Reddit shares slump after management warns of search traffic volatility despite strong earnings beat Reddit Inc (NYSE:RDDT) shares fell about 21% on Friday morning after management warned of volatility in search traffic and raised concerns among investors about potential…
essure from artificial intelligence-powered search tools, despite reporting second quarter results that exceeded Wall Street expectations. The company reported Q2 revenue of $805 million, up 61% year-over-year and above analyst expectations of $730 million
Earnings per share came in at $1.25, compared with the consensus estimate of $0.95, while net income reached $253 million, more than double the prior-year period. Reddit’s adjusted EBITDA rose 106% year-over-year to $343 million, representing 43% of revenue, while operating cash flow increased 135% to $262 million. User growth remained strong on a global basis, with daily active uniques (DAUq) increasing 18% year-over-year to 130.3 million, while weekly active uniques (WAUq) rose 24% to 514.6 million.
However, US daily active users declined slightly sequentially to 53.2 million from 53.5 million in the prior quarter, contributing to investor concerns about domestic user growth. Revenue growth was driven largely by advertising, which increased 64% year-over-year to $762 million. Other revenue rose 24% to $43 million.