Reddit, Inc. (RDDT) announced impressive third-quarter results for 2024, showcasing significant year-over-year growth across key financial and operational metrics.
The social media platform reported a 68% increase in revenue to $348.4 million, marking substantial gains driven by rising ad revenue and higher user engagement.
Reddit reached profitability with a net income of $29.9 million, a big improvement from last year’s net loss of $7.4 million.
Revenue and Profitability Highlights
Reddit’s revenue performance was fueled by a 56% rise in ad revenue to $315.1 million, complemented by a 547% surge in other revenue, totaling $33.2 million.
The company’s gross margin rose by 280 basis points from last year, reaching 90.1%. This led to an adjusted EBITDA of $94.1 million and a strong EBITDA margin of 27%, showing the platform’s focus on efficient operations.
CEO Steve Huffman praised the platform’s growth trajectory, noting,
It was another strong quarter for Reddit and our communities as we achieved important milestones, including new levels of user traffic, revenue growth, and profitability.”
The company’s enhanced advertising capabilities and product features, Huffman added, continue to set Reddit apart as a highly engaged platform.
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User Engagement and Operational Strength
Reddit’s daily active users (DAUq) grew 47% year-over-year to 97.2 million, showing strong growth in both U.S. and international markets. U.S. DAUq rose by 51%, while international DAUq grew by 44%, indicating Reddit’s expanding global reach.
Logged-in and logged-out users alike contributed to the growth, with a significant 70% increase in logged-out DAUs.
This surge in engagement helped elevate the company’s average revenue per user (ARPU), which rose 14% year-over-year to $3.58 globally.
Reddit’s financial health improves with $71.6 million in operating cash flow and $70.3 million in free cash flow.
With $1.75 billion in cash, equivalents, and marketable securities, Reddit is well-positioned to support its growth and operational plans.
Guidance and Future Outlook
Reddit forecasts Q4 2024 revenue of $385-$400 million and adjusted EBITDA of $110-$125 million.
Reddit’s management remains confident about its growth trajectory, aiming to capitalize on enhanced monetization strategies and a robust user base.
Reddit will review results and future plans in an investor call, inviting community questions on the r/RDDT subreddit.
Reddit strengthens its position as a top platform with strong engagement, steady ad growth, and new profitability, attracting advertisers and users alike.
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