Core Insights - Reddit reported a significant revenue growth in 2025, surpassing $2.2 billion, which is a 69% increase year-over-year, with a net income of $530 million [3][7] - The fourth quarter of 2025 saw total revenue exceed $726 million, marking a 70% year-over-year increase, and net income reached $252 million [3][7] - The company emphasized its profitability with an adjusted EBITDA of $327 million, representing 45% of revenue, and free cash flow of $264 million, the first quarter surpassing $250 million [2][7] Revenue and User Metrics - Average revenue per user (ARPU) increased by 42% year-over-year to $5.98, with "other revenue" from content licensing at $36 million, up 8% [1][2] - Daily active users (DAUs) reached over 121 million, a 19% increase year-over-year, while weekly active users (WAUs) exceeded 471 million, up 24% [7][8] Advertising Performance - Q4 advertising revenue grew to $690 million, a 75% increase year-over-year, with active advertisers rising by over 75% [6][12] - The growth in advertising was broad-based across various objectives, channels, verticals, and regions, with significant improvements in lower-funnel performance metrics [12][19] Product Development and User Engagement - Reddit is focusing on enhancing user onboarding and search capabilities, with significant progress in integrating AI-powered features like Reddit Answers, which saw queries rise from approximately 1 million to 15 million [5][9] - The company plans to implement verified profiles for brands and individuals to maintain authenticity as AI-generated content becomes more prevalent [8] Capital Allocation and Financial Strategy - Reddit's board authorized a share repurchase program of up to $1 billion, reflecting the company's strong cash position of nearly $2.5 billion [18][20] - The company outlined its capital allocation priorities, including investing in core business growth, pursuing M&A opportunities, and share repurchases [20] Future Guidance - For Q1 2026, Reddit projects revenue between $595 million and $605 million, with an adjusted EBITDA of $210 million to $220 million, indicating a margin of about 36% [21]
Reddit Q4 Earnings Call Highlights