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].
Reddit(RDDT) - 2025 Q3 - Quarterly Report