01—Abstract
Summary
Summary of the 8-K filed August 6, 2024. Cited figures are marked; the original filing is the authoritative source.
Reddit, Inc. (NYSE: RDDT) reported second-quarter 2024 results in an 8-K furnished under Item 2.02, with the full press release (Exhibit 99.1) and shareholder letter (Exhibit 99.2) attached.
Revenue was $281.2 milliona, up 54% year-over-year, with advertising revenue of $253.1 million (up 41%) and other revenue of $28.1 million (up over 690%, driven by data licensing agreements). Daily active uniques averaged 91.2 million, up 51% year-over-year, and weekly active uniques reached 342.3 million, up 57%. Profitability improved sharply from the prior year.
Net loss narrowed to $10.1 millionb from $41.1 million, Adjusted EBITDA was $39.5 million versus $(35.4) million, and gross margin rose to 89.5% from 84.2%. Operating cash flow was $28.4 million and Free Cash Flow was $27.2 million, compared with negative figures in the second quarter of 2023. Cash, cash equivalents and marketable securities totaled $1.70 billion at June 30, 2024.
For the third quarter of 2024, Reddit estimated revenue of $290 million to $310 millionc and Adjusted EBITDA of $40 million to $60 million. The company will hold a conference call on August 6, 2024 at 2:00 p.m. PT, and it noted that the six-month net loss of $585.2 million includes large stock-based compensation expense tied to its IPO period.
02—Key points
Key Highlights
- Revenue of $281.2 million, up 54% year-over-year, the fastest growth in two years according to the shareholder letter
- Advertising revenue of $253.1 million, up 41%; other revenue of $28.1 million, up over 690% on new data licensing agreements
- DAUq of 91.2 million (up 51%) and WAUq of 342.3 million (up 57%), with U.S. DAUq up 59% and international DAUq up 44%
- Net loss of $10.1 million versus $41.1 million a year earlier; Adjusted EBITDA of $39.5 million (14.0% margin) versus $(35.4) million
- Gross margin of 89.5%, an improvement of 530 basis points from 84.2% in the prior-year quarter
- Operating cash flow of $28.4 million and Free Cash Flow of $27.2 million, compared with $(54.1) million and $(54.9) million in Q2 2023
- Q3 2024 guidance: revenue of $290 million to $310 million and Adjusted EBITDA of $40 million to $60 million
03—Questions
Frequently Asked Questions
How did Reddit's revenue perform in the second quarter of 2024?
Total revenue was $281.2 million, up 54% from $183.1 million a year earlier. U.S. revenue was $228.1 million (up 55%) and international revenue was $53.1 million (up 49%).
Is Reddit now profitable?
Reddit reported a net loss of $10.1 million for the quarter, much narrower than the $41.1 million loss in Q2 2023. On an Adjusted EBITDA basis, the company was profitable, with $39.5 million versus $(35.4) million a year earlier. The shareholder letter states this was the third consecutive quarter of Adjusted EBITDA profitability.
What drove the growth in other revenue?
Other revenue of $28.1 million, up over 690% year-over-year, was primarily driven by new data licensing agreements signed in the first half of 2024, including partnerships with OpenAI and Sprinklr.
What is Reddit's outlook for the third quarter of 2024?
Reddit estimated third-quarter 2024 revenue of $290 million to $310 million and Adjusted EBITDA of $40 million to $60 million. The company noted these estimates are not guarantees and are subject to significant risks and uncertainties.
What is Reddit's liquidity position?
Cash, cash equivalents, and marketable securities totaled $1.70 billion as of June 30, 2024, compared with $1.21 billion at December 31, 2023. Capital expenditures for the quarter were $1.2 million.
04—Continue