Reddit Reports Explosive Q2 2025 Earnings with 78% Revenue Growth and Strong User Metrics
Reddit’s Q2 2025 Earnings Beat Expectations
Reddit, Inc. (NYSE: RDDT) announced its second-quarter financial results for 2025, showcasing impressive growth across key metrics. Revenue surged 78% year-over-year to $500 million, significantly surpassing Wall Street expectations by 17%, marking the largest earnings beat since Reddit went public.
Key Financial Highlights
- Net income of $89 million, a dramatic turnaround from a net loss of $10 million in Q2 2024.
- Adjusted EBITDA reached $167 million, or 33.4% of total revenue, up sharply from 14% the previous year.
- Gross margin expanded to 90.8%, an improvement of 130 basis points year-over-year.
- Operating cash flow reached $111 million, more than quadrupling from $28 million a year ago.
- Forecast for Q3 2025 revenue is $535 million to $545 million, exceeding analyst estimates of $473 million.
User Engagement and Growth
Reddit’s global daily active users (DAU) increased 21% year-over-year to 110.4 million, beating analyst estimates. The company split DAU into logged-in and logged-out users, with logged-in DAUs at 49.3 million (up 17%) and logged-out DAUs rising 24% to 61.1 million. Average revenue per user (ARPU) globally reached $4.53, well above the expected $3.90, driven by strong advertising revenue growth of 84% year-over-year.
Product Innovations and Strategy
CEO Steve Huffman highlighted the success of the AI-powered Reddit Answers tool, which grew from 1 million weekly users last quarter to 6 million, with plans for global expansion and deeper integration into Reddit’s search experience.
Huffman noted that despite Google’s generative AI features creating some headwinds, Reddit’s strong brand and user intent remain competitive advantages, with Reddit being one of the most searched terms on Google.
Looking Ahead
With robust Q2 results and an optimistic outlook, Reddit is positioning itself as a critical community-driven platform for knowledge and conversation on the evolving internet.
