Reddit's earnings soar 16% on beat and better-than-expected forecast.

• Reddit reported third-quarter financial results that topped analyst estimates.
• The company's forecast for the fourth quarter was also better than expected.
• In August, Steve Huffman, the CEO of Reddit, informed CNBC that the company had simplified the process for new users to sign up for accounts.

On Tuesday, shares of the social media company increased by 16% in extended trading after its third-quarter results surpassed analyst expectations and it issued an optimistic outlook for the current period.

Here's how the company did compared to LSEG estimates:

• Earnings per share: 16 cents vs. a loss of 7 cents
• Revenue: $348.4 million vs. $312.8 million expected

Reddit expects fourth-quarter revenue to be between $385 million and $400 million, surpassing analyst estimates of $357.9 million. Meanwhile, the company anticipates adjusted earnings for the fourth quarter to be between $110 million and $125 million, exceeding the average estimate of $85.2 million.

In the third quarter, the company experienced a 68% increase in revenue from the previous year and became profitable, reporting a net income of $29.9 million, in contrast to a net loss of $7.4 million in the same quarter the previous year.

In the third quarter, the company's daily active users increased by 47% year-over-year to 97.2 million, surpassing analyst predictions of 96.5 million.

The third quarter's average revenue per user was $3.58, surpassing analyst predictions of $3.24.

"Reddit CEO Steve Huffman stated that the company had another successful quarter with significant milestones, including increased user traffic, revenue growth, and profitability. He emphasized that Reddit remains one of the most visited and trusted sites globally, with unique opportunities available to the company."

Since its IPO in March, Reddit has released three earnings reports. The stock's value has more than doubled since then, closing at $81.74 on Tuesday, giving the company a market cap of $13.6 billion.

Reddit has experienced an influx of new users due to Google search updates that boosted its content in search results. However, these new users, known as logged-out users, generate less advertising revenue for the company compared to logged-in users, who typically spend more time on the platform, as per Reddit's financial filings.

The number of global logged-out users increased by 70% to 53.1 million, while the number of global logged-in users grew by 27% to 44.1 million, according to the company.

In August, Huffman informed CNBC that the company has simplified the process for new users to create accounts and is enhancing its recommendation features to retain newcomers as long-term users. Additionally, he stated that Reddit's direct traffic remains robust and is not significantly impacted by any alterations in Google search results.

WATCH: Cramer revisits 2024's largest IPOs