Core Insights - Reddit shares fell over 6% after the company reported user growth that did not meet Wall Street expectations for the fourth quarter, with daily active uniques rising 39% year-over-year to 101.7 million, below the estimate of 103.1 million [1] User Growth and Traffic - CEO Steve Huffman indicated that Reddit faced "volatility" in user growth due to a change in Google's search algorithm, which primarily affected logged-out users visiting the site without an account [2] - The search-related traffic has shown recovery into the first quarter following the algorithm change [2] - Huffman noted that fluctuations in search referrals are not unusual and mainly impact logged-out users, emphasizing the company's ability to adapt to algorithm updates effectively [3]

CHONGQING, CHINA - FEBRUARY 9: In this photo illustration, the Reddit logo is displayed on a ... [+] smartphone screen in front of a stock chart showcasing Reddit's financial performance, social media industry trends, online community growth, and global digital engagement on February 9, 2025, in Chongqing, China. (Photo illustration by Cheng Xin/Getty Images)Getty ImagesReddit (NYSE: RDDT) recently announced its Q4 earnings, reporting a profit of $0.36 per share on revenue of $428 million. This exceeded mar ...

Core Insights - Reddit Inc reported better-than-expected fourth-quarter financial results, with revenue of $427.71 million, surpassing the consensus estimate of $405.26 million, and earnings of 36 cents per share, exceeding analyst estimates of 25 cents per share [1][2] Financial Performance - Fourth-quarter revenue: $427.71 million, beating estimates by $22.45 million [1] - Fourth-quarter earnings per share: 36 cents, exceeding estimates by 11 cents [1] - First-quarter revenue guidance: expected to be between $360 million and $370 million, slightly above estimates of $358.08 million [2] - First-quarter adjusted EBITDA forecast: between $80 million and $90 million [2] Market Reaction - Reddit shares increased by 1.3%, closing at $216.47 following the earnings announcement [3] Analyst Ratings and Price Targets - Morgan Stanley analyst Brian Nowak maintained an Overweight rating and raised the price target from $200 to $210 [4] - Baird analyst Colin Sebastian maintained a Neutral rating and raised the price target from $160 to $185 [4] - Needham analyst Laura Martin maintained a Buy rating and raised the price target from $190 to $220 [4] - B of A Securities analyst Justin Post maintained a Neutral rating and raised the price target from $180 to $190 [4]

Reddit, Inc. (NYSE:RDDT) Q4 2024 Earnings Conference Call February 12, 2025 5:00 PM ET Company Participants Jesse Rose - Head of Investor Relations Steven Huffman - Co-Founder & Chief Executive Officer Jennifer Wong - Chief Operating Officer Andrew Vollero - Chief Financial Officer Conference Call Participants Ronald Josey - Citigroup Justin Post - Bank of America Benjamin Black - Deutsche Bank Brian Nowak - Morgan Stanley Richard Greenfield - LightShed Ken Gawrelski - Wells Fargo Eric Sheridan - Goldman Sa ...

Reddit CEO Steve Huffman said the site saw "volatility" in traffic in Q4 due to Google's algorithm change.The impact shows how some users still rely on an external search engine to get answers from Reddit.Reddit saw 39% user growth between 2023 and 2024.Reddit's stock dropped more than 15% after hours on Wednesday after the company reported user growth below analyst expectations in its fourth-quarter earnings. The site averaged 101.7 million daily active unique users in the fourth quarter, a 39% year-over-y ...

