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Reddit's Q2 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise
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Key Takeaways
Reddit reported Q2 EPS of 45 cents, beating estimates by 25 cents and reversing a year-ago loss.
Revenues rose 77.9% to $499.63M, driven by 84% growth in advertising and 21% DAUq increase.
Average revenue per unique rose 47% YoY, with U.S. ARPU up 59% and international ARPU up 40%.
Reddit (RDDT - Free Report) reported second-quarter 2025 earnings of 45 cents per share, which beat the Zacks Consensus Estimate by 25 cents. The company had incurred a loss of 6 cents per share in the year-ago quarter.
Revenues of $499.63 million surpassed the Zacks Consensus Estimate by 16.9%. The reported figure surged 77.9% year over year.
RDDT shares jumped 14.07% in the pre-market trading to $183.8 after the company delivered impressive second-quarter results.
For the reported quarter, U.S. revenues (contributing 82% to revenues) surged 79.4% year over year to $409 million. International revenues (18% of revenues) soared 71.7% year over year to $91 million.
Advertising revenues surged 84% year over year to $465 million, and Other revenues increased 24% year over year to $35 million.
Daily Active Uniques (DAUq) jumped 21% year over year to 110.4 million. U.S. DAUq increased 11% year over year to 50.3 million, whereas International DAUq grew 32% to 60.1 million.
Weekly Active Uniques (WAUq) rose 22% year over year to 416.4 million. U.S. WAUq increased 8% year over year to 181 million, whereas International WAUq climbed 35% to 235.4 million.
Average revenue per unique (ARPU) moved up 47% year over year to $4.53. U.S. ARPU increased 59% to $7.87, whereas International ARPU climbed 40% on a year-over-year basis to $1.73.
RDDT's Operating Details
Non-GAAP sales and marketing expenses increased 68.8% year over year to $120.6 million. Research and development expenses rose 37.7% year over year to $196.6 million, while general and administrative expenses increased 0.4% year over year to $68.8 million.
Second-quarter 2025 adjusted EBITDA was $167 million, up from $40 million reported in the year-ago quarter.
RDDT’s Balance Sheet & Cash Flow
As of June 30, 2025, Reddit had cash and cash equivalents, including marketable securities, of $2.06 billion compared with $1.95 billion as of March 31, 2025.
In the second quarter, the company generated $111 million in cash from operating activities compared with $127.6 million in the previous quarter. Reddit reported a free cash flow of $111 million compared with $126.6 million in the previous quarter.
Reddit Initiates Q3 Guidance
For the third quarter of 2025, RDDT expects revenues between $535 million and $545 million. The Zacks Consensus Estimate for third-quarter revenues is pegged at $472.41 million, indicating a 35.61% increase year over year.
The consensus mark for earnings is pinned at 32 cents per share, which has remained unchanged over the past 60 days. The figure indicates a 100% year-over-year increase.
Adjusted EBITDA is expected by RDDT to be between $185 million and $195 million for the third quarter.
Image: Bigstock
Reddit's Q2 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise
Key Takeaways
Reddit (RDDT - Free Report) reported second-quarter 2025 earnings of 45 cents per share, which beat the Zacks Consensus Estimate by 25 cents. The company had incurred a loss of 6 cents per share in the year-ago quarter.
Revenues of $499.63 million surpassed the Zacks Consensus Estimate by 16.9%. The reported figure surged 77.9% year over year.
RDDT shares jumped 14.07% in the pre-market trading to $183.8 after the company delivered impressive second-quarter results.
Reddit Inc. Price, Consensus and EPS Surprise
Reddit Inc. price-consensus-eps-surprise-chart | Reddit Inc. Quote
RDDT’s Q2 Top-Line & Metrics in Detail
For the reported quarter, U.S. revenues (contributing 82% to revenues) surged 79.4% year over year to $409 million. International revenues (18% of revenues) soared 71.7% year over year to $91 million.
Advertising revenues surged 84% year over year to $465 million, and Other revenues increased 24% year over year to $35 million.
Daily Active Uniques (DAUq) jumped 21% year over year to 110.4 million. U.S. DAUq increased 11% year over year to 50.3 million, whereas International DAUq grew 32% to 60.1 million.
Weekly Active Uniques (WAUq) rose 22% year over year to 416.4 million. U.S. WAUq increased 8% year over year to 181 million, whereas International WAUq climbed 35% to 235.4 million.
Average revenue per unique (ARPU) moved up 47% year over year to $4.53. U.S. ARPU increased 59% to $7.87, whereas International ARPU climbed 40% on a year-over-year basis to $1.73.
RDDT's Operating Details
Non-GAAP sales and marketing expenses increased 68.8% year over year to $120.6 million. Research and development expenses rose 37.7% year over year to $196.6 million, while general and administrative expenses increased 0.4% year over year to $68.8 million.
Second-quarter 2025 adjusted EBITDA was $167 million, up from $40 million reported in the year-ago quarter.
RDDT’s Balance Sheet & Cash Flow
As of June 30, 2025, Reddit had cash and cash equivalents, including marketable securities, of $2.06 billion compared with $1.95 billion as of March 31, 2025.
In the second quarter, the company generated $111 million in cash from operating activities compared with $127.6 million in the previous quarter. Reddit reported a free cash flow of $111 million compared with $126.6 million in the previous quarter.
Reddit Initiates Q3 Guidance
For the third quarter of 2025, RDDT expects revenues between $535 million and $545 million. The Zacks Consensus Estimate for third-quarter revenues is pegged at $472.41 million, indicating a 35.61% increase year over year.
The consensus mark for earnings is pinned at 32 cents per share, which has remained unchanged over the past 60 days. The figure indicates a 100% year-over-year increase.
Adjusted EBITDA is expected by RDDT to be between $185 million and $195 million for the third quarter.
Zacks Rank & Stocks to Consider
Currently, Reddit carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Arista Networks (ANET - Free Report) , Bumble (BMBL - Free Report) and Lumentum (LITE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Arista Networks have gained 11.5% year to date. Arista Networks is set to report second-quarter 2025 results on Aug. 5.
Shares of Bumble have lost 4.5% year to date. Bumble is slated to report second-quarter 2025 results on Aug. 6.
Shares of Lumentum have jumped 31.1% year to date. Lumentum is set to report fourth-quarter fiscal 2025 results on Aug. 12.