Reddit (RDDT) stock soared more than 15% before the bell on Friday after the social media platform reported second quarter revenue that surpassed Wall Street's expectations.

The social media's revenue grew 78% to $500 million, its fastest revenue growth in three years, according to the company. That figure was ahead of the $425 million projected by Wall Street analysts tracked by Bloomberg.

In its results released late Thursday, Reddit also reported adjusted earnings per share of $0.92, ahead of the estimated $0.72.

The company said global daily active users hit 110.4 million in the three months ended June 30, just above the 110 million expected by analysts, according to Bloomberg consensus data. Meanwhile, US daily active users hit 50.3 million, slightly below the 50.5 million expected.

Investors had been closely watching for changes to Reddit's daily active users since shifts in the Google (GOOG) Search algorithm created volatility in traffic to the site, especially for users in the US.

CEO Steve Huffman said in a call with analysts following the firm's earnings report, "Traffic from Google varies from week to week, but overall it was a headwind in Q2."

He added that Reddit saw “ better traction” in attracting US users to the site “ as the quarter played out.”

Reddit also highlighted growing interest in its AI-powered search tool, Reddit Answers, which launched in December 2024. The feature had 6 million weekly active users in the second quarter, a jump from 1 million in the prior period.

"Reddit is one of the few platforms positioned to become a true search destination," Huffman wrote in a letter to investors.

While the majority of Reddit’s revenue comes from marketers who pay to run ads on its platform, the company’s “other revenue,” a segment that includes data licensing deals, grew 24% year over year to $35 million. Reddit has inked deals to license users’ content on its site to train companies' AI models, including two separate agreements with Google and ChatGPT-maker OpenAI that are each worth $60 million.

Huffman, in his letter, pointed to data from Profound showing that Reddit is the No. 1 most cited domain for AI models as evidence that it's a crucial source of content for chatbots. The CEO added in the call with analysts that there is a “huge opportunity” for the company in the data licensing space.

Reddit's financial outlook for the third quarter also surpassed expectations. The company said it expects third quarter revenue to fall between $535 million and $545 million, ahead of Wall Street's estimate of $473 million, according to Bloomberg data. The platform expects adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) in the quarter to hit between $185 million and $195 million, above the projected $159.5 million.