01—Abstract
Summary
Summary of the 10-Q filed August 1, 2025. Cited figures are marked; the original filing is the authoritative source.
Reddit, Inc. reported a strong second quarter of 2025, with revenue of $499.6 milliona for the three months ended June 30, 2025, up 78% year over year from $281.2 million, and net income of $89.3 million compared with a net loss of $10.1 million a year earlier.
Advertising revenue was $464.8 millionb and other revenue was $34.8 million. Income from operations was $67.7 million versus a loss of $31.0 million in the prior-year quarter. Adjusted EBITDA was $166.7 million, and Free Cash Flow was $110.8 million for the quarter.
For the six months ended June 30, 2025, revenue was $892.0 millionc, up 70%, and net income was $115.5 million. User metrics grew over the period: Daily Active Uniques (DAUq) were 110.4 million, up 21% year over year, and ARPU was $4.53, up 47%. The filing notes that logged-out users comprised 55% of global DAUq and that DAUq growth is expected to slow as the base grows.
The company held $2.1 billiond in cash, cash equivalents, and marketable securities at June 30, 2025, and it signed a renewal of its revolving credit facility on July 1, 2025 that provides a five-year, $500.0 million facility. The filing also discloses a securities class action filed in June 2025 alleging false or misleading statements about the impact of Google Search and its AI Overviews feature on the business, along with related shareholder derivative complaints.
The company states that the outcome remains uncertain given the preliminary stage of the proceedings. Remaining performance obligations on long-term contracts were $194.9 million, primarily from long-term content licensing contracts, with $57.0 million expected to be recognized in the remainder of 2025.
02—Key points
Key Highlights
- Q2 2025 revenue of $499.6 million, up 78% year over year; six-month revenue of $892.0 million, up 70%
- Q2 2025 net income of $89.3 million versus a net loss of $10.1 million in Q2 2024; income from operations of $67.7 million versus a loss of $31.0 million
- Adjusted EBITDA of $166.7 million for Q2 2025 versus $39.5 million in Q2 2024; Free Cash Flow of $110.8 million versus $27.2 million
- DAUq of 110.4 million, up 21% year over year; ARPU of $4.53, up 47%; logged-out users were 55% of global DAUq
- Cash, cash equivalents, and marketable securities totaled $2.1 billion as of June 30, 2025
- Securities class action filed in June 2025 over statements about the impact of Google Search and AI Overviews on the business; derivative complaints also filed
- Revolving credit facility renewed July 1, 2025 as a five-year, $500.0 million facility, down from $750.0 million
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Reddit kept $0.18.
- Revenue$499.6M100.0%
- Cost of revenue−$45.9M9.2%
- Gross profit$453.7M90.8%
- Operating costs−$386.0M77.3%
- Operating income$67.7M13.6%
- Interest, other & tax$21.6M4.3%
- Net income$89.3M17.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 1, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $499.63M$281.18M | +77.7% |
| Cost of Revenue | $45.90M$29.50M | +55.6% |
| Gross Profit | $453.73M$251.68M | +80.3% |
| R&D Expenses | $196.61M$142.78M | +37.7% |
| Operating Expenses | $431.92M$312.22M | +38.3% |
| Operating Income | $67.71M-$31.04M | +318.1% |
| Net Income | $89.30M-$10.10M | +984.2% |
| EPS (Basic) | $0.48$-0.06 | +900.0% |
| EPS (Diluted) | $0.45$-0.06 | +850.0% |
| Shares Outstanding (Basic) | 185.44M164.38M | +12.8% |
| Shares Outstanding (Diluted) | 199.52M164.38M | +21.4% |
05—Questions
Frequently Asked Questions
What drove the revenue growth in the second quarter of 2025?
The filing attributes the growth primarily to an increase in advertising revenue driven by more impressions delivered and, to a lesser extent, higher pricing. Other revenue also increased due to content licensing agreements executed in 2024. Advertising revenue was $464.8 million for the quarter, compared with $253.1 million a year earlier.
How did the company's profitability change compared with the prior year?
Net income was $89.3 million for the three months ended June 30, 2025, compared with a net loss of $10.1 million a year earlier. Income from operations was $67.7 million versus a loss of $31.0 million. Operating expenses rose to $386.0 million from $282.7 million, but revenue growth outpaced them. The six-month comparison is distorted by the prior-year IPO-related catch-up of stock-based compensation.
What is the status of the securities class action lawsuit?
In June 2025, the company and certain officers and directors were named in a securities class action in the U.S. District Court for the Northern District of California. It alleges false or misleading statements about the impact of Google Search and its AI Overviews feature. Shareholder derivative complaints with similar allegations were later filed. No responses had been filed, and the filing says the outcome remains uncertain.
What is the company's liquidity position and credit facility status?
The company had $2.1 billion in cash, cash equivalents, and marketable securities as of June 30, 2025, and said it was in compliance with all covenants. On July 1, 2025, it signed a renewal providing a five-year, $500.0 million revolving facility, with $100.0 million available for letters of credit and another $100.0 million borrowable in certain non-U.S. dollar currencies. The company believes these resources are sufficient for at least the next 12 months.
What are the main risks highlighted for user growth?
The filing notes that DAUq growth is expected to slow as the absolute user base increases, and that logged-out users, who comprised 55% of global DAUq, typically come via search engines, spend less time on the site, and monetize at lower rates. It also cites competition from large language models and changes in third-party search engine algorithms, which affected DAUq growth in the quarter.
06—Continue