Reddit CFO Drew Vollero’s remarks regarding U.S. growth have been incorporated into this report.
After the social media platform’s first-quarter daily active users, revenue, and earnings exceeded Wall Street’s projections, Reddit Inc. shares increased 6.4% in premarket trade on Friday.
In its first-quarter statistics released late Thursday, the San Francisco-based company’s (RDDT) daily active unique users increased 31% year over year to 108.1 million. FactSet polled analysts to find 107.3 million daily active users.
In sharp contrast, the company’s shares dropped the previous quarter when the daily-active-unique-users figure fell short of Wall Street’s forecast.
According to Reddit, a daily active unique user is someone who has visited a page on the Reddit website or used a Reddit application at least once in a 24-hour period and who the firm can identify with a unique identifier.
The number of daily active unique users in the U.S. increased 21% to 50.1 million during the quarter, while the number of daily active unique users in other countries increased 41% to 58 million.
Using the example of well-known platforms like Facebook, owned by Meta Platforms Inc. (META), which has over 100 million daily active unique users in the United States, Reddit Chief Financial Officer Drew Vollero told MarketWatch that the firm has plenty of room to increase its U.S. user base.
“There’s certainly headroom in the U.S., for sure,” he stated. “How we’re attacking it is things like onboarding, making it simple.” Vollero also emphasized items like Reddit Answers, an AI-powered tool that helps users find what they’re looking for, and search.
The company’s expansion of machine translation, or translating material for audiences throughout the world, to 13 languages from eight last quarter was mentioned by the CFO as an example of its international efforts.
He noted that Reddit has introduced Polish, Thai, Vietnamese, and a kind of Latin American Spanish. “Historically, international has been the fastest grower for use over the last couple of quarters – there’s a nice tailwind with Machine Translation,” he said.
Chief Executive Steve Huffman stated that the firm is improving Reddit search and integrating it across the platform on a conference call to discuss the findings.
Since going public in March 2024, Reddit has had three quarterly profits under GAAP. Following a net loss of $575.1 million, or $8.19 per share, in the same period last year, the firm posted net income of $26.2 million, or 13 cents per share. According to a FactSet survey, analysts anticipated earnings of two cents per share.
The company’s revenue above the FactSet consensus estimate of $370 million by 61%, reaching $392.4 million. Additionally, ad income rose 61% to $358.6 million.
The gross margin increased from 88.6% to 90.5% over the same time previous year.
Reddit anticipates revenue for the second quarter of between $410 million and $430 million, which is higher than the $392 million FactSet average forecast. This indicates that the company’s advertising business is doing well. However, due to worries that advertising may be negatively impacted by macroeconomic uncertainty, Snapchat parent company Snap Inc. (SNAP) did not provide current-quarter forecast in its first-quarter results this week.
Despite the market’s high level of volatility, Reddit’s Chief Operating Officer Jen Wong stated on the conference call that “so far, it’s business as usual.”
“At times like this that are volatile or uncertain, Reddit is a really important resource,” Wong stated. “[People] come to Reddit to navigate that.”
The company anticipates $110 million to $130 million in adjusted earnings before interest, taxes, depreciation, and amortization.
Since Reddit’s IPO last year, the company’s shares have increased by 158.2%. In 2025, the stock has dropped 27.3%, while the benchmark S&P 500 index has declined 4.7%.
