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Reddit (RDDT) Shares Up on Strong Q2 Earnings, Revenues Beat
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Reddit (RDDT - Free Report) shares have increased 1.06% since it reported second-quarter 2024 results. RDDT’s shares eventually closed at 54.94 on Aug 8.
It reported a second-quarter 2024 adjusted loss of 6 cents per share, beating the Zacks Consensus Estimate by 80.65%. Reddit reported a loss of 70 cents per share in the year-ago quarter.
Revenues of $281.2 million surpassed the Zacks Consensus Estimate by 9.73%. The figure rallied 53.6% year over year.
Ad revenues increased 41% year over year to $253.1 million. Other revenues surged 690% year over year to $28.1 million, driven by new data licensing agreements, including Google and OpenAI.
Daily Active Uniques (DAUq) jumped 51% year over year to 91.2 million. U.S. DAUq jumped 59% year over year to 45.5 million, while International DAUq increased 44% year over year to 45.7 million.
Weekly Active Uniques (WAUq) surged 57% year over year to 342.3 million. U.S. WAUq jumped 68% year over year to 167.5 million, while International WAUq increased 48% year over year to 174.8 million.
Average Revenue Per User (ARPU) moved up 2% year over year to $3.08. U.S. ARPU declined by 5% to $4.94, while International ARPU climbed 17% on a year-over-year basis to $1.24.
Second-quarter 2024 U.S. revenues (contributed 81% to revenues) increased 55% year over year to $228.1 million. International revenues (19% of revenues) rose 49% year over year to $53.1 million.
International daily active users exceeded 45 million, growing 44% year over year and 11% sequentially.
Operating Details
The gross margin was 89.5%, expanding 530 basis points year over year. The key drivers for growth in gross margins were operating efficiencies, low pricing and support from increasing revenues.
Adjusted EBITDA was $39.5 million in the reported quarter against adjusted EBITDA loss of $35.4 million in the year-ago quarter.
Sales & Marketing expenses increased year over year to $71.4 million against $59.2 million in the year-ago quarter.
Research & development expenses increased to $142.7 million from the year-ago quarter’s figure of $109.7 million.
General & Administrative expenses surged to $68.5 million from the year-ago quarter’s figure of $38.2 million.
Balance Sheet
As of Jun 30, 2024, Reddit had cash and cash equivalents, including marketable securities of $1.7 billion, unchanged sequentially.
In the second quarter, Reddit generated $28.4 million of cash from operating activities that compared with $32.1 million in the previous quarter.
RDDT posted a free cash flow of $27.2 million compared with $29.2 million reported in the previous quarter.
Guidance
For third-quarter 2024, RDDT expects revenues to be between $290 million and $310 million.
Adjusted EBITDA is expected to be between $40 million and $60 million.
Zacks Rank & Other Stocks to Consider
Currently, Reddit carries a Zacks Rank #2 (Buy).
RDDT’s shares have jumped up 9% year to date compared with the Zacks Computer & Technology sector’s increase of 14.1%.
Image: Bigstock
Reddit (RDDT) Shares Up on Strong Q2 Earnings, Revenues Beat
Reddit (RDDT - Free Report) shares have increased 1.06% since it reported second-quarter 2024 results. RDDT’s shares eventually closed at 54.94 on Aug 8.
It reported a second-quarter 2024 adjusted loss of 6 cents per share, beating the Zacks Consensus Estimate by 80.65%. Reddit reported a loss of 70 cents per share in the year-ago quarter.
Revenues of $281.2 million surpassed the Zacks Consensus Estimate by 9.73%. The figure rallied 53.6% year over year.
Ad revenues increased 41% year over year to $253.1 million. Other revenues surged 690% year over year to $28.1 million, driven by new data licensing agreements, including Google and OpenAI.
Reddit Inc. Price, Consensus and EPS Surprise
Reddit Inc. price-consensus-eps-surprise-chart | Reddit Inc. Quote
Daily Active Uniques (DAUq) jumped 51% year over year to 91.2 million. U.S. DAUq jumped 59% year over year to 45.5 million, while International DAUq increased 44% year over year to 45.7 million.
Weekly Active Uniques (WAUq) surged 57% year over year to 342.3 million. U.S. WAUq jumped 68% year over year to 167.5 million, while International WAUq increased 48% year over year to 174.8 million.
Average Revenue Per User (ARPU) moved up 2% year over year to $3.08. U.S. ARPU declined by 5% to $4.94, while International ARPU climbed 17% on a year-over-year basis to $1.24.
Second-quarter 2024 U.S. revenues (contributed 81% to revenues) increased 55% year over year to $228.1 million. International revenues (19% of revenues) rose 49% year over year to $53.1 million.
International daily active users exceeded 45 million, growing 44% year over year and 11% sequentially.
Operating Details
The gross margin was 89.5%, expanding 530 basis points year over year. The key drivers for growth in gross margins were operating efficiencies, low pricing and support from increasing revenues.
Adjusted EBITDA was $39.5 million in the reported quarter against adjusted EBITDA loss of $35.4 million in the year-ago quarter.
Sales & Marketing expenses increased year over year to $71.4 million against $59.2 million in the year-ago quarter.
Research & development expenses increased to $142.7 million from the year-ago quarter’s figure of $109.7 million.
General & Administrative expenses surged to $68.5 million from the year-ago quarter’s figure of $38.2 million.
Balance Sheet
As of Jun 30, 2024, Reddit had cash and cash equivalents, including marketable securities of $1.7 billion, unchanged sequentially.
In the second quarter, Reddit generated $28.4 million of cash from operating activities that compared with $32.1 million in the previous quarter.
RDDT posted a free cash flow of $27.2 million compared with $29.2 million reported in the previous quarter.
Guidance
For third-quarter 2024, RDDT expects revenues to be between $290 million and $310 million.
Adjusted EBITDA is expected to be between $40 million and $60 million.
Zacks Rank & Other Stocks to Consider
Currently, Reddit carries a Zacks Rank #2 (Buy).
RDDT’s shares have jumped up 9% year to date compared with the Zacks Computer & Technology sector’s increase of 14.1%.
Some better-ranked stocks from the broader sector are Bilibili (BILI - Free Report) , Cisco Systems (CSCO - Free Report) and Applied Materials (AMAT - Free Report) , each carrying Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bilibili’s shares have surged 19.9% year to date. BILI is set to report second-quarter 2024 results on Aug 22.
Cisco Systems’ shares have declined 9.2% year to date. CSCO is set to post fourth-quarter fiscal 2024 results on Aug 14.
Applied Materials’ shares have gained 17.6% year to date. AMAT is set to release third-quarter fiscal 2024 results on Aug 15.