Market Overview - Major U.S. index futures are showing positive movement, with Dow futures up 0.11%, S&P 500 futures up 0.72%, and Nasdaq futures up 1.25% [1] - Chinese concept stocks are experiencing a decline in pre-market trading, with Alibaba down 1.98%, Pinduoduo down 1.12%, JD.com down 1.23%, Ctrip down 0.67%, and Baidu down 0.67% [1] Company Developments - NVIDIA has reached an agreement with major South Korean companies, including Samsung Electronics and SK Group, to supply over 260,000 accelerated chips to support AI projects in Korea. NVIDIA shares rose by 1.8% following the announcement [1] - OpenAI, Oracle, and Related Digital announced plans to build a data center in Saline, Michigan, as part of the "Star Gate" project, which is expected to have a total capacity exceeding 8 gigawatts and an investment of over $450 billion over the next three years. Oracle shares increased by over 2% [1] - Pony.ai shares rose over 5% after the company received the first city-wide commercial autonomous driving ride-hailing operation license in Shenzhen [2] - Reddit's stock surged over 11% after reporting Q3 earnings that exceeded expectations, with revenue growing 68% year-over-year to $585 million and net profit increasing by 23% to $163 million. The company also raised its Q4 revenue forecast to between $655 million and $665 million, surpassing Wall Street's expectations [2] - SpaceX is expected to win a $2 billion satellite contract from the Pentagon, with plans to play a significant role in two additional Pentagon satellite networks [3] - Li Auto announced a recall of 11,411 units of its 2024 MEGA model due to regulatory requirements, leading to a 1.8% drop in its stock price [3] Fund Flows - Bank of America reported that gold funds experienced a record outflow of $7.5 billion in the week following a previous record inflow, marking the largest weekly outflow in history [2]

Core Insights - Reddit's stock surged nearly 13% in pre-market trading, reaching $219.5, following the release of its third-quarter earnings report which significantly exceeded expectations [1] - The company reported a year-over-year revenue increase of 68% to $585 million, with earnings per share of $0.80, surpassing the target of $0.51 [1] - Net profit for the quarter was $163 million, up 23% from $133 million in the same period last year [1] - Reddit raised its fourth-quarter revenue guidance to between $655 million and $665 million, well above Wall Street's forecast of $638 million [1] - The adjusted profit forecast for the fourth quarter is set at $275 million to $285 million, exceeding the previous estimate of $259 million [1] Financial Performance - Revenue for Q3 increased by 68% to $585 million [1] - Earnings per share reached $0.80, exceeding the expected $0.51 [1] - Net profit rose to $163 million, a 23% increase from the previous year's $133 million [1] Future Outlook - Fourth-quarter revenue is projected to be between $655 million and $665 million, higher than the $638 million forecast by analysts [1] - Adjusted profit expectations for Q4 are between $275 million and $285 million, surpassing the earlier prediction of $259 million [1]

Core Insights - Reddit Inc. is a prominent social media platform known for its user-generated content and community-driven discussions, distinguishing itself from competitors like Facebook and Twitter through its unique approach [1] Financial Performance - For the quarter ending October 30, 2025, Reddit reported an earnings per share (EPS) of $0.80, which was below the estimated EPS of $1.04 but showed a significant improvement from $0.16 per share reported in the same quarter last year [2][6] - Reddit's revenue for the quarter reached $585 million, surpassing the estimated $546.7 million, representing a 6.31% increase over the Zacks Consensus Estimate and a substantial rise from $348.35 million reported a year ago [3][6] Valuation Metrics - The company has a high valuation with a price-to-earnings (P/E) ratio of approximately 168.12 and a price-to-sales ratio of about 21.81, indicating that investors are willing to pay a premium for Reddit's growth potential [4][6] - The enterprise value to sales ratio stands at 21.39, reflecting the company's valuation including debt and excluding cash [4] Financial Health - Reddit's financial health is supported by a low debt-to-equity ratio of 0.01, indicating minimal reliance on debt financing, and a current ratio of 12.00, highlighting strong liquidity to cover short-term liabilities [5]

