Reddit (NYSE: RDDT) reported its first post-IPO quarterly results on Thursday, significantly surpassing Wall Street expectations and issuing an upbeat forecast for Q2. The news sent the stock soaring as much as 19% in after-hours trading, before settling around a 5% gain as executives addressed broader macroeconomic and search-related headwinds.
Reddit posted earnings per share (EPS) of $0.13 on $392 million in revenue, beating analyst forecasts of $0.02 EPS and $370 million in revenue, according to LSEG estimates. Revenue rose 61% from $243 million a year earlier. Net income hit $26.2 million, a sharp reversal from a $575.1 million loss in Q1 2024 tied to IPO expenses.
“Ever-shifting macro environments like these create both challenges and opportunities,”
— Steve Huffman, CEO, Reddit
Q2 Outlook Exceeds Forecasts
For the second quarter, Reddit expects revenue between $410 million and $430 million, topping Wall Street expectations of $396 million. COO Jen Wong acknowledged macro uncertainty but said the company remains steady.
“There’s a lot of uncertainty in the market,” Wong said, “but it’s been mostly business as usual.”
Daily Active Users Continue to Climb
Reddit reported robust user growth, citing improvements to the site experience and a rebound in Google search traffic following prior algorithm disruptions.
- Total global DAUq: 108.1 million (↑31% YoY)
- Logged-in DAUq: 48.7 million (↑23%)
- Logged-out DAUq: 59.4 million (↑38%)
Analysts had expected 107.3 million DAUq. Reddit said it has focused on converting logged-out visitors into logged-in users, who are more valuable to advertisers.
AI, Search, and the LLM Future
Huffman noted that search-derived traffic may remain volatile, as the ecosystem is “under heavy construction.” Despite near-term bumps, he expressed confidence in Reddit’s long-term opportunity.
Reddit also revealed that its AI assistant “Reddit Answers” now has 1 million weekly active users. Huffman positioned Reddit’s authentic user-generated discussions as a counterpoint to the “sterile” summaries provided by large language models (LLMs) like ChatGPT or Perplexity.
“Reddit thrives on subjective, authentic, messy, multiple viewpoints,” Huffman said. “That’s what makes it irreplaceable.”
Also Read: Meta Surges After Q1 Beat and Strong Q2 Forecast, Even Amid Ad Market Uncertainty
Broader Ad Market Shows Mixed Signals
Reddit’s earnings arrive in a turbulent quarter for the ad industry:
- Meta beat earnings, but Asia-Pacific ad sales missed expectations.
- Snap reported Q1 headwinds and withheld guidance.
- Alphabet said Google ad sales rose 8.5% YoY, and YouTube grew 10%.
Reddit, however, says it is “well-positioned” amid U.S.–China trade uncertainty and shifting digital ad trends.
Key Financials Snapshot
| Metric | Q1 2025 | Estimate | Q1 2024 |
|---|---|---|---|
| Revenue | $392M | $370M | $243M |
| EPS | $0.13 | $0.02 | -$8.19 |
| Net Income | $26.2M | — | -$575.1M |
| Q2 Revenue Guidance | $410M–$430M | $396M | $315M (est.) |
| Global DAUq (total) | 108.1M | 107.3M | ~82.5M |
| Logged-In DAUq | 48.7M | — | ~39.6M |
| Logged-Out DAUq | 59.4M | — | ~43M |
| Reddit Answers WAUq | 1M | — | N/A |
Bottom Line:
Reddit’s strong Q1 2025 earnings, optimistic guidance, and user growth signal a confident post-IPO trajectory. While search volatility and economic uncertainty persist, Reddit is banking on community-powered content and AI integration to stay ahead of the curve.
Also Read: Microsoft Tops Q3 Expectations With $70B Revenue, Cloud and AI Growth Drive 7% Stock Surge
