Core Insights - Reddit (RDDT) reported fourth-quarter 2025 earnings of $1.24 per share, exceeding the Zacks Consensus Estimate by 29.30%, compared to earnings of 36 cents per share in the same quarter last year [1] - Revenues reached $725.6 million, surpassing the Zacks Consensus Estimate by 8.71%, and reflecting a year-over-year increase of 69.7% [1] - RDDT shares rose 7.60% in pre-market trading following the strong quarterly results [1] Revenue Breakdown - U.S. revenues, which account for 80% of total revenues, increased by 67.8% year over year to $583.3 million [2] - International revenues, making up 20% of total revenues, surged 77.9% year over year to $142.3 million [2] - Advertising revenues grew by 75% year over year to $690 million, while Other revenues rose by 8% year over year to $36 million [2] User Engagement Metrics - Daily Active Uniques (DAUq) increased by 19% year over year to 121.4 million, with U.S. DAUq up 9% to 52.5 million and International DAUq up 28% to 68.9 million [3] - Weekly Active Uniques (WAUq) rose by 24% year over year to 471.6 million, with U.S. WAUq increasing by 12% to 193.4 million and International WAUq climbing 34% to 278.2 million [3] Average Revenue Metrics - Average revenue per unique (ARPU) increased by 42% year over year to $5.98, with U.S. ARPU rising by 53% to $10.79 and International ARPU climbing by 38% to $2.31 [4] Operating Performance - Reddit reported a GAAP gross margin of 91.9%, a decrease of 70 basis points year over year [5] - Sales and marketing expenses surged by 103.5% year over year to $163.9 million, while research and development expenses rose by 5.4% to $198.9 million; General and Administrative expenses decreased by 2% to $72.3 million [5] Financial Metrics - Adjusted EBITDA for the fourth quarter was $327 million, up from $154.3 million in the same quarter last year, with an adjusted EBITDA margin of 45.1% [6] - As of December 31, 2025, Reddit had cash and cash equivalents of $2.47 billion, up from $2.22 billion as of September 30, 2025 [7] - The company generated $269 million in cash from operating activities in the fourth quarter, compared to $185 million in the previous quarter, and reported free cash flow of $263.6 million, up from $183 million in the previous quarter [7] Q1 2026 Guidance - For the first quarter of 2026, Reddit expects revenues between $595 million and $605 million and adjusted EBITDA between $210 million and $220 million [10]
Reddit Q4 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise