Reddit (RDDT) stock soared more than 40% to a record high of $117 on Wednesday after the social media company reaped its first-ever profit as a public company, and its third quarter revenue beat Wall Street’s expectations.

Reddit on Tuesday evening reported quarterly sales of $348 million — up 68% from last year and ahead of Wall Street’s forecast of $313 million. Reddit’s revenue guidance for the fourth quarter also topped estimates.

Although its adjusted earnings per share of $0.16 fell below the $0.20 expected by analysts, Reddit reported its first profit since its IPO of $30 million. The company reported a net loss of $10 million in prior quarter and $7.4 million in the year-ago period.

Reddit had twice achieved profitability before going public during the fourth quarters of 2021 and 2023, according to a March regulatory filing.

Meanwhile, the platform’s user traffic hit an all time high, with daily active users jumping nearly 50% to more than 97 million.

The nearly 20-year-old company of which OpenAI's Sam Altman is a major investor, began trading in March in one of 2024’s hottest IPOs. Its stock surge Wednesday brought the value of Altman's stake in the company as high as $1.4 billion (Altman owned about $12.2 million shares, according to Feb. 21 filing to the Securities and Exchange Commission).

Reddit’s results were driven by ad sales growth, with third quarter ad revenue up 56% from last year. The platform’s AI licensing deals with Google (GOOG) and OpenAI — worth tens of billions of dollars, at least — have also boosted its bottom line, and CEO Steve Huffman said in a call with investors Wednesday that Reddit is "talking to folks" about potential new AI deals.

Analysts from Deutsche Bank (DB), Bank of America (BAC), JPMorgan (JPM), and Jefferies (JEF) lifted their price targets for Reddit stock to as high as $120 following its earnings report.

Jefferies analysts said in a note Wednesday: “RDDT delivered a 4th straight acceleration in Advertising Revenue growth, underscoring a nascent monetization opportunity and supporting our outlook for attractive growth even if user growth slows.”

Ad revenue growth also lifted fellow social media platform Snap (SNAP), which saw its stock jump roughly 15% after the company’s earnings beat expectations Tuesday.

CEO Evan Spiegel said direct advertisers on the platform more than doubled from last year in the third quarter, speaking in a call with investors late Tuesday. The company reported adjusted earnings per share of $0.08 compared to the $0.05 expected and a quarterly revenue of $1.37 billion versus the $1.36 billion forecasted by Wall Street analysts tracked by Bloomberg.