Financial Performance - Daily Active Uniques (DAUq) reached 110.4 million for the three months ended June 30, 2025, representing a 21% year-over-year increase [101]. - Average Revenue Per Unique (ARPU) was $4.53 for the three months ended June 30, 2025, an increase of 47% year-over-year [101]. - Revenue for the three months ended June 30, 2025, was $499.6 million, reflecting a 78% year-over-year growth [101]. - Net income for the three months ended June 30, 2025, was $89.3 million, a significant recovery from a net loss of $(10.1) million in the prior year [101]. - Adjusted EBITDA was $166.7 million for the three months ended June 30, 2025, compared to $39.5 million in the same period of 2024 [101]. - Free Cash Flow for the three months ended June 30, 2025, was $110.8 million, up from $27.2 million in the prior year [101]. - Revenue for Q2 2025 reached $499.6 million, a 78% increase from $281.2 million in Q2 2024 [129]. - Net income for Q2 2025 was $89.3 million, compared to a net loss of $10.1 million in Q2 2024, representing a $99.4 million improvement [129]. - Adjusted EBITDA for Q2 2025 was $166.7 million, up from $39.5 million in Q2 2024, indicating a significant increase of $127.2 million [129]. - Free Cash Flow for Q2 2025 was $110.8 million, compared to $27.2 million in Q2 2024, reflecting an increase of $83.6 million [128]. - In the six months ended June 30, 2025, total revenue was $892.0 million, a 70% increase compared to $524.1 million in the same period of 2024 [116]. Cost and Expenses - Research and development expenses for Q2 2025 totaled $196.6 million, up from $142.8 million in Q2 2024, marking a $53.8 million increase [140]. - Sales and marketing expenses for Q2 2025 were $120.6 million, compared to $71.5 million in Q2 2024, an increase of $49.1 million [140]. - General and administrative expenses for Q2 2025 were $68.8 million, slightly up from $68.5 million in Q2 2024 [140]. - Cost of revenue for Q2 2025 was $45.9 million, compared to $29.5 million in Q2 2024, an increase of $16.4 million [140]. - The company reported a total of $431.9 million in costs and expenses for Q2 2025, up from $312.2 million in Q2 2024 [140]. - Cost of revenue for the three months ended June 30, 2025 increased by $16.4 million, or 56%, and for the six months by $25.9 million, or 45%, due to increased hosting usage and advertising measurement services [144]. - Research and development expenses for the three months ended June 30, 2025 increased by $53.8 million, or 38%, but decreased by $191.9 million, or 33%, for the six months, primarily due to stock-based compensation adjustments [145]. - Sales and marketing expenses for the three months ended June 30, 2025 increased by $49.2 million, or 69%, and for the six months by $15.8 million, or 8%, driven by higher employee-related costs and marketing expenses [146]. - General and administrative expenses decreased by $173.8 million, or 56%, for the six months ended June 30, 2025, primarily due to prior year stock-based compensation adjustments [148]. Cash and Securities - Cash, cash equivalents, and marketable securities totaled $2.1 billion as of June 30, 2025 [101]. - As of June 30, 2025, the company had $2.1 billion in cash, cash equivalents, and marketable securities, with approximately 2% held outside the United States [152]. - Cash and cash equivalents increased to $734.1 million as of June 30, 2025, compared to $562.1 million as of December 31, 2024 [169]. - Marketable securities remained stable at $1.3 billion as of June 30, 2025, consistent with the previous reporting period [169]. Operating Activities - Net cash provided by operating activities was $238.9 million in the six months ended June 30, 2025, primarily from net income of $115.5 million and adjustments for non-cash items [158]. - Net cash provided by operating activities increased to $238.9 million for the six months ended June 30, 2025, compared to $60.4 million in the same period of 2024, reflecting a significant improvement in operational efficiency [159]. - Free Cash Flow reached $237.4 million for the six months ended June 30, 2025, up from $56.4 million in the prior year, driven primarily by an increase in net income [163]. Financing Activities - Net cash used in investing activities was $(29.6) million for the six months ended June 30, 2025, primarily due to additional purchases of marketable securities totaling $1.1 billion, partially offset by maturities and proceeds from sales of $1.0 billion [161]. - Net cash used in financing activities was $(37.4) million for the six months ended June 30, 2025, mainly due to cash payments for taxes related to net share settlement of restricted stock units amounting to $51.9 million [162]. Other Information - The effective tax rate for the company may vary based on the proportion of foreign to domestic income and changes in tax laws [138]. - The company completed its IPO in March 2024, resulting in net proceeds of $600.0 million after underwriting discounts [151]. - The Revolving Credit Facility available balance was $744.8 million as of June 30, 2025, with $5.2 million issued as letters of credit [153]. - The company did not have any off-balance sheet financing arrangements or relationships with unconsolidated entities during the periods presented [164]. - There were no material changes to contractual obligations and commitments related to third-party cloud infrastructure agreements during the six months ended June 30, 2025 [165]. - 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 [170]. - The majority of revenue and operating expenses were denominated in U.S. dollars, minimizing foreign currency risk exposure [170].
Reddit(RDDT) - 2025 Q2 - Quarterly Report