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Reddit 8-K Report, Financial Results (May 7, 2024)

Reports
Earnings & Results·Leadership Changes·Exhibits & Filings
Filing Date
Filed May 7, 2024
Period End
May 2, 2024
Security
RDDT
In the record · 2024–202610-K210-Q98-K17

RDDT filed 2 annual reports (10-K), 9 quarterly reports (10-Q) and 17 current reports (8-K) between 2024 and 2026.

  1. Material agreement8-K · Jul ’25Jul ’25
  2. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed May 7, 2024. Cited figures are marked; the original filing is the authoritative source.

Reddit, Inc. (NYSE: RDDT) reported first quarter 2024 results on May 7, 2024, with revenue of $243.0 milliona, up 48% year-over-year, and Advertising revenue of $222.7 million, up 39%.

Daily Active Uniques (DAUq) averaged 82.7 million, up 37% year-over-year, and Weekly Active Uniques (WAUq) reached 306.2 million, up 40%. Gross margin was 88.6%, an improvement of 500 basis points from the prior year. The company reported a net loss of $575.1 millionb, compared with $60.9 million a year earlier, driven by stock-based compensation expense and related taxes of $595.5 million tied to IPO charges.

Adjusted EBITDA was $10.0 millionc, versus $(50.2) million in the prior-year quarter, and operating cash flow was $32.1 million with free cash flow of $29.2 million. The balance sheet showed cash, cash equivalents, and marketable securities of $1.67 billion as of March 31, 2024. The filing states that data licensing other revenue was $20.3 million, up over 450% year-over-year, primarily from new data licensing agreements signed in the quarter.

For the second quarter of 2024, the company estimated revenue of $240 million to $255 milliond and Adjusted EBITDA of $0 to $15 million. The filing also discloses the May 2, 2024 appointment of Sarah Farrell, Managing Partner of Waygrove Partnership, to the Board of Directors, which expanded the Board from seven to eight directors. She joins the Audit Committee and will receive a $60,000 annual Board retainer, a $12,500 annual Audit Committee retainer, and a $250,000 target-value RSU award granted May 30, 2024.

02—Key points

Key Highlights

  1. Revenue rose 48% year-over-year to $243.0 million, with Advertising revenue up 39% to $222.7 million and other revenue of $20.3 million up over 450%, driven by new data licensing agreements.
  2. DAUq grew 37% year-over-year to 82.7 million, with U.S. DAUq up 45% and International DAUq up 30%; WAUq increased 40% to 306.2 million.
  3. Gross margin was 88.6%, an improvement of 500 basis points from 83.6% in the prior-year quarter.
  4. Net loss widened to $575.1 million from $60.9 million, primarily due to stock-based compensation expense and related taxes of $595.5 million driven by IPO charges.
  5. Adjusted EBITDA was $10.0 million versus $(50.2) million a year earlier, and free cash flow was $29.2 million, reflecting the company's first profitable Q1 on an Adjusted EBITDA basis.
  6. Q2 2024 guidance projects revenue of $240 million to $255 million and Adjusted EBITDA of $0 to $15 million.
  7. Sarah Farrell joined the Board on May 2, 2024, increasing its size from seven to eight directors and joining the Audit Committee.

03—Questions

Frequently Asked Questions

  1. How did Reddit's revenue and user growth perform in the first quarter of 2024?

    Revenue increased 48% year-over-year to $243.0 million. Daily Active Uniques averaged 82.7 million, up 37%, and Weekly Active Uniques reached 306.2 million, up 40%. U.S. revenue grew 53% and International revenue grew 30%.

  2. Why was the net loss so large in the quarter?

    The company reported a net loss of $575.1 million, primarily driven by stock-based compensation expense and related taxes of $595.5 million, which the filing attributes to IPO charges.

  3. What drove the revenue growth in the quarter?

    The filing states that advertising revenue grew 39% year-over-year to $222.7 million, mainly driven by increased ad impressions and Logged-in DAUq growth, partially offset by a decline in ad pricing. Other revenue, including data licensing, rose over 450% to $20.3 million.

  4. What is Reddit's outlook for the second quarter of 2024?

    The company estimated second-quarter 2024 revenue in the range of $240 million to $255 million and Adjusted EBITDA in the range of $0 to $15 million.

  5. What changed on the Board of Directors?

    On May 2, 2024, Sarah Farrell, Managing Partner of Waygrove Partnership, was appointed to a newly created seat, increasing the Board from seven to eight directors. She was also appointed to the Audit Committee and was determined to be independent under NYSE listing rules.

04—Continue

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