Key Highlights

● Reddit beat estimates but guided fourth-quarter Revenue below the $1.05 billion consensus.

● Roblox guided fourth-quarter revenue below consensus amid softer user and engagement metrics.

● Twilio fell after hours despite beating estimates and raising its full-year outlook.

● Pinterest missed on Earnings and revenue and guided EBITDA below consensus.

Three internet names reported after Thursday's close and all three were knocked sharply lower in extended trading, each for its own reason.

A brutal evening for growth stocks

After a regular session dominated by Alphabet (NASDAQ:GOOGL)'s historic drop, Thursday evening delivered a second wave of pain for technology investors. Reddit (NYSE:RDDT), Roblox (NYSE:RBLX) and Twilio (NYSE:TWLO) each fell sharply in after-hours trading following their quarterly reports, with market data showing steep declines for all three.

The timing compounded the gloom. Amazon (NASDAQ:AMZN) and Intel (NASDAQ:INTC) also slid after the bell, and Nasdaq-100 futures fell, according to market data. Yet the three stories were not identical, and the differences matter.

Reddit: a beat with a soft guide

Reddit's quarter, on its own, looked strong. Revenue of $895 million beat the $874.9 million estimate and grew strongly from a year earlier. Adjusted earnings of $1.40 a share topped the $1.33 forecast.

The issue was the outlook. Reddit guided to fourth-quarter revenue of $1.00 billion to $1.03 billion, short of the $1.05 billion consensus. For a stock valued on rapid growth, that gap was enough to trigger a steep sell-off.

Roblox: engagement in question

Roblox's report raised different concerns. The gaming platform's loss of $0.32 a share was narrower than the $0.43 expected, and revenue reached $1.70 billion. But its fourth-quarter revenue guide of $1.89 billion to $2.00 billion had a midpoint of about $1.945 billion, below the $2.017 billion consensus.

One data source pointed to declining user and engagement metrics, which go to the heart of Roblox's Business model. Another source had the stock near $43.84 after hours. The shares had already slipped modestly during the regular session.

Twilio: a raise that still sold off

Twilio's decline was the most puzzling on its face. The communications software company posted adjusted earnings of $1.65 a share, well above the $1.47 estimate, on revenue of $1.56 billion. It also raised its full-year revenue growth outlook.

One source attributed the drop to profit-taking after a multi-quarter rally, while another cited a weak fourth-quarter growth outlook. Either way, it showed that even a raise cannot protect a stock when expectations run high.

Pinterest joined the slide

The selling extended to Pinterest (NYSE:PINS). Its earnings of $0.46 a share missed the $0.49 forecast, revenue of $1.17 billion fell short of $1.21 billion, and its fourth-quarter adjusted EBITDA guide of $538 million to $588 million trailed the $605.6 million consensus. The shares fell sharply after hours.

A market grading on the future

These moves came at the end of a session that rewarded caution. The Nasdaq Composite fell 365.13 points to 26,184.72 and the S&P 500 slipped 23.59 points to 7,720.39. The software ETF IGV sank as ServiceNow (NYSE:NOW) and Fortinet (NASDAQ:FTNT) tumbled on soft forward guidance.

Investors had plenty of alternatives. Health care led the S&P 500, the Russell 2000 gained 28.71 points to 2,859.22, and more than 400 S&P 500 members rose. One market strategist noted, "There's plenty of other places to go with your money outside of the AI trade that have pretty decent prospects."

In that environment, Growth Stocks that guided below expectations had little support. Reddit and Roblox fell on guidance; Twilio fell despite raising its outlook. The common thread is that growth names are being judged on what comes next.

What to watch

Friday's regular session will reveal whether the after-hours declines hold. Extended trading is often thin, and moves can shrink or widen once full Volume returns.

For Roblox, the key metric will be user engagement and whether the declines flagged by data sources prove temporary. For Reddit, investors will watch whether the fourth-quarter guide proves conservative. For Twilio, the question is whether Friday's buyers see a pullback after a long rally as an opportunity. Analysts' rating changes and price target revisions, likely to arrive quickly, will offer the next clues.