Core Viewpoint - Reddit (RDDT) is expected to report first-quarter 2025 results with projected revenues between $360 million and $370 million, indicating a year-over-year growth of 48% to 52% [1]. Revenue and Earnings Expectations - The Zacks Consensus Estimate for first-quarter revenues is $372.09 million, reflecting a year-over-year increase of 53.15% [1]. - The consensus estimate for earnings is 3 cents per share, which has increased by a penny in the past 30 days [1][2]. Performance Influencing Factors - Reddit's first-quarter performance is anticipated to benefit from the expansion of its advertising business, increased user engagement, and growing artificial intelligence (AI) initiatives [3]. - The advertising business is experiencing strong growth across various objectives, channels, verticals, and geographies, with solid growth expected from mid-market and SMB customers [4]. AI and Automation Investments - The company is heavily investing in automation and AI to enhance ad performance and user experience, including features like the AI-powered Reddit Answers tool [5]. - Improvements in Reddit's Ads Manager and the use of Machine Learning (ML) optimization are expected to enhance the overall ad experience [5][6]. International Revenue Growth - International ad revenue rose 77% year-over-year in Q4 2024, with continued strong growth expected from the U.K. and EMEA regions [7]. Stock Performance and Valuation - RDDT shares have declined 25.7% year-to-date, underperforming the Zacks Computer & Technology sector and the Zacks Internet - Software industry [10]. - The stock is trading at a premium with a forward 12-month Price/Sales ratio of 11.26X compared to the industry average of 4.84X [8]. Competitive Landscape - Reddit's expanding partnerships, including collaborations with Alphabet (GOOGL) and Intercontinental Exchange (ICE), enhance its competitive position [14][15]. - However, the company faces intense competition from Snap (SNAP), which has been expanding its advertising capabilities [13][17]. Cost and Regulatory Challenges - Reddit anticipates slightly higher stock-based compensation costs in Q1 2025 due to increased employer taxes related to stock price volatility [18]. - Evolving European Union privacy regulations may also impact Reddit's advertising business internationally [19].