Core Viewpoint - Reddit's third-quarter performance exceeded market expectations, showcasing significant growth in revenue and user engagement [1] Financial Performance - Reddit reported a 68% year-over-year revenue increase to $585 million, surpassing market expectations of $550 million [1] - Earnings per share (EPS) reached $0.80, compared to $0.16 in the same period last year, also exceeding the expected $0.52 [1] - The average daily active user count grew by 19% year-over-year to 116 million, exceeding the anticipated 114 million [1] Future Outlook - For the fourth quarter, Reddit expects revenue to be between $655 million and $665 million, above the forecast of $638 million [1] - The company anticipates adjusted EBITDA to range from $275 million to $285 million [1]

Core Insights - Reddit has reported a strong financial performance with a 68% revenue growth and a 74% year-over-year increase in advertising revenue, indicating robust business execution and market demand [1][3][2] - The company maintains high gross margins of 91% and adjusted EBITDA margins of 40%, positioning itself as a highly efficient and profitable tech business [6][3] - There is significant potential for growth in both user base and advertising revenue, particularly in international markets where current traffic is 45% from the US and 55% from outside the US [23][16] Financial Performance - Reddit's revenue growth for the last quarter was reported at 68%, with advertising revenue increasing by 74% year-over-year [1][3] - The company has achieved gross margins of 91% and adjusted EBITDA margins of 40%, which are significantly higher than competitors in the publishing space [6][3] Advertising Strategy - Reddit's advertising model is described as a bargain for advertisers due to its targeted approach, which ensures that ads reach relevant audiences [4][2] - The company aims to grow its advertising inventory primarily by increasing user engagement rather than simply increasing ad load [13][14] Market Position and Growth Potential - Reddit is recognized as one of the most visited sites in the US, with 190 million Americans visiting weekly, indicating a strong user base [14] - The company sees substantial opportunities for growth in international markets, aiming to increase its global presence over the next decade [23][16] Community Engagement - Reddit's platform is characterized by its diverse communities, which provide users with support and connection across various life experiences, enhancing user engagement [21][20] - The company is focused on maintaining a balance between ad placements and user experience to avoid overwhelming users with advertisements [13][24]

Group 1 - Company has expressed concerns about data being used without permission by other firms, specifically mentioning anthropic and perplexity [1][2] - The company acknowledges the ongoing legal issues but emphasizes the importance of protecting its data for business and users [2][3] - There is a positive outlook on collaborations with major players like Google and OpenAI, highlighting the mutual benefits of utilizing Reddit's data [3]

Core Insights - Reddit Inc. reported a revenue of $584.91 million for the quarter ended September 2025, marking a 67.9% increase year-over-year and exceeding the Zacks Consensus Estimate by 6.31% [1] - The earnings per share (EPS) for the quarter was $0.80, significantly up from $0.16 in the same quarter last year, representing a surprise of 50.94% over the consensus estimate of $0.53 [1] Financial Performance Metrics - Daily Active Uniques (DAUq) globally reached 116 million, surpassing the average estimate of 113.88 million [4] - Average Revenue Per User (ARPU) globally was $5.04, exceeding the average estimate of $4.85 [4] - DAUq in the U.S. was 51.6 million, slightly below the average estimate of 51.8 million, while international DAUq was 64.4 million, above the estimate of 62.02 million [4] - U.S. ARPU was $9.04, higher than the estimated $8.52, while international ARPU was $1.84, exceeding the estimate of $1.70 [4] - Logged-out DAUq globally was 65.8 million, above the estimate of 63.25 million, with U.S. logged-out DAUq at 28.5 million, slightly above the estimate of 28.12 million [4] - Weekly Active Uniques (WAUq) globally reached 443.8 million, surpassing the estimate of 430.85 million [4] Revenue Breakdown - Revenue from the United States was $480 million, significantly above the average estimate of $444.44 million, reflecting a year-over-year increase of 66.7% [4] - International revenue was reported at $105 million, slightly below the average estimate of $106.64 million, but still showing a year-over-year increase of 73.8% [4] Stock Performance - Reddit Inc.'s shares have returned +4% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for further outperformance in the near term [3]

