Core Insights - Reddit's stock has declined over 35% year to date despite strong revenue and profitability growth, with a notable fourth-quarter earnings report that did not translate into stock price gains [1] Revenue Growth - Reddit's revenue surged 70% year over year in Q4, reaching $726 million, exceeding analyst expectations of $665 million [2] - Advertising revenue increased by 75% to $690 million, while other revenue rose by 8% to $36 million, driven by higher impressions and pricing [3] User Engagement - Daily active users grew by 19% to 121.4 million, and weekly users increased by 24% to 471.6 million, surpassing analyst projections of 120 million daily active users [4] - Average revenue per user (ARPU) rose by 42% to $5.98 [4] Profitability - Adjusted EBITDA more than doubled from $154 million a year ago to $327 million [5] - Earnings per share (EPS) increased from $0.36 to $1.24, significantly exceeding the consensus estimate of $0.94 [5] Future Projections - For Q1, the company projects revenue between $595 million and $605 million, indicating a growth of 52% to 54% [6] - Adjusted EBITDA is forecasted to be between $210 million and $220 million, up from $115.3 million a year ago [6] - A $1 billion stock buyback program has been announced [6] Strategic Initiatives - The company is beginning to leverage AI tools to enhance user experience and improve search features, which may lead to increased ad opportunities [8] - The launch of Reddit Max campaigns aims to boost ad prices by improving conversions and lowering cost per action [9]
Down More Than 35% in 2026, Can Reddit Stock Rebound as Revenue Soars?