Overview
- Reddit reported $663 million in first‑quarter revenue, up 69% year over year, with $204 million in net income and it raised guidance after the results topped forecasts.
- CEO Steve Huffman said AI needs Reddit’s 25 billion posts and comments, hinting at tougher terms when Google and OpenAI licensing agreements come up for renewal in 2027.
- The company guided second‑quarter revenue to $715 million to $725 million and projected adjusted EBITDA of $285 million to $295 million, reflecting strong operating leverage.
- Reddit’s AI‑driven ad tools are boosting results as the Reddit Max campaign product cut average cost per action by 17% and lifted conversions by 25%, while active advertisers grew more than 75%.
- Bullish voices, including Jim Cramer, say AI‑enhanced ads, high margins, and data licensing could drive a re‑rating, though slower daily active user growth remains a key risk that Reddit aims to counter with faster apps, better onboarding, and smarter feeds.