Reddit (RDDT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 54% year-over-year to $281.2 million, driven by higher ad impressions and new data licensing deals.

• Daily active users reached 91.2 million, up 51% year-over-year, with weekly active users at 342.3 million and strong international growth.

• Net loss narrowed to $10.1 million from $41.1 million a year ago; Adjusted EBITDA turned positive at $39.5 million, up $74.9 million year-over-year.

• Product enhancements included user experience, safety, international expansion, machine translation, and new ad formats.

• Positive cash flow and profitability on an Adjusted EBITDA basis for the second consecutive quarter.

Financial highlights

• Gross margin improved to 89.5%, up from 84% a year ago, driven by operating efficiencies and lower cloud hosting costs.

• U.S. revenue grew 55% year-over-year to $228.1 million; international revenue increased 49% to $53.1 million.

• Ad revenue increased 41% year-over-year to $253.1 million, while other revenue (mainly data licensing) surged over 690% to $28.1 million.

• Operating cash flow was $28.4 million in Q2, with Free Cash Flow at $27.2 million, both up over $80 million year-over-year.

• Net loss per share was $(0.06), compared to $(0.70) in the prior year.

Outlook and guidance

• Q3 2024 revenue is estimated at $290–$310 million, with Adjusted EBITDA of $40–$60 million.

• Management expects continued investment in product improvements, international expansion, and new ad formats, which may pressure margins in the near term.

• Sports content partnerships are expected to contribute modestly in 2024, with greater impact in 2025 and beyond.

• Management notes macro uncertainty, especially around elections in Q4.

• Sufficient liquidity is expected to cover working capital and capital expenditures for at least the next 12 months.