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Reddit 8-K Report, Financial Results (Oct 29, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed October 29, 2024
Period End
October 29, 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. Leadership change8-K · May ’24May ’24
  2. Material agreement8-K · Jul ’25Jul ’25
  3. Leadership change8-K · Aug ’26Aug ’26

01—Abstract

Summary

Summary of the 8-K filed October 29, 2024. Cited figures are marked; the original filing is the authoritative source.

Reddit, Inc. (NYSE: RDDT) reported third quarter 2024 results on October 29, 2024, furnishing a press release (Exhibit 99.1) and a shareholder letter (Exhibit 99.2) under Item 2.02.

Revenue rose 68% year-over-year to $348.4 milliona, with advertising revenue of $315.1 million (up 56%) and other revenue of $33.2 million (up over 547%, driven by data licensing agreements). The company achieved GAAP profitability with net income of $29.9 million, a net margin of 8.6%, compared with a net loss of $(7.4) million in the prior-year quarter. Adjusted EBITDA was $94.1 million, a 27.0% margin, versus $(6.9) million a year earlier.

User growth was a central theme. Average daily active uniques (DAUq) reached 97.2 million, up 47%b year-over-year, with U.S. DAUq at 48.2 million and international DAUq at 49.0 million. Management credited machine translation with driving 4x incremental DAUq versus the prior quarter and said it plans to expand machine translation to over 30 countries through 2025.

Operating cash flow was $71.6 millionc and free cash flow was $70.3 million, with capital expenditures of $1.4 million. Cash, cash equivalents, and marketable securities totaled $1.74 billion at September 30, 2024. For the fourth quarter of 2024, the company estimates revenue of $385 million to $400 million and Adjusted EBITDA of $110 million to $125 million.

The filing notes that GAAP-equivalent reconciliations for these non-GAAP guidance figures were not provided due to uncertainty and variability of reconciling items. Management also disclosed $66 milliond invested to net settle 1.2 million employee shares in the quarter, and stock-based compensation and related taxes of $83.3 million, which weighed on GAAP operating expenses.

02—Key points

Key Highlights

  1. Revenue grew 68% year-over-year to $348.4 million; advertising revenue rose 56% to $315.1 million and other revenue rose over 547% to $33.2 million, primarily from data licensing agreements.
  2. GAAP profitability achieved: net income of $29.9 million (8.6% net margin) versus a net loss of $(7.4) million in Q3 2023.
  3. Adjusted EBITDA of $94.1 million (27.0% margin) compared with $(6.9) million in the prior-year quarter; gross margin expanded to 90.1%, up 280 basis points.
  4. Daily active uniques averaged a record 97.2 million, up 47% year-over-year, with logged-out DAUq up 70% and logged-in DAUq up 27%.
  5. Positive operating cash flow of $71.6 million and free cash flow of $70.3 million; cash, cash equivalents, and marketable securities totaled $1.74 billion.
  6. Q4 2024 guidance: revenue of $385 million to $400 million and Adjusted EBITDA of $110 million to $125 million.
  7. Stock-based compensation and related taxes were $83.3 million in the quarter, up from $9.4 million a year earlier, and the company invested $66 million to net settle 1.2 million employee shares.

03—Questions

Frequently Asked Questions

  1. How did Reddit's revenue and profitability change in Q3 2024?

    Revenue increased 68% year-over-year to $348.4 million. Net income was $29.9 million, compared with a net loss of $(7.4) million in Q3 2023, and Adjusted EBITDA was $94.1 million, compared with $(6.9) million. The shareholder letter attributes the GAAP profit to revenue growth outpacing expense growth.

  2. What drove user growth on the platform?

    Average DAUq reached 97.2 million, up 47% year-over-year, and WAUq averaged 365.4 million, up 53%. Management credited machine translation, which drove 4x incremental DAUq in Q3 compared with Q2, and noted international DAUq grew 44%, led by 53% growth in focus markets. Logged-out DAUq grew 70% and logged-in DAUq grew 27%.

  3. What is the company's guidance for the fourth quarter of 2024?

    Reddit estimates Q4 2024 revenue of $385 million to $400 million and Adjusted EBITDA of $110 million to $125 million. The filing states these are estimates and not guarantees, and that reconciliations to the corresponding GAAP guidance measures were not provided due to uncertainty and variability of reconciling items.

  4. What did the company say about its data licensing and advertising business?

    Other revenue of $33.2 million, which includes data licensing revenue, increased over 547% year-over-year, primarily driven by data licensing agreements signed earlier in 2024. Advertising revenue grew 56%, with performance revenue accounting for about 60% of total advertising revenue, and the scaled business (Mid-Market and SMB) growing over 80% year-over-year. The company also entered a new partnership with Meltwater during the quarter.

04—Continue

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