Key facts
- Reddit projects Q3 revenue between $860 million and $870 million, exceeding analyst expectations.
- The company reported a 61% year-over-year increase in Q2 revenue to $805 million.
- Advertiser growth reached 70% year-over-year in the second quarter.
- Global daily active unique visitors grew 18% from the previous year to 130.3 million.
- Reddit anticipates Q3 adjusted EBITDA between $385 million and $395 million.
Reddit anticipates its third-quarter revenue will surpass Wall Street's expectations, a positive signal for its strategy to attract advertisers through AI-enhanced tools. The company's advertising solutions aim to boost campaign performance by providing ad copy generation, performance tracking, and interest-based targeting within its platform's subreddit communities.
In the second quarter, Reddit saw a 70% year-over-year increase in advertisers, with significant growth among mid-market, small- and medium-sized businesses, and international clients. Global daily active unique visitors increased by 18% from the previous year to 130.3 million. However, the company experienced a sequential slowdown in U.S. daily active unique visitors, attributed by COO Jen Wong to 'SEO headwinds' from search algorithm changes that offset user acquisition efforts.
Despite these challenges, co-founder and CEO Steve Huffman stated that the commercial business remains strong. Reddit projects third-quarter revenue between $860 million and $870 million, exceeding the analyst consensus of $829.1 million. The company also forecasts adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the third quarter to be between $385 million and $395 million, also above analyst estimates of $369 million.