Reddit, Inc. (RDDT) operates a social media platform where users, known as Redditors, engage in discussions, share content, and participate in communities called subreddits. The company primarily generates revenue through advertising, offering a variety of ad formats and targeting options. Additionally, Reddit provides subscription services, data licensing, and user economy products to diversify its revenue streams.
- Advertising - Sells advertising on its platform, including mobile applications and website, with revenue generated through user interactions such as clicks, views, or video plays. Ads can also be sold on a fixed fee basis over short service periods.
- Data Licensing - Provides customers access to platform data over a contractual period, with revenue recognized as data is consumed and utilized by partners.
- Reddit Premium Subscriptions - Offers paid subscriptions that provide users with additional features and benefits, with revenue recognized over the subscription period.
- User Economy Products - Includes offerings like Reddit Gold and Collectible Avatars, though revenue from these products is noted as immaterial.
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| Name | Position | External Roles | Short Bio | |
|---|---|---|---|---|
Andrew Vollero Executive | CFO | None reported | Former CFO at Allied Universal and Snap Inc., joined Reddit in 2021. | |
Michelle Reynolds Executive | CAO | None reported | Appointed as CAO in 2024, no prior roles at Reddit mentioned. | |
Steven Huffman Executive | CEO and President | Board Member at GameChanger Charity and Bishop Fox | Co-founder of Reddit, returned as CEO in 2015, pivotal in Reddit's growth and strategic direction. | View Report → |
Michael Seibel Board | Director | Group Partner at Y Combinator, Managing Director of YC Early Stage, Board of Directors of Dropbox, Inc. | Board member since 2020, former CEO of Socialcam and Justin.tv, involved with Y Combinator. | |
Robert A. Sauerberg Board | Director and Vice Chairperson | None reported | Director since 2012, no specific achievements detailed. | |
Sarah Farrell Board | Director | Board Member at Verra Mobility Corporation, Kolmac Outpatient Recovery Centers, Lindblad Expeditions Holdings, Inc. | Joined Reddit's Board in 2024, appointed to Audit Committee, extensive finance and investment expertise. | |
Steven O. Newhouse Board | Director | Co-President of Advance, Board Member at Warner Bros. Discovery, Inc., Board of Trustees at New York-Presbyterian Hospital | Served as board observer from 2011 to 2023, director since 2023, extensive media and entertainment experience. |
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Given that your recent profitability benefited significantly from revised hosting agreements lowering cloud hosting costs , how sustainable are these gross margins, and how do you plan to offset potential future cost increases from user growth, machine learning investments, or new initiatives like search?
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With the impact of Google's algorithm change on your logged-out user traffic in Q4 , how do you plan to reduce reliance on external search engines for user acquisition, and what strategies are in place to improve conversion of logged-out users to logged-in users to enhance engagement and retention?
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Reddit Answers, your AI-powered search tool, is currently only available in English and in beta ; what challenges do you anticipate in scaling this feature globally, and how will you ensure it effectively drives user engagement and monetization without compromising user experience?
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While international user growth outpaces the U.S., monetization in international markets remains significantly lower ; how do you plan to bridge the ARPU gap between international and U.S. users, and what investments are you making to accelerate international revenue growth?
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You've indicated an accelerated hiring pace, particularly in areas like adtech, sales, and search, leading to increased operating expenses ; how will you balance these investments with your goal of maintaining GAAP profitability, and what metrics are you using to evaluate the return on these investments?
Competitors mentioned in the company's latest 10K filing.
