Reddit reports $500 million revenue, 78% growth in Q2 2025 earnings

Reddit announced second quarter 2025 financial results on July 31, 2025, delivering substantial revenue growth and achieving GAAP profitability. The social media platform reported $500 million in total revenue, representing a 78% increase compared to the same period in 2024.

The company's quarterly performance exceeded expectations across multiple metrics. Net income reached $89 million, marking an 18% net margin and a significant improvement from the $10 million net loss reported in Q2 2024. Basic earnings per share came in at $0.48, while diluted earnings per share reached $0.45.

Daily Active Uniques (DAUq) grew 21% year-over-year to 110.4 million users in the second quarter. The user base expansion contributed to increased engagement, with Weekly Active Uniques (WAUq) averaging 416.4 million, up 22% from the prior year. International users drove particularly strong growth, with international DAUq increasing 32% year-over-year while US DAUq grew 11%.

Advertising revenue, which comprises the majority of Reddit's business, increased 84% year-over-year to $465 million. According to the company's shareholder letter, "advertising revenue growth was driven by year-over-year growth in impressions and pricing." Other revenue sources contributed $35 million, growing 24% year-over-year.

Reddit's gross margin expanded to 90.8%, an improvement of 130 basis points from the prior year's 89.5%. This margin improvement demonstrates the platform's ability to scale efficiently while managing costs. Adjusted EBITDA reached $167 million, representing a 33% margin and an improvement of $127 million from Q2 2024.

Cash generation remained strong throughout the quarter. Operating cash flow totaled $111 million, an improvement of $83 million from the prior year. Free cash flow matched operating cash flow at $111 million, reflecting minimal capital expenditures of just $0.5 million, representing 0.1% of revenue.

The company's balance sheet strengthened during the quarter. Cash, cash equivalents, and marketable securities totaled $2.06 billion as of June 30, 2025. Total fully diluted shares outstanding reached 206.6 million, up 0.3% from the prior quarter, indicating disciplined share count management.

Geographic revenue distribution showed balanced growth. US revenue increased 79% year-over-year to $409 million, while international revenue grew 71% year-over-year to $91 million. The international growth reflects Reddit's machine translation efforts, which now support 23 languages across Asia Pacific, Europe, and Latin America.

Reddit's search functionality gained traction during the quarter. Over 70 million Weekly Active Uniques searched on Reddit in Q2, while Reddit Answers reached 6 million WAUq, representing a five-fold increase from the prior quarter. This growth demonstrates the platform's evolution into a search destination for authentic, human-generated content.

The platform's advertising technology continued advancing with new product launches. Conversation Summary Add-ons leveraged artificial intelligence to surface positive Reddit conversations directly below advertisements, providing built-in social proof. Early results showed advertisers experiencing 10% higher click-through rates compared to standard image advertisements.

Shopping advertisements emerged as a performance driver for the platform. According to the earnings report, Shopping Ad campaigns delivered 2X higher Return on Ad Spend compared to conversion campaigns. The number of product catalogs hosted on Reddit increased 4X year-over-year, indicating growing retailer adoption.

Reddit's position in the artificial intelligence ecosystem strengthened during the quarter. The company noted it has become the most cited domain for AI across all models, per data collected by Profound. CEO Steve Huffman emphasized in the shareholder letter that "Reddit is the #1 most cited domain for AI across all models."

International expansion accelerated through machine translation capabilities. Focus markets including France, Spain, and Brazil drove over half of international DAUq growth in Q2. The company aims to make Reddit self-sustaining in these markets through localized content, app experiences, and moderator recruitment.

Revenue per user metrics improved across all geographies. Global Average Revenue Per Unique (ARPU) reached $4.53, an increase of 47% year-over-year. US ARPU grew 59% to $7.87, while international ARPU increased 40% to $1.73, indicating monetization progress in newer markets.

The company provided guidance for the third quarter of 2025. Revenue is expected to range between $535 million and $545 million, while Adjusted EBITDA is projected between $185 million and $195 million. This guidance suggests continued strong growth and improving profitability trends.

Reddit's advertising business benefited from its unique position as a community-driven platform. With over 100,000 active communities, the platform offers advertisers access to highly engaged audiences discussing specific topics. The company emphasized that 40% of posts are commercial in nature, making it a natural destination for purchase-minded audiences.

The second quarter results reflect Reddit's strategic focus on three key areas: improving the core product experience, developing search capabilities, and expanding internationally. The company announced it would deprioritize certain initiatives, including user economy features, to concentrate resources on these growth drivers.

Reddit's twenty-year anniversary occurred during the quarter, marking a milestone for the platform that began in 2005. The company has evolved from a simple link-sharing site to a major social media platform with significant influence on internet culture and discourse.

Wall Street appeared to view the results favorably, with the company demonstrating sustainable profitability and strong user growth. The combination of advertising revenue growth, margin expansion, and positive cash generation positions Reddit as a maturing digital platform capable of competing with established social media companies.

Looking ahead, Reddit faces opportunities to further monetize its user base while maintaining the authentic community discussions that differentiate it from other social platforms. The company's emphasis on human conversation and knowledge sharing aligns with growing demand for trustworthy information sources in an increasingly automated digital landscape.

