Reddit (RDDT) is wearing its new popularity well.

Shares of the social media platform exploded over 40% on Tuesday following the company's first-ever profitable quarter.

"I think we're hitting a kind of an era of mainstream for Reddit," Reddit co-founder and CEO Steve Huffman told Yahoo Finance (video above). "We finally made the product easy enough to use that we're hitting this tier of mainstream-ness."

Reddit's global daily active users increased 47% year over year to 97.2 million. Weekly global active unique users rose 53% from the prior year.

Total revenue improved 68% to $348.4 million due mostly to strength in advertising as clients grew more comfortable putting dollars toward the controversial site. Analysts had expected sales of $314 million. The company delivered adjusted operating profits of $94.1 million versus a $6.9 million loss a year ago.

Earnings per share of $0.16 marked a reversal from a $0.13 loss last year. The Street was modeling for a loss of $0.07.

For Reddit, the third quarter was another win for 2024.

Initially expected to price its IPO in the $31 to $34 per share range, the company ended up pricing at $34 in late March, giving it a $6.4 billion valuation. The targeted valuation on a fully diluted basis was less than the $10 billion it fetched in a 2021 funding round.

The stock began trading at $47 per share and quickly shot past $53.

Shares finished their first day of trading on March 21 at $50.44.

The stock currently trades at around $112. Reddit's market cap is now roughly $18.6 billion, according to Yahoo Finance data.

The company was the first major social media IPO since Pinterest (PINS) debuted in 2019.

Reddit's IPO came on the heels of a licensing deal with Google to use its data to train large language models. In May, Reddit entered a similar deal with OpenAI.

"We think Reddit has multiple avenues to drive impressions and pricing higher over time, which contributes to an impressive growth profile for advertising revenue. Reddit has an attractive call option from data licensing, which provides high-margin ancillary revenue," said Jefferies analyst John Colantuoni following the company's third quarter earnings release.

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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].