Core Insights - Reddit Inc. reported quarterly earnings of $0.8 per share, exceeding the Zacks Consensus Estimate of $0.53 per share, and showing significant growth from $0.16 per share a year ago, resulting in an earnings surprise of +50.94% [1] - The company achieved revenues of $584.91 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 6.31% and increasing from $348.35 million year-over-year [2] - Reddit Inc. has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +125%, with actual earnings of $0.45 per share compared to an expected $0.2 per share [1] - The current consensus EPS estimate for the upcoming quarter is $0.81, with projected revenues of $634.08 million, and for the current fiscal year, the EPS estimate is $1.88 on revenues of $2.06 billion [7] Stock Performance - Reddit Inc. shares have increased approximately 29% since the beginning of the year, outperforming the S&P 500's gain of 17.2% [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating expectations of continued outperformance in the near future [6] Industry Outlook - The Internet - Software industry, to which Reddit Inc. belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Revenue for Q3 2025 was $584.9 million, marking a 68% increase compared to the same period last year[102]. - Average Revenue Per Unique (ARPU) was $5.04 for Q3 2025, reflecting a 41% year-over-year increase[124]. - Net income for Q3 2025 was $162.7 million, significantly up from $29.9 million in Q3 2024[102]. - Adjusted EBITDA for Q3 2025 was $236.0 million, compared to $94.1 million in Q3 2024[102]. - Free Cash Flow for Q3 2025 was $183.1 million, up from $70.3 million in Q3 2024[102]. - Revenue for the three months ended September 30, 2025, was $584,911,000, representing a 68% increase from $348,351,000 in 2024[133]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $518,027,000, a significant increase of 374,350,000 compared to $143,677,000 in 2024[133]. - Net income for the nine months ended September 30, 2025, was $278,118,000, a substantial recovery from a net loss of $555,312,000 in 2024[133]. User Engagement - Daily Active Uniques (DAUq) reached 116.0 million for Q3 2025, a 19% increase year over year[102]. - Global DAUq grew 19% year over year, driven by a 31% increase in the rest of the world[110]. Expenses - Operating expenses for Q3 2025 were $393.9 million, compared to $306.9 million in Q3 2024[102]. - Research and development expenses for the three months ended September 30, 2025, were $196,379,000, compared to $166,701,000 in 2024, reflecting ongoing investment in product development[145]. - Sales and marketing expenses for the three months ended September 30, 2025, were $128,707,000, compared to $74,510,000 in 2024, highlighting increased investment in marketing efforts[145]. - Cost of revenue for the nine months ended September 30, 2025, was $135,498,000, an increase from $91,750,000 in 2024, indicating higher operational costs associated with revenue generation[145]. - Cost of revenue for the three months ended September 30, 2025, increased by $17.9 million, or 52%, primarily due to increased hosting usage to support user growth[149]. - Research and development expenses for the three months ended September 30, 2025, increased by $29.7 million, or 18%, driven by higher employee-related costs[150]. - Sales and marketing expenses for the three months ended September 30, 2025, increased by $54.2 million, or 73%, primarily due to increased marketing expenses[151]. - General and administrative expenses for the three months ended September 30, 2025, increased by $3.1 million, or 5%[153]. Cash Flow and Liquidity - Cash, cash equivalents, and marketable securities totaled $2.2 billion as of September 30, 2025[102]. - The company reported net cash provided by operating activities of $185,159,000 for the three months ended September 30, 2025, compared to $71,622,000 in 2024, showcasing improved operational efficiency[132]. - Net cash provided by operating activities was $424.1 million for the nine months ended September 30, 2025, compared to $132.1 million for the same period in 2024, reflecting a significant increase[165]. - Free Cash Flow increased to $420.5 million for the nine months ended September 30, 2025, from $126.7 million in the prior year, driven primarily by an increase in net income[170]. - The company had cash and cash equivalents of $911.7 million and marketable securities of $1.3 billion as of September 30, 2025, indicating strong liquidity[176]. - The available balance under the Revolving Credit Facility was $494.6 million as of September 30, 2025[160]. - The company believes its cash flows from operations and existing resources will be sufficient to meet its working capital needs for at least the next 12 months[163]. Investment and Financing Activities - Net cash used in investing activities was $(13.1) million for the nine months ended September 30, 2025, compared to $(397.6) million in 2024, indicating a substantial reduction in cash outflow[168]. - Net cash used in financing activities was $(61.5) million for the nine months ended September 30, 2025, compared to $380.2 million provided in 2024, primarily due to cash payments for taxes related to restricted stock units[169]. - The company made additional purchases of marketable securities totaling $1.6 billion during the nine months ended September 30, 2025[168]. Tax and Regulatory Matters - The company has maintained a full valuation allowance against its U.S. deferred tax assets, with a potential release expected within the next 18 months based on positive operating results[143]. - The company did not have any off-balance sheet financing arrangements or relationships with unconsolidated entities during the periods presented[171]. - The company has not entered into any foreign currency exchange contracts for hedging purposes, although it may consider doing so in the future as operations grow[177]. IPO and Market Position - The company completed its IPO in March 2024, resulting in net proceeds of $600.0 million[157].