Timeline

• Q2 2024: Reddit reports Q2 2024 results with 54% revenue growth, reaching $281.2 million with 91.2 million DAUq (August 2024)
• Q1 2024: Reddit reports strong user growth and revenue increase in Q1 2024, achieving $243 million revenue and positive Adjusted EBITDA (May 2024)
• Q1 2025: Reddit's ad revenue soars 61% in Q1 as platform navigates Google relationship, reaching $358.6 million in advertising revenue (May 2025)
• July 1, 2025: Reddit introduces optimization scoring and personalized recommendations for Ads with AI-powered campaign optimization features
• July 21, 2025: Google Analytics enables direct Reddit Ads cost data tracking integration, streamlining cross-platform campaign measurement
• July 31, 2025: Reddit announces Q2 2025 financial results with $500 million revenue and $89 million net income
• August 7, 2025: Reddit introduces arbitration and class action waivers in updated advertising terms, implementing binding arbitration for disputes

Summary

Who: Reddit Inc. (NYSE: RDDT), led by Co-Founder and CEO Steve Huffman and Chief Financial Officer Drew Vollero, reported financial results to shareholders and the investment community.

What: Reddit announced Q2 2025 earnings showing $500 million revenue (78% year-over-year growth), $89 million net income (18% margin), 110.4 million Daily Active Uniques (21% growth), and $465 million advertising revenue (84% growth).

When: The financial results were announced on July 31, 2025, covering the quarter ended June 30, 2025, with an earnings conference call held at 2:00 p.m. PT / 5:00 p.m. ET.

Where: The earnings announcement was made from San Francisco, with results distributed through Reddit's Investor Relations website and the r/RDDT subreddit, covering Reddit's global operations across the US, international markets, and 23 languages.

Why: The strong financial performance demonstrates Reddit's successful transformation into a profitable social media platform, driven by advertising revenue growth, user base expansion, improved monetization capabilities, and strategic focus on core product development, search functionality, and international expansion.

Key Terms Explained

Revenue

Revenue represents the total income generated by Reddit from all business activities during the quarter. The company's $500 million in Q2 2025 revenue reflects a 78% year-over-year increase, demonstrating strong business momentum. Revenue composition includes advertising income, data licensing agreements, and other monetization streams. This metric serves as the primary indicator of Reddit's commercial success and market acceptance of its advertising platform.

Advertising

Advertising constitutes Reddit's primary revenue stream, generating $465 million in Q2 2025, representing 93% of total revenue. The platform's advertising business grew 84% year-over-year, driven by increased impressions and pricing improvements. Reddit's unique community-driven advertising environment allows brands to engage with highly targeted audiences across specific interest-based subreddits, creating valuable marketing opportunities for advertisers seeking authentic consumer engagement.

Growth

Growth encompasses multiple dimensions of Reddit's expansion, including user acquisition, revenue increases, and market penetration. The platform demonstrated consistent growth across key metrics: 21% DAUq growth, 78% revenue growth, and 84% advertising revenue growth. This comprehensive growth pattern indicates Reddit's successful scaling across both user engagement and monetization capabilities, positioning the company for continued market share expansion.

Users

Users represent Reddit's community of active participants who drive platform engagement and content creation. Daily Active Uniques reached 110.4 million in Q2 2025, growing 21% year-over-year. The user base spans both logged-in and logged-out visitors, with international users showing particularly strong 32% growth. Reddit's diverse user community across 100,000+ active communities creates the foundation for its advertising value proposition.

Quarter

Quarter refers to the three-month reporting period ending June 30, 2025, representing Reddit's second fiscal quarter of 2025. Quarterly reporting provides investors and stakeholders with regular performance updates, enabling assessment of business trends and strategic progress. The Q2 2025 quarter demonstrated Reddit's strongest financial performance to date, with GAAP profitability and record revenue generation.

Platform

Platform describes Reddit's comprehensive technology infrastructure and service ecosystem that supports community interactions, content sharing, and advertising delivery. The platform encompasses web and mobile applications, advertising tools, search functionality, and community management systems. Reddit's platform differentiation lies in its community-centric model, contrasting with algorithm-driven social media competitors.

International

International represents Reddit's expansion beyond its US home market into global territories. International DAUq grew 32% year-over-year, driven by machine translation capabilities supporting 23 languages. International revenue reached $91 million in Q2 2025, growing 71% year-over-year. Geographic diversification reduces Reddit's dependence on US markets while expanding total addressable market opportunities.

Million

Million appears throughout financial metrics, representing the scale of Reddit's business operations. Key million-dollar figures include $500 million revenue, $465 million advertising revenue, $89 million net income, and 110.4 million daily active users. These million-scale metrics demonstrate Reddit's evolution from startup to major technology company with substantial financial impact and user reach.

Company

Company refers to Reddit Inc., the publicly traded corporation operating the Reddit platform and related services. The company went public in March 2024 and trades on NYSE under ticker RDDT. Reddit's corporate structure includes multiple geographic entities serving different markets, with headquarters in San Francisco and operations spanning global markets through localized subsidiaries.

Year

Year provides temporal context for performance comparisons, with "year-over-year" serving as the primary benchmark for growth measurement. The year-over-year framework enables investors to assess Reddit's progress against historical performance while accounting for seasonal variations. Reddit's consistent year-over-year growth across multiple metrics indicates sustainable business momentum rather than temporary fluctuations.