| Company | Description |
|---|---|
Competes in areas such as seeking information and advertising, and also develops large language models that may draw users away from the platform. | |
Listed as a competitor in the seeking information category, potentially drawing users who are looking for product-related information. | |
YouTube | Competes in both seeking information and entertainment categories, offering a platform for video content that overlaps with user engagement goals. |
Wikipedia | Competes in the seeking information category, providing a free online encyclopedia that users may turn to instead of the platform. |
X | Competes across multiple categories including seeking information, entertainment, and passions and hobbies, offering a social media platform for real-time updates and discussions. |
Competes in entertainment and passions and hobbies categories through its platforms like Facebook, Instagram, Threads, and WhatsApp, which have substantial user bases and financial resources. | |
Competes in the entertainment category, offering a platform for multimedia messaging and content sharing. | |
TikTok | Competes in the entertainment category, providing a platform for short-form video content that attracts significant user engagement. |
Competes in both entertainment and peer-to-peer commerce categories, offering a platform for gaming and virtual goods. | |
Twitch | Competes in the entertainment category, focusing on live streaming, particularly for gaming content. |
Discord | Competes in the passions and hobbies category, providing a platform for community discussions and group interactions. |
Competes in the passions and hobbies category, offering a platform for discovering and sharing ideas visually. | |
Facebook Groups | Competes in the passions and hobbies category, providing a space for users to connect over shared interests. |
Facebook Marketplace | Competes in the peer-to-peer commerce category, offering a platform for buying and selling goods locally. |
Nextdoor | Competes in the peer-to-peer commerce category, focusing on local community interactions and transactions. |
Craigslist | Competes in the peer-to-peer commerce category, offering a platform for classified ads and local transactions. |
Poshmark | Competes in the peer-to-peer commerce category, focusing on fashion and second-hand goods. |
Competes in the peer-to-peer commerce category, offering a marketplace for handmade and vintage items. | |
Patreon | Competes in the user economy category, providing a platform for creators to monetize their content through subscriptions. |
Substack | Competes in the user economy category, offering a platform for writers to monetize their newsletters. |
Squarespace | Competes in the user economy category, providing tools for creators to build and monetize their websites. |
OpenAI | Develops large language models that compete with the platform by offering alternative ways for users to find information, potentially trained on the platform's content. |
Anthropic | Develops large language models that compete with the platform by offering alternative ways for users to find information, potentially trained on the platform's content. |
Gemini | Listed as a competitor in the seeking information category, representing a large language model alternative. |
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Technology Company | 2024 | Deal Value & Structure: Reddit acquired the technology company for a total purchase consideration of $19.9 million (comprising $17.1 million in cash and $2.8 million in equity), plus an additional $10.7 million earmarked for post-combination expenses including stock-based compensation. Strategic Rationale & Capabilities: The acquisition was aimed at enhancing Reddit’s technology and workforce capabilities, with key assets including developed technology (allocated $4.3 million over a three-year useful life) and significant goodwill representing synergies, though this goodwill is not tax deductible. |
Memorable AI | 2024 | Deal Value & Structure: The Memorable AI acquisition carried the same total purchase consideration of $19.9 million (split into $17.1 million in cash and $2.8 million in equity), along with an extra $10.7 million for post-combination expenses. Strategic Rationale & Capabilities: Strategically fitting with Reddit’s drive to bolster its ad stack, the acquisition of Memorable AI—specialized in ad creative optimization and insights—accelerates Reddit’s roadmap for AI-driven advertising solutions and better lower-funnel performance. |
Spell, Inc. | 2022 | Deal Value & Structure: In June 2022, Reddit completed the acquisition of Spell, Inc. by issuing 236,117 shares of Class A common stock at $61.79 per share, totaling an aggregate consideration of $14.6 million. Strategic Rationale & Capabilities: While detailed strategic aims are not specified, the share-based transaction underscores the business's commitment to integrating Spell, Inc.'s capabilities into its broader strategic framework. |
Recent press releases and 8-K filings for RDDT.
- Bragar Eagel & Squire, P.C. has commenced a class action lawsuit against Reddit, Inc. (NYSE:RDDT).
- The class period for the lawsuit is from October 29, 2024, to May 20, 2025, with a lead plaintiff deadline of August 18, 2025.
- The complaint alleges that Reddit made false and misleading statements by failing to disclose that changes in Google Search's AI features were materially reducing user traffic, which impacted the company's outlook on user rates and advertising revenues.
- Reddit's stock price declined following its May 1, 2025, earnings release, which revealed three consecutive quarters of deceleration in daily active user growth, and subsequent analyst downgrades on May 19, 2025, and May 21, 2025, citing concerns over Google AI's impact.
- Reddit reported a strong Q2 with advertising revenue growing 84% year-over-year and active advertisers increasing by 50% year-over-year, alongside 21% user growth [0:30][0:38].
- The company attributes this performance to its strategic investments in enhancing marketer value and expanding its sales team [1:06][1:25].
- International revenue, which constitutes approximately 20% of total revenue, saw advertising revenue grow over 70% in the quarter, particularly in Europe and EMEA [5:05].
- Reddit is pursuing future monetization opportunities through its new Reddit Answers and search experience, which integrates an LLM, and remains open to further data licensing deals for large language models [2:07][3:43].
- A class action lawsuit has been filed against Reddit, Inc. (RDDT) on behalf of investors who acquired securities between October 29, 2024, and May 20, 2025.
- The lawsuit alleges that Reddit made materially false or misleading statements by failing to disclose the significant negative impact of Google Search's algorithm changes and AI features on user traffic and advertising revenue.
- Reddit's stock price experienced declines following its Q1 2025 results and analyst downgrades, falling 4.2% on May 2, 2025, 4.6% on May 19, 2025, and 9.3% on May 21, 2025.
- The deadline for investors to file a lead plaintiff motion in this class action is August 18, 2025.