Financial Data and Key Metrics Changes - Reddit reported total revenue of $585 million for Q3 2025, representing a 68% year-over-year increase [3][11][17] - The company achieved a net income of $163 million, with a net margin of 28%, an improvement of $133 million from the previous year [3][17][24] - Adjusted EBITDA margin reached 40%, marking the first time this profitability goal set at IPO was achieved [3][17][24] - Average revenue per user (ARPU) grew 41% year-over-year to $5.04 [19] Business Line Data and Key Metrics Changes - Advertising revenue grew 74% year-over-year to $549 million, driven by broad-based strength across objectives, verticals, and geographies [11][19] - Other revenue, including data licensing, reached $36 million, up 7% year-over-year [19] - The total active advertiser count expanded by over 75% year-over-year in Q3 [11] Market Data and Key Metrics Changes - Revenue growth in the U.S. was 67% year-over-year, while international revenue grew 74% [19] - The company reported 116 million daily active users (DAUQ) and 444.444 million weekly active users (WAUQ), both growing around 20% year-over-year [3] Company Strategy and Development Direction - Reddit's strategy focuses on enhancing user experience through product improvements, search capabilities, and international growth [5][8] - The company aims to grow app users by improving retention and diversifying traffic sources, including organic, paid, and publisher-driven [8] - Investments in advertising solutions and unique ad formats are intended to drive performance and efficiency for advertisers [12][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating environment, noting stability but low visibility due to external factors like tariffs [72] - For Q4 2025, revenue is estimated to be between $655 million and $665 million, representing 53% to 55% year-over-year growth [24] - The company aims for a North Star adjusted EBITDA margin of over 50% in the medium term [75] Other Important Information - Reddit is focusing on improving onboarding experiences to enhance user engagement and retention [27][50] - The company is investing in tools for moderators to help grow and strengthen communities [5][6] Q&A Session Summary Question 1: User growth trends and traffic diversification - Management noted that product initiatives, including machine translation, were significant contributors to user growth, with a focus on improving the first session user experience [31][32] Question 2: Revenue opportunity from Reddit Pro - Reddit Pro is seen as a way to bring value to the platform by increasing engagement and potentially converting that into revenue [36][38] Question 3: Marketing spend and user acquisition - The company is currently spending low to mid-single digits as a percentage of revenue on marketing, with a focus on quality user acquisition [40] Question 4: Engagement of users acquired through performance ads - Management highlighted that brand campaigns have led to increased app installs and awareness, providing a foundation for future performance [44][46] Question 5: Simplified onboarding flow results - Early results from the simplified onboarding flow are expected soon, with a focus on streamlining the user experience [50] Question 6: LLM licensing and data value - Management stated that relationships with LLM companies are healthy, focusing on mutual benefits and enhancing user experiences [53][66]