Financial Data and Key Metrics Changes - Revenue grew 78% year over year to $500,000,000, marking the fastest quarterly growth rate since 2022 [6][29] - Daily active users increased to 110,000,000, up 21% year over year, with growth in both the U.S. and international markets [6][32] - Adjusted EBITDA reached $167,000,000, with a margin of 33%, up over 1,900 basis points year over year [30][32] - GAAP net income was $89,000,000, translating to $0.48 per basic share [41] Business Line Data and Key Metrics Changes - Advertising revenue grew 84% year over year to $465,000,000, driven by broad-based strength across the business [20][32] - Other revenue, including data licensing, reached $35,000,000, growing 24% year over year [32] - Average revenue per user (ARPU) grew 47% year over year to $4.53 [32] Market Data and Key Metrics Changes - Revenue in the U.S. grew significantly, with international markets also showing strong performance, particularly in Europe [32] - The total active advertiser count expanded by over 50% year over year [20] Company Strategy and Development Direction - The company is focusing on improving the core product, enhancing search capabilities, and expanding internationally [12][15] - Strategic investments are being made in sales, marketing, and machine learning to drive user engagement and revenue growth [35][36] - The company is deprioritizing certain initiatives, such as the user economy, to concentrate resources on areas that will drive immediate results [12][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting a unique opportunity for Reddit as a community-driven platform in an increasingly automated world [7][16] - The company is focused on building a more personalized user experience to enhance engagement and retention [84] - Future revenue estimates for Q3 2025 are projected to be between $535,000,000 and $545,000,000, representing 54% to 56% year-over-year growth [42] Other Important Information - Machine translation is now live in 23 languages, facilitating international expansion [15] - The company is investing in marketing strategies to increase user awareness and engagement [19][20] Q&A Session Summary Question: What is one memorable discussion you had at the Cannes Lions Festival? - Management highlighted a discussion where an advertiser realized a new customer segment opportunity and praised the quality of the team [44] Question: What projects are being prioritized over the user economy? - The focus is on improving user engagement through core app improvements and diversifying traffic sources [46] Question: What innovations are expected in the ad business? - Exciting innovations include Dynamic Product Ads and automation features to enhance advertiser onboarding and performance [57] Question: How are user trends evolving in the U.S.? - User trends improved throughout Q2, with better traction noted as the quarter progressed [55] Question: How is the advertising relationship evolving? - The company is seeing growth in active advertisers and has created a global accounts team to service larger clients [68] Question: What are the early learnings from testing Reddit Lite internationally? - The test showed that simplifying the app experience leads to better engagement, and the focus is now on incorporating these improvements into the core app [102]
Reddit(RDDT) - 2025 Q2 - Earnings Call Transcript