01—Abstract
Summary
Summary of the 8-K filed July 31, 2025. Cited figures are marked; the original filing is the authoritative source.
Reddit, Inc. (NYSE: RDDT) reported results for the quarter ended June 30, 2025 in a press release furnished as Exhibit 99.1 and a shareholder letter furnished as Exhibit 99.2.
Revenue was $500 milliona, up 78% year-over-year, with advertising revenue of $465 million (up 84%) and other revenue of $35 million (up 24%). Gross margin was 90.8%, net income was $89 million (diluted EPS of $0.45), and Adjusted EBITDA was $167 million, a 33% margin. Operating cash flow was $111 million and Free Cash Flow was $111 million.
Daily Active Uniques (DAUq) averaged 110.4 million, up 21% year-over-year, and fully diluted shares were 206.6 million, up 0.3% from the prior quarter. For the third quarter of 2025, Reddit estimates revenue of $535 million to $545 millionb and Adjusted EBITDA of $185 million to $195 million. The shareholder letter states that management is deprioritizing some initiatives, including work on the user economy, to concentrate resources on the core product, search (Reddit Answers reached 6 million weekly active uniques), and international expansion, where machine translation is now live in 23 languages.
The filing also notes that the company will hold a conference call on July 31, 2025 at 2:00 p.m. Pacific Time, and will solicit questions from the community on its investor relations subreddit, r/RDDT. Reddit states that it uses its investor relations website and subreddits r/RDDT and r/reddit to disclose material information under Regulation FD.
02—Key points
Key Highlights
- Revenue of $500 million rose 78% year-over-year; advertising revenue of $465 million grew 84% and other revenue of $35 million grew 24%.
- Net income of $89 million compared with a net loss of $(10) million in the prior-year quarter; basic and diluted EPS were $0.48 and $0.45.
- Adjusted EBITDA of $167 million (33% margin) improved by $127 million from the prior year; gross margin was 90.8%, up 130 basis points.
- Operating cash flow and Free Cash Flow were each $111 million, improving $83 million and $84 million year-over-year, respectively.
- DAUq averaged 110.4 million, up 21% year-over-year (U.S. up 11%, International up 32%); WAUq was 416.4 million, up 22%.
- Third-quarter 2025 guidance: revenue of $535 million to $545 million and Adjusted EBITDA of $185 million to $195 million.
- Cash, cash equivalents, and marketable securities totaled $2.06 billion as of June 30, 2025; fully diluted shares were 206.6 million, up 0.3% sequentially.
03—Questions
Frequently Asked Questions
What drove Reddit's revenue growth in the second quarter of 2025?
The shareholder letter attributes the growth to broad strength across objectives, verticals, geographies, and channels, with advertising revenue growth driven by year-over-year increases in impressions and pricing. U.S. revenue grew 79% and International revenue grew 71%. The letter also says user growth was driven mainly by product improvements and increased marketing activity.
What is Reddit's guidance for the third quarter of 2025?
Reddit estimates third-quarter 2025 revenue in the range of $535 million to $545 million and Adjusted EBITDA in the range of $185 million to $195 million. The company states these estimates are not a guarantee of future performance and provides no reconciliation of its non-GAAP guidance to GAAP equivalents.
Is Reddit now profitable on a GAAP basis?
Yes. Net income was $89 million for the quarter, compared with a net loss of $(10) million in the prior-year quarter, and six-month net income was $115 million compared with a net loss of $(585) million a year earlier.
What strategic changes did management announce?
The shareholder letter says Reddit is deprioritizing several initiatives, including work on the user economy, to focus resources on improving the core product, making Reddit a go-to search engine (Reddit Answers grew to 6 million weekly active uniques), and expanding internationally with machine translation live in 23 languages.
04—Continue