User Engagement and Growth - The company has experienced a decline in daily active uniques (DAUq), which is critical for its business performance and revenue generation [79]. - The growth rate of DAUq has decreased post-COVID-19 pandemic, indicating potential challenges in sustaining user engagement [80]. - Logged-out users accounted for 55% of global DAUq in the three months ended December 31, 2024, which typically results in lower monetization rates compared to logged-in users [80]. - A significant portion of content on the platform is contributed by a small number of users, and a decline in their engagement could adversely affect overall user activity [84]. - The company is actively working to improve the accuracy of its DAUq metric, which may be overstated due to the presence of false, spam, and bot accounts [126]. - The DAUq metric is calculated based on internal company data, but challenges in accurately counting logged-out traffic may affect its reliability [125]. - Historical DAUq metrics may not be directly comparable due to inconsistencies in data received from third-party services like Google's AMP framework [127]. Revenue Generation and Advertising - The company generates a majority of its revenue from advertising, making it vulnerable to fluctuations in advertiser interest and spending [70]. - Approximately 91% and 98% of the company's revenue was generated from third-party advertising for the years ended December 31, 2024 and 2023, respectively, with the top ten largest customers accounting for about 25% and 26% of revenue [101]. - The company is in the early stages of monetizing its business and expanding its advertising revenue model, with no assurance of success in generating increased revenue [94]. - The company must attract new advertisers and encourage existing ones to increase their advertising spend to sustain or increase advertising revenue [95]. - The effectiveness of the company's advertising tools is critical for attracting and retaining advertisers, as competitors may have more developed measurement capabilities [116]. - The company is investing in new ad formats, such as video ads, which may lead to decreased user engagement and revenue [104]. - The company faces intense competition for advertising spend and must effectively serve advertisements that meet advertiser objectives while maintaining user experience [101]. Financial Performance and Losses - The company incurred net losses of $(484.3) million, $(90.8) million, and $(158.6) million for the years ended December 31, 2024, 2023, and 2022, respectively, with an accumulated deficit of $(1.2) billion as of December 31, 2024 [91]. - The company expects costs and expenses to increase in future periods due to significant investments in user base expansion, new product development, and marketing efforts [91]. - The company has experienced negative publicity due to API policy changes in May and June 2023, which may harm its brand and reputation [88]. - The company has incurred substantial losses historically, which may limit the ability to utilize net operating loss carryforwards due to provisions in the Internal Revenue Code [212]. Competition and Market Position - The company faces intense competition from larger platforms with greater financial resources, which could impact user retention and growth [82]. - The company is exploring international expansion and content licensing opportunities, but faces risks associated with these new markets [71]. - The company is exploring new revenue streams, including earnings programs for contributors and content licensing opportunities, but faces challenges in evaluating their viability [99]. - The company faces risks related to content moderation, including potential reputational harm and difficulty in identifying inappropriate content [107]. Data Privacy and Security - The company anticipates ongoing challenges related to data privacy and security, which could impact user trust and engagement [72]. - Cybersecurity risks are heightened due to remote work and potential attacks from third parties, which could lead to data breaches and harm the company's reputation [157]. - The company has experienced data security incidents, including unauthorized access to sensitive information, which could result in significant legal and financial exposure [155]. - The company faces challenges in maintaining data security due to evolving threats and the sophistication of cybercriminals, which could impact user trust and business operations [160]. - The reliance on third-party service providers for data processing increases vulnerability to data breaches, which could have adverse consequences for the company [156]. - The company is investing in privacy, safety, security, and content review efforts to combat misuse of services and user data by third parties [161]. Intellectual Property and Regulatory Risks - The company may face challenges in protecting its intellectual property rights, which could harm its competitive position [169]. - There is no assurance that trademark and patent applications will result in registered rights, impacting the company's ability to protect its technology [170]. - The company faces risks related to intellectual property infringement, which could lead to significant legal expenses and impact its competitive position [174]. - Regulatory complexities regarding content and consumer protection laws may increase compliance costs and expose the company to additional liabilities [179]. - The company is exploring new business initiatives involving machine learning, AI, and blockchain technology, which are subject to evolving regulations that could impact operations [186]. Organizational Structure and Governance - The company reported a significant increase in full-time employees, growing from 2,013 as of December 31, 2023, to 2,233 as of December 31, 2024, indicating a 10.9% increase in headcount [143]. - Attracting and retaining high-quality personnel is critical, with competition for skilled employees being intense; failure to do so could harm operational results [146]. - The company relies heavily on its senior management team, particularly the CEO, and the loss of key employees could disrupt operations and adversely affect business performance [148]. - The corporate culture is seen as a key contributor to success; failure to maintain this culture during growth could negatively impact innovation and teamwork [150]. Financial Structure and Capital Requirements - The company entered into a five-year, $750.0 million revolving credit facility in October 2021 to fund working capital and general corporate purposes [218]. - Future acquisitions may disrupt the business and may not achieve the intended goals, potentially harming financial condition and results of operations [221]. - The company may require additional capital to support business growth, which might not be available on favorable terms [220]. - The company is subject to regulatory scrutiny if it fails to maintain effective internal controls over financial reporting, which could adversely affect investor confidence and market price [215]. Market and Stock Performance - The market price of the company's Class A common stock may be volatile and influenced by factors beyond its control, including fluctuations in user growth and engagement [223]. - The multi-class structure of the common stock may limit stockholders' ability to influence corporate matters, including mergers and acquisitions [229]. - The company faces potential dilution from future sales or issuances of common stock, which could negatively impact the market price [237]. - The governance agreement grants significant control to the principal stockholder, Advance, including the right to designate directors [234].

Reddit (RDDT) reported fourth-quarter earnings that topped analysts' estimates, but its user growth fell short, sending shares lower in extended trading Wednesday. The social media platform saw revenue grow 71% year-over-year to $427.7 million, topping the analyst consensus compiled by Visible Alpha. Net income came in at $71 million, up from $18.5 million a year ago and above expectations. However, Reddit’s 101.7 million daily active users in the period fell short of the 103.24 million analysts were looki ...

Daily Active Uniques ("DAUq") increased 39% year-over-year to 101.7 million Fourth Quarter Revenue grew 71% year-over-year to $427.7 million Gross margin reached 92.6% for the fourth quarter and 90.5% for the full year Fourth Quarter Net income of $71.0 million, 16.6% of revenue. Diluted EPS of $0.36 Fourth Quarter Adjusted EBITDA of $154.3 million, 36.1% of revenue 1 Fourth Quarter Operating cash flow of $90.0 million. Fully diluted shares of 206.2 million, down sequentially SAN FRANCISCO, Calif. – Februar ...

Reddit Inc RDDT is set to report its fourth-quarter earnings on Wednesday. Wall Street expects 25 cents in EPS and $405.26 million in revenues as the company reports after market hours.The stock is up 331.23% over the past year, 31.1% year-to-date.Reddit’s Rally Faces A Musk-Sized Distraction Ahead Of Q4 EarningsAs Reddit gears up for its fourth-quarter earnings, tensions with billionaire Elon Musk are escalating. Musk accuses Reddit of enabling threats against his employees (Musk owns, or co-owns, Tesla, S ...

Key TakeawaysReddit is set to report fourth-quarter earnings after the market closes Wednesday.Analysts expect rising revenue and users for Reddit compared with a year ago.The stock has soared nearly sevenfold from its IPO price in March 2024. Reddit (RDDT) is set to report fourth-quarter earnings after the market closes Wednesday, with analysts expecting growing revenue and users. The social media company is expected to report revenue of $408.92 million, up 64% year-over-year, and earnings of $47.6 million ...