(Bloomberg) -- Reddit Inc. shares surged more than 40% on Wednesday after the company’s results and forecast beat analysts’ expectations, marking its biggest intraday rally since the day after its initial public offering.

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The social network operator, which went public in March, reported sales of $348.4 million for the three months ended September, surpassing the average $312.8 million estimate. Reddit was also profitable on a GAAP basis for the first time since going public in March, Chief Executive Officer Steve Huffman said in an interview.

Reddit’s shares had already more than doubled in value this year before its report on Tuesday. The stock rose as much as 42% to $116.39 on Wednesday, reaching a record high.

The company has been investing in advertising technology to help it better monetize its large audience, an investment that is showing signs of paying off in its latest report. Reddit also projected sales for the holiday quarter between $385 million and $400 million, beating analysts’ projections of $356 million.

“Our hypothesis of Reddit, which is that every company’s customers are on Reddit somewhere, plays out,” said Huffman. “We’ve been more successful in helping businesses be on Reddit, find their customers on Reddit and land their messaging.”

Reddit went public nearly two decades after the forum-based site was founded. Since the spring, the social media platform has been investing heavily in its ads business as it seeks to better compete with rivals Meta Platforms Inc. and Alphabet Inc.’s Google. It has so far launched several new ad formats, including shopping and video ads, and it has signed content partnerships with major sports leagues that in turn could help draw advertisers.

Reddit is also striking deals with artificial intelligence companies as a way to diversify its business beyond advertising. The company has data-licensing agreements with Google, OpenAI and other AI developers, who use the site’s data for training large language models. In January, Reddit signed licensing deals worth $203 million in total, covering the next several years.

Huffman said the company will continue to have more conversations with potential licensing partners, but did not name specific companies.