnings from rivals including Snap and fan optimism that marketers are ramping up spending this year, after an ad market slump in 2023 caused by sticky inflation and an uncertain economic outlook.

Reddit is also trying to diversify revenue by licensing its usergenerated content for the training of datahungry AI models. It signed a deal with Google earlier this year that is worth about 60 million annually.

Reddit has cultivated a diverse and loyal audience…