Reddit (RDDT) Q1 2025 earnings summary

Executive summary

• Revenue reached $392.4 million in Q1 2025, up 61% year over year, driven by strong advertising and content licensing.

• Net income was $26.2 million, reversing a $575.1 million loss in Q1 2024, with improved operating leverage and lower stock-based compensation.

• Daily active users (DAUs/DAUq) hit 108.1 million, up 31% year over year, with weekly actives at 401 million.

• Adjusted EBITDA was $115.3 million, with a margin of 29.4%, and free cash flow reached $126.6 million.

• Cash, cash equivalents, and marketable securities totaled $2.0 billion as of March 31, 2025.

Financial highlights

• Advertising revenue grew 61% year over year to $359 million, with international ad revenue up 83% and U.S. ad revenue up 56%.

• Other revenue, including data licensing, reached $34 million, up 66% year over year.

• Gross margin expanded to 90.5%, up 190 basis points year over year.

• Operating cash flow was $128 million, with a margin of 33% of revenue; free cash flow was $127 million.

• Diluted EPS was $0.13, compared to $(8.19) in the prior year.

Outlook and guidance

• Q2 2025 revenue is expected between $410 million and $430 million, representing 46%-53% year-over-year growth.

• Adjusted EBITDA guidance for Q2 is $110 million-$130 million, or 180%-230% year-over-year growth.

• Management expects continued investment in product, international expansion, and AI/ML to drive growth.

• Anticipates increased costs from new ad formats and features, with some near-term volatility in user and revenue growth rates.

• Existing liquidity and credit facilities are expected to cover working capital and capital expenditures for at least the next 12 months.