Reddit Posts Strong Q2 Earnings Despite Stock Drop
Reddit reported better-than-expected second-quarter results with revenue rising 61% to $805 million and net income nearly tripling to $283 million. The company's user base also grew significantly, reaching 514.6 million weekly active users—a 24% increase year-over-year—with daily active users up 18%. Despite the strong financial performance, Reddit’s stock fell more than 10% after hours due to market reaction. The results highlight a high-margin business model with an impressive net margin of 31%, and adjusted EBITDA growing by over 100% year-over-year. However, concerns remain about user engagement trends and the sustainability of rapid monetization growth, particularly in international markets compared to U.S. users. Reddit has consistently outperformed earnings estimates for five consecutive quarters, with its latest results showing a 30% beat on EPS expectations.
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