RDDT Q1 Earnings

[FoolishJeff]

Looks like very strong earnings from RDDT, stock is up 18% AH

-RDDT sees Q2 revs at $410-430M vs $390M est – very strong guidance
-RDDT sees Q2 EBITDA at $110-130M vs $106M
-RDDT just grew revenues 61% YoY
-RDDT Q1 EBITDA of $115M vs $88M est. – EBITDA margins at 29.4%
-EBITDA up 10x from a year ago
-RDDT did $126M of FCF with just $1M of capex

Daily Active Uniques (“DAUq”) increased 31% year-over-year to 108.1 million

Revenue grew 61% year-over-year to $392.4 million

Gross margin expanded year-over-year to 90.5%

Net income of $26.2 million, 6.7% of revenue. Diluted EPS of $0.13

Adjusted EBITDA1 of $115.3 million, 29.4% of revenue

Operating cash flow of $127.6 million. Fully diluted shares of 206.0 million, down sequentially

“Over 400 million people now come to Reddit each week—because when you want real opinions, you turn to real people,” said Steve Huffman, Co-Founder and CEO of Reddit. “20 years in, I have never been more excited about Reddit’s future than I am now. We’re growing and building a more valuable platform for community and human perspective.”

• Total revenue increased 61% year-over-year to $392.4 million, Ad revenue increased 61% year-over-year to $358.6 million, and Other revenue increased 66% year-over-year to $33.7 million
• Gross margin was 90.5%, an improvement of 190 basis points from the prior year
• Net income was $26.2 million, as compared to net loss of $(575.1) million in the prior year
• Adjusted EBITDA1was $115.3 million, an improvement of $105.2 million from the prior year
• Operating cash flow was $127.6 million, an improvement of $95.5 million from the prior year
• Free Cash Flow1was $126.6 million and capital expenditures were $1.0 million, less than 1% of revenue
• Basic and diluted earnings per share (“EPS”) were $0.14 and $0.13, respectively
• Total fully diluted shares outstanding were 206.0 million as of March 31, 2025, down 0.1% from the prior quarter

Full Press Release: https://investor.redditinc.com/news-events/news-releases/news-details/2025/Reddit-Announces-First-Quarter-2025-Results/

[monkeydluffy]

This was a really great report. When Reddit reported Q4 2024, my biggest concern was that their Q1 outlook indicated a huge deceleration of YoY growth rate, which created an uncertainty about whether it was just the start of a longer term down trend. Now, with Q2 outlook indicating roughly same YoY growth rate as Q1, it becomes way more certain.

Luffy

[FoolishJeff]

RDDT had a silly drop because they mentioned DAU’s were in the teens during the call. Today was a great day to buy more. The Guidance is what matters. Also, the GOOG algos get tweaked a lot, which could affect the DAU numbers.

[stocknovice]

I feel similarly to @FoolishJeff.

It seems the post-earnings price reversal was spurred by a comment DAU’s were trending high double-digit growth in April. Penciling in flat QoQ would be 18.5%. Taking a historical look, it does appear Q2 adds are historically light. Last year was the outlier.

Given the strong revenue and EBITDA guides, I’m not overly concerned. A reasonable beat would have them again challenging 60% growth even with the early DAU forecast. This seems more like something to watch than worry about for now. I liked the report and added a few trading shares on the sell off.