Reddit Stock Rockets 25% Weekly Toward $200 on Record Earnings and Outlook
Investor excitement was rekindled by Reddit's second-quarter earnings, which sent shares skyrocketing and indicating a fresh ascent for...
Quick overview
- Reddit's Q2 2025 earnings report showed a record revenue surge of 78% YoY, reaching $500 million, primarily driven by digital advertising.
- The company's stock price jumped 18% to $198.18 following the announcement, reflecting renewed investor optimism and a bullish trend.
- Reddit's international user base now accounts for over 50% of daily active users, highlighting its successful global expansion efforts.
- With strong Q3 guidance and a net profit of $89 million, Reddit is positioning itself as a compelling growth story in the social media landscape.
Investor excitement was rekindled by Reddit’s second-quarter earnings, which sent shares skyrocketing and indicating a fresh ascent for the social media network.
Q2 Earnings Spark Rally
Reddit, Inc. (NASDAQ: RDDT) delivered record-breaking Q2 2025 earnings, triggering an 18% surge in its stock to $198.18, after touching $195.91 intraday. The strong performance reflects Reddit’s pivot to profitability, fueled by AI-driven advertising innovations and expanding international operations.
The company is quickly evolving from a U.S.-centric platform to a global digital advertising powerhouse, with record user engagement and surging ad revenue. Robust Q3 guidance further reinforces Reddit’s status as one of the most compelling growth stories in social media.
From IPO Volatility to Renewed Momentum
Reddit’s March 2024 IPO priced shares at $34, and early trading was dominated by retail enthusiasm and data monetization potential, sending the stock to $230 in February 2025—a 680% gain.
RDDT Chart Daily – Leaving Behind the 200 SMA
The rally, however, was interrupted after Q4 2024 results. Despite profitability exceeding forecasts, user growth missed expectations, causing a steep decline to $80 by April. For months, the 200-day SMA (purple) acted as resistance until June, when the stock broke out after Reddit unveiled new advertising tools at the Cannes Lions Festival.
Reddit Q2 2025 Earnings Show Explosive Growth
Financial Performance
- Revenue Surge: Total revenue rose 78% YoY to $500 million, fueled primarily by digital advertising.
- Ad Revenue Growth: AI-powered ad optimization boosted ad revenue by 84% YoY to $465 million, reinforcing Reddit’s position in the online ad market.
- Profitability Milestone: The company swung to a net profit of $89 million, reversing a loss from the prior year.
Margins & Cash Flow
- Gross margin: A record 90.8%, signaling highly efficient monetization.
- Operating cash flow: $111 million, further strengthening Reddit’s balance sheet.
User and Market Expansion
- Daily Active Users (DAUq): Grew 21% to 110.4 million, reflecting strong engagement.
- International Shift: 50.41% of DAUs are now international, driven by market entries in France and Brazil and machine translation in 23 languages.
- International Revenue: Rose 71% YoY, slightly below domestic ad growth at 79%, but marks progress in revenue diversification.
Forward Guidance
- Q3 Revenue Guidance: Projected between $535M–$545M.
- Adjusted EBITDA: Forecast at $185M–$195M, suggesting continued operating leverage as scale improves.
Technical Turnaround and Market Impact
Over the last two days, RDDT surged 26% from $150 to $190, reaffirming its bullish trend. The 200 SMA has now flipped into support, while the company’s market capitalization rose to $35.11 billion after the earnings-driven spike.
With tech-powered monetization, international expansion, and a resilient user base, Reddit is demonstrating that it can recover from post-IPO volatility and reassert itself as a high-growth player in the digital ad space.
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