Reddit RDDT reported second-quarter 2025 earnings of 45 cents per share, which beat the Zacks Consensus Estimate by 25 cents. The company had incurred a loss of 6 cents per share in the year-ago quarter.
Revenues of $499.63 million surpassed the Zacks Consensus Estimate by 16.9%. The reported figure surged 77.9% year over year.
RDDT shares jumped 14.07% in the pre-market trading to $183.8 after the company delivered impressive second-quarter results.
Reddit Inc. Price, Consensus and EPS Surprise
Reddit Inc. price-consensus-eps-surprise-chart | Reddit Inc. Quote
RDDT’s Q2 Top-Line & Metrics in Detail
For the reported quarter, U.S. revenues (contributing 82% to revenues) surged 79.4% year over year to $409 million. International revenues (18% of revenues) soared 71.7% year over year to $91 million.
Advertising revenues surged 84% year over year to $465 million, and Other revenues increased 24% year over year to $35 million.
Daily Active Uniques (DAUq) jumped 21% year over year to 110.4 million. U.S. DAUq increased 11% year over year to 50.3 million, whereas International DAUq grew 32% to 60.1 million.
Weekly Active Uniques (WAUq) rose 22% year over year to 416.4 million. U.S. WAUq increased 8% year over year to 181 million, whereas International WAUq climbed 35% to 235.4 million.
Average revenue per unique (ARPU) moved up 47% year over year to $4.53. U.S. ARPU increased 59% to $7.87, whereas International ARPU climbed 40% on a year-over-year basis to $1.73.
RDDT's Operating Details
Non-GAAP sales and marketing expenses increased 68.8% year over year to $120.6 million. Research and development expenses rose 37.7% year over year to $196.6 million, while general and administrative expenses increased 0.4% year over year to $68.8 million.
Second-quarter 2025 adjusted EBITDA was $167 million, up from $40 million reported in the year-ago quarter.
RDDT’s Balance Sheet & Cash Flow
As of June 30, 2025, Reddit had cash and cash equivalents, including marketable securities, of $2.06 billion compared with $1.95 billion as of March 31, 2025.
In the second quarter, the company generated $111 million in cash from operating activities compared with $127.6 million in the previous quarter. Reddit reported a free cash flow of $111 million compared with $126.6 million in the previous quarter.
Reddit Initiates Q3 Guidance
For the third quarter of 2025, RDDT expects revenues between $535 million and $545 million. The Zacks Consensus Estimate for third-quarter revenues is pegged at $472.41 million, indicating a 35.61% increase year over year.
The consensus mark for earnings is pinned at 32 cents per share, which has remained unchanged over the past 60 days. The figure indicates a 100% year-over-year increase.
Adjusted EBITDA is expected by RDDT to be between $185 million and $195 million for the third quarter.
Zacks Rank & Stocks to Consider
Currently, Reddit carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Arista Networks ANET, Bumble BMBL and Lumentum LITE, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Arista Networks have gained 11.5% year to date. Arista Networks is set to report second-quarter 2025 results on Aug. 5.
Shares of Bumble have lost 4.5% year to date. Bumble is slated to report second-quarter 2025 results on Aug. 6.
Shares of Lumentum have jumped 31.1% year to date. Lumentum is set to report fourth-quarter fiscal 2025 results on Aug. 12.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpArista Networks, Inc. (ANET) : Free Stock Analysis Report
Lumentum Holdings Inc. (LITE) : Free Stock Analysis Report
Bumble Inc. (BMBL) : Free Stock Analysis Report
Reddit Inc. (RDDT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
