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01/10 18:02
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals robust financial performance with 61% revenue growth and record high operating cash flow. Despite some macroeconomic uncertainties, management remains optimistic about sustained user growth and advertising revenue. The Q&A section highlights positive sentiment from analysts, with concerns about data quality addressed and new AI integrations enhancing user experience. The strong financial metrics, optimistic guidance, and innovative product developments like Reddit Answers suggest a positive market reaction, likely leading to a stock price increase.
Revenue $392 million, up 61% year-over-year, driven by strong growth in advertising revenue.
Advertising Revenue $359 million, up 61% year-over-year, supported by broad-based strength across objectives, channels, verticals, and geographies.
Adjusted EBITDA $115 million, with an adjusted EBITDA margin of 29%, up over 2,500 basis points year-over-year.
Net Income $26 million, with a net income margin of 7%, up from a loss last year.
Operating Cash Flow $128 million, our highest ever, with an operating cash flow margin of 33% of revenue.
Free Cash Flow $127 million, representing 32% of revenue.
Total Diluted Shares 206 million, reflecting a decrease in share count.
Gross Margins 90.5%, up 190 basis points year-over-year.
Other Revenue $34 million, growing 66% year-over-year.
International Revenue Growth 82% year-over-year, the fastest growth rate in over three years.
Reddit Answers: Reddit Answers, our version of AI search, has reached 1 million weekly users and began its global expansion, starting with Australia and the U.K.
Machine Translation: Machine translation is now available in 13 languages, with more on the way, to support international growth.
Interactive Experiences: 400,000 users engaged in games and interactive experiences on our developer platform in Q1.
Ad Revenue Growth: Advertising revenue grew 61% year-over-year to $359 million, with international ad revenue growing 83% year-over-year.
User Growth: 401 million weekly users and 108 million daily users, both up 31% year-over-year.
International Expansion: Focus markets like France, Spain, and Brazil are growing nearly twice as fast as total international users.
Adjusted EBITDA: Adjusted EBITDA reached $115 million in Q1, with a margin of 29%, up over 2,500 basis points year-over-year.
Operating Cash Flow: Operating cash flow exceeded $100 million for the first quarter, ending at $128 million.
Cost Management: Total adjusted costs grew 19% year-over-year, less than one-third of the rate of revenue growth.
Global Platform Strategy: Reddit aims to become a truly global platform, enhancing user experience and community engagement.
Ad Stack Improvements: Focus on driving performance across objectives and improving usability for advertisers.
Community Engagement: Continued investment in community-driven content and tools to enhance user participation.
Competitive Pressures: Reddit faces challenges from competitors in the social media and online community space, which may impact user engagement and advertising revenue.
Regulatory Issues: The company acknowledges the need to adapt to evolving regulations, particularly concerning data privacy and content moderation, which could affect operational practices.
Supply Chain Challenges: While not explicitly mentioned, the discussion around technology investments and hiring suggests potential risks in scaling operations and maintaining service quality.
Economic Factors: The company operates in a fluctuating macroeconomic environment, which can create both challenges and opportunities for user engagement and advertising revenue.
Data Quality and Authenticity: Concerns were raised about maintaining data quality and preventing fake accounts or bots, which could undermine the platform's value proposition.
Revenue Growth: Revenue was $392 million, up 61% year-over-year, marking the third consecutive quarter of growth over 60%.
Advertising Revenue: Advertising business grew 61% year-over-year to $359 million, driven by broad-based strength across objectives, channels, verticals, and geographies.
International Expansion: International ad revenue grew 83% year-over-year, the fastest growth rate in three years, with a focus on markets like the U.K. and EMEA.
Product Development: Upgrading Reddit search and integrating AI search (Reddit Answers) into core search experience.
Community Engagement: 400,000 users engaged in interactive experiences on the platform, indicating strong community participation.
Q2 2025 Revenue Guidance: Estimated revenue in the range of $410 million to $430 million, representing 46% to 53% year-over-year growth.
Q2 2025 Adjusted EBITDA Guidance: Estimated adjusted EBITDA in the range of $110 million to $130 million, representing approximately 180% to 230% year-over-year growth.
Cash Flow: Operating cash flow exceeded $100 million for Q1, ending at $128 million, the highest ever.
CapEx: CapEx remained light, less than $1 million in the quarter.
Net Income: Net income was $26 million, or $0.14 per basic share.
Total diluted shares: Total diluted shares fell again sequentially to 206 million in Q1 as we continue to thoughtfully manage our share count.
Reddit's earnings call reveals strong financial performance, with record high Adjusted EBITDA and positive cash flow. The Q&A section highlights promising international growth, particularly in France, Brazil, and India, and successful marketing campaigns. However, some uncertainties remain, such as unclear management responses on LLM licensing and AI chatbot referrals. Despite this, the overall sentiment is positive due to strong financial metrics, optimistic guidance, and strategic growth initiatives in international markets and product enhancements.
The earnings call summary indicates strong financial performance with significant revenue growth and positive guidance for Q2 2025. The Q&A session reveals strategic advancements in advertising and data licensing, along with positive international expansion efforts. Despite some uncertainties in data licensing, the overall sentiment from analysts appears positive, especially with the focus on automation and AI integration. The stock is expected to react positively in the short term, with a potential increase of 2% to 8%.
The earnings call reveals robust financial performance with 61% revenue growth and record high operating cash flow. Despite some macroeconomic uncertainties, management remains optimistic about sustained user growth and advertising revenue. The Q&A section highlights positive sentiment from analysts, with concerns about data quality addressed and new AI integrations enhancing user experience. The strong financial metrics, optimistic guidance, and innovative product developments like Reddit Answers suggest a positive market reaction, likely leading to a stock price increase.
The earnings call presented strong financial performance with revenue and EBITDA growth, improved gross margins, and positive cash flow. The Q&A section highlighted confidence in profitability and ad innovations, though some uncertainty remains regarding Google's algorithm changes. The guidance is optimistic, with a focus on growth and profitability, which should positively impact stock price. Despite some non-specific responses, the overall sentiment is positive, suggesting a likely stock price increase of 2% to 8%.
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