The San Francisco, California-based company last month launched two new AI-powered ad features designed to help brands drive engagement by tapping into user conversations on the platform. Reddit expects third-quarter revenue of $535 million to $545 million, well above analysts’ average estimate of $473 million, according to data compiled by LSEG.

Reddit's shares jumped 15% before the bell on Friday after it reported quarterly results that exceeded Street expectations, boosting investor confidence in the platform's AI-based advertising tools and strong user engagement.

Reddit's latest earnings report has electrified Wall Street. The social media platform's shares leapt more than 14% after it unveiled a 78% year-on-year revenue surge to roughly $500 million (£378.22 million) and earnings per share of $0.