- Bragar Eagel & Squire, P.C. has reminded investors of a class action lawsuit against Reddit, Inc..
- The lawsuit covers a Class Period from October 29, 2024, to May 20, 2025, with a Lead Plaintiff Deadline of August 18, 2025.
- Allegations include that Reddit made false and/or misleading statements by failing to disclose that Google Search's new AI features, such as AI Overview, were materially reducing user traffic to Reddit, impacting its outlook on user rates and advertising revenues.
- The lawsuit claims investors suffered damages, citing stock price drops on May 2, May 19, and May 21, 2025, following news of decelerating user growth and analyst downgrades.
- A class action lawsuit has been commenced against Reddit, Inc. (NYSE: RDDT) on behalf of stockholders, covering a Class Period from October 29, 2024, to May 20, 2025.
- The lawsuit alleges that Reddit made false and misleading statements and failed to disclose that changes in Google Search's algorithm and new AI features were significantly reducing user traffic, which impacted the company's outlook on user rates and advertising revenues.
- Following the Q1 2024 earnings release on May 1, 2025, which revealed three consecutive quarters of deceleration in daily active user growth, Reddit's stock price fell $4.96 per share, or 4.2%.
- Further stock declines occurred after analyst downgrades from Wells Fargo on May 19, 2025, and Baird on May 21, 2025, with Wells Fargo lowering its price target to $115 per share from $168 per share.
- Bragar Eagel & Squire, P.C. has announced a class action lawsuit against Reddit Inc. (RDDT).
- The class period for the lawsuit is from October 29, 2024, to May 20, 2025, with a lead plaintiff deadline of August 18, 2025.
- The complaint alleges that Reddit made false and misleading statements by failing to disclose that Google Search's new AI features were significantly reducing user traffic and impacting advertising revenues, thus lacking a reasonable basis for its outlook.
- This follows Reddit's May 1, 2025, earnings release, which revealed three consecutive quarters of deceleration in daily active user growth for the period ending March 31, 2025.
- Subsequent analyst downgrades from Wells Fargo and Baird in May 2025, citing Google AI disruptions, led to significant stock price declines for Reddit.
- A class action lawsuit has been filed against Reddit, Inc. (RDDT) on behalf of investors who purchased securities between October 29, 2024, and May 20, 2025. The deadline for investors to file a lead plaintiff motion is August 18, 2025.
- The lawsuit alleges that Reddit made materially false and/or misleading statements and failed to disclose that changes in Google Search's algorithm and AI features were significantly reducing user traffic to Reddit, which would negatively impact advertising revenue.
- Reddit's stock price experienced significant declines following these developments: a 4.2% drop on May 2, 2025, after Q1 2025 results showed a third consecutive quarter of user growth slowdown; a 4.6% drop on May 19, 2025, after a Wells Fargo downgrade; and a 9.3% drop on May 21, 2025, after a Baird downgrade.
- A class action lawsuit has been commenced against Reddit, Inc. on behalf of its stockholders.
- The class period for the lawsuit is October 29, 2024, to May 20, 2025, with the lead plaintiff deadline set for August 18, 2025.
- The complaint alleges that Reddit made false and misleading statements and/or failed to disclose that changes in Google Search's algorithm and new AI features, such as AI Overview, were significantly reducing user traffic to Reddit, impacting user rates and advertising revenues.
- Investors allegedly suffered damages as the stock price fell following the announcement of three consecutive quarters of deceleration in daily active user growth in Q1 2024, and subsequent analyst downgrades citing "permanent" disruptions from Google AI features.
- Reddit, Inc. entered into an Amended and Restated Credit and Guarantee Agreement on July 1, 2025, which amends and restates its existing credit facility.
- The agreement extends the maturity date of the revolving credit facility to July 1, 2030.
- Total commitments under the Revolving Credit Facility have been decreased to $500.0 million.
- Financial covenants were modified to transition to a maximum total leverage ratio beginning after July 1, 2025, with specific ratios of 5.50 to 1.00 until July 1, 2026, and 4.50 to 1.00 thereafter.
- Reddit achieved $392 million in revenue, up 61% YoY .
- The company reached GAAP profitability with $26 million in net income (6.7% margin) .
- It delivered $115 million in adjusted EBITDA (29.4% margin) alongside a record $128 million operating cash flow .
- Robust user engagement was reported with 108 million daily and 401 million weekly users (up 31% YoY) .
- A gross margin of 90.5% was recorded, underlining strong operational performance .
- Ongoing investments, including AI-powered search enhancements and beta testing of dynamic product ads, continue to drive growth .
- Q2 guidance was provided with revenue expected in the $410–$430 million range .