Reddit Exceeds Revenue and Earnings Estimates with Strong Guidance
Reddit reported second-quarter earnings that significantly exceeded both revenue and profit expectations. The company's sales rose by 61% year-over-year to $805 million, surpassing the estimated $730 million. Net income climbed to $253 million, or $1.25 per share, up from $89 million in the prior year. Reddit also issued strong guidance for Q3 revenue between $860 million and $870 million, well above analyst expectations of $828 million. The company's user base grew to 130.3 million daily active users globally, with U.S.-specific DAU rising by 6%. Reddit attributed its strong performance to overseas expansion, new user growth, and improvements in ad monetization. However, CEO Steve Huffman noted volatility in search referral traffic from Google as a concern. Despite the positive results, investors remain cautious about long-term monetization challenges related to declining referrals from AI-driven services like Gemini.
