Latest Reddit Earnings Report Q4 2024

Reddit's Q4 2024 earnings report highlights a 71% revenue surge to $427.7 million and net income of $71 million, despite user growth challenges due to Google algorithm changes.

Author

Milan Reichl
February 16th, 2025 • Reading Time: 5 minutes

Reddit, Inc.

Company Overview

Reddit, Inc. (NASDAQ: RDDT) is a prominent social media platform that facilitates user-generated content, discussion, and community engagement across a vast array of topics. Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit has evolved into a dynamic network of communities, known as "subreddits," where users can share content, participate in discussions, and explore interests ranging from technology and science to entertainment and art. Headquartered in San Francisco, California, Reddit operates with a mission to empower communities and make their collective knowledge accessible to all. In March 2024, Reddit became a publicly traded company, debuting on the stock market with the ticker symbol RDDT. As of February 2025, the platform boasts over 101 million daily active unique users, reflecting a 39% increase from the previous year. Reddit's revenue streams primarily include advertising and premium memberships, with recent financial reports indicating a 71% increase in fourth-quarter revenue to $427.7 million. The company continues to innovate by integrating AI-powered tools and expanding its international presence, aiming to enhance user experience and community engagement.

Latest Reddit Earnings Comparison (Q4 2024)

Metric

Expected

Actual

Variance

EPS

$0.24

$0.36

50.00%

Revenue

$405M

$428M

5.54%

Historical Reddit Earnings Data

Period

EPS (Exp/Act)

Revenue (Exp/Act)

Variance (EPS/Revenue)

Q3 2024

$-0.07 / $0.16

$313M / $348M

328.57% / 11.35%

Q2 2024

$-0.33 / $-0.06

$253M / $281M

81.82% / 10.89%

Q1 2024

$-8.71 / $-8.19

$213M / $243M

5.97% / 14.16%

Reddit Earnings Call Summary Q4 2024

Highlights

  • Record Revenue Growth: Q4 revenue surged 71% YoY to $428M, bringing full-year revenue to $1.3B (+62% YoY).

  • GAAP Profitability Maintained: Q4 GAAP net income of $71M, marking the second consecutive profitable quarter.

  • Strong User Growth: Daily active unique visitors (DAUq) hit 101.7M (+39% YoY), with international growth leading at 46% YoY.

  • Advertising Revenue Strength: Ad revenue grew 60% YoY to $395M, with brand advertising at its fastest growth in 3 years.

  • Content Licensing Expansion: Signed a new data and analytics partnership with Intercontinental Exchange (ICE) to provide market sentiment insights.

  • Reddit Answers AI Beta Launched: AI-powered search tool for community-driven knowledge, aiming to enhance user retention and engagement.

  • Raised Q1 2025 Guidance: Expected revenue of $360M–$370M (+48%–52% YoY) and adjusted EBITDA of $80M–$90M.

Risks

Despite a strong quarter, Reddit faces key challenges:

  1. SEO Volatility & Search Engine Dependence: Google’s algorithm change temporarily impacted search traffic, raising concerns over long-term reliance.

  2. International Monetization Lag: While international users grew 46% YoY, ad monetization lags behind the U.S. market.

  3. Ad Market Competition: Competing with Meta, Google, and TikTok for digital ad budgets remains an ongoing challenge.

  4. Scaling AI & Search Products: Reddit Answers is still in beta, and AI-driven search monetization remains unproven at scale.

  5. Stock-Based Compensation (SBC) Pressure: Q4 SBC expenses totaled $97M (23% of revenue), affecting overall net profitability.

Opportunities

Reddit is positioned for long-term growth across multiple areas:

  1. AI-Driven Search & Reddit Answers Expansion: Reddit Answers has high engagement potential, with opportunities to increase monetization through recommendations and commerce integrations.

  2. International Ad Growth Acceleration: International ad revenue grew 77% YoY, outpacing the U.S. for the first time since 2023.

  3. Content Licensing as a Revenue Stream: New ICE partnership expands Reddit’s licensing business into the financial services sector.

  4. Performance Ad Innovations & SMB Expansion: Enhanced conversion tracking (CAPI) and AI-driven ad optimization improve advertiser performance.

  5. User Engagement & Monetization Expansion: Ads in comments and conversational ad placements are driving higher engagement and revenue per user.

Outlook

  • Sustained Revenue Growth: Q1 2025 guidance projects ~50% YoY growth, led by advertising strength and content licensing expansion.

  • AI & Search Monetization Scaling: Reddit prioritizing commercial intent search features, which could unlock new ad revenue streams.

  • Continued User Growth: Machine translation rollout and community-building efforts expected to accelerate international DAUq expansion.

  • Improving Profitability & Cash Flow: Adjusted EBITDA margin hit 36%, and free cash flow was $89M (21% margin), reinforcing strong financial positioning.

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The information is provided for educational purposes only and does not constitute financial advice or recommendation and should not be considered as such. Do your own research.