Reddit's Q2 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise

Core Insights - Reddit (RDDT) reported Q2 2025 earnings of 45 cents per share, exceeding the Zacks Consensus Estimate by 25 cents, and reversing a loss of 6 cents per share from the previous year [1][8] - Revenues reached $499.63 million, surpassing the Zacks Consensus Estimate by 16.9% and showing a year-over-year increase of 77.9% [1][8] - RDDT shares rose 14.07% in pre-market trading to $183.8 following the strong earnings report [1] Revenue Breakdown - U.S. revenues, accounting for 82% of total revenues, increased by 79.4% year over year to $409 million [2] - International revenues, making up 18% of total revenues, grew by 71.7% year over year to $91 million [2] - Advertising revenues surged 84% year over year to $465 million, while Other revenues rose 24% year over year to $35 million [2] User Engagement Metrics - Daily Active Uniques (DAUq) increased by 21% year over year to 110.4 million [3] - U.S. DAUq rose 11% year over year to 50.3 million, while International DAUq grew 32% to 60.1 million [3] - Weekly Active Uniques (WAUq) climbed 22% year over year to 416.4 million [3] Average Revenue Per User - Average revenue per unique (ARPU) increased by 47% year over year to $4.53 [4] - U.S. ARPU rose 59% to $7.87, while International ARPU increased by 40% to $1.73 [4] Operating Expenses - Non-GAAP sales and marketing expenses grew by 68.8% year over year to $120.6 million [5] - Research and development expenses increased by 37.7% year over year to $196.6 million [5] - General and administrative expenses rose slightly by 0.4% year over year to $68.8 million [5] Financial Position - As of June 30, 2025, Reddit had cash and cash equivalents of $2.06 billion, up from $1.95 billion as of March 31, 2025 [6] - The company generated $111 million in cash from operating activities during the second quarter [6] - Free cash flow for the quarter was reported at $111 million, compared to $126.6 million in the previous quarter [6] Q3 Guidance - For Q3 2025, RDDT expects revenues between $535 million and $545 million, indicating a 35.61% year-over-year increase [7] - The Zacks Consensus Estimate for Q3 revenues is $472.41 million [7] - Adjusted EBITDA is anticipated to be between $185 million and $195 million for the third quarter [9]