MW Reddit turns second quarterly profit since IPO as daily active unique users top 100 million for the first time

By James Rogers

Shares tumble despite better-than-expected fourth-quarter earnings and revenue

Reddit Inc. turned its second quarterly profit since becoming a public company, boosted by growth in daily active unique users, which topped 100 million for the first time.

But the San Francisco-based company's shares rose fell 16.5% in extended trading Wednesday, despite Reddit's better-than-expected fourth-quarter earnings and revenue.

Reddit's (RDDT) quarterly profit is its second on a GAAP basis since its initial public offering in March 2024. The company reported net income of $71 million, or 36 cents a share, compared with net income of $18.5 million in the year-ago quarter. Analysts surveyed by FactSet were expecting earnings of 25 cents a share.

Related: Reddit teams with Intercontinental Exchange to build financial-analytics products

Reddit's revenue rose 71% to $427.7 million, from $249.8 million a year ago, above the FactSet consensus of $405 million.

Daily active unique users rose to 101.7 million in the fourth quarter, up 39% from 73.1 million in the previous year's quarter but below the FactSet consensus for 103.12 million users.

"It was another strong quarter as we accomplished exciting milestones across revenue and international growth," Reddit Chief Executive Steve Huffman said in a statement.

Related: Reddit's stock gets a boost as social-media platform ramps up AI-powered search with Reddit Answers

International daily active unique users grew 46% to 53.7 million in the quarter, outpacing the U.S., where daily active unique users grew 32% to 48 million.

The social-media company's international revenue was $80 million, up 76% from $45.4 million in the same period last year.

Reddit defines a daily active unique as a user that the company can identify with a unique identifier who has visited a page on the Reddit website or opened a Reddit application at least once over a 24-hour period.

Related: Reddit's stock soars after social-media platform turns a profit, beats Q3 sales and earnings estimates

Reddit's fourth-quarter gross margin was 92.6%, an improvement of 420 basis points on the same period last year.

For the first quarter, Reddit expects revenue in the range of $360 million to $370 million, above the FactSet consensus of $358 million. The company also expects adjusted Ebitda in the range of $80 million to $90 million.

Reddit shares have risen 329.2% since the company's IPO last year.

-James Rogers

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February 12, 2025 16:20 ET (21:20 GMT)

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