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Reddit Surpasses Earnings Estimates Despite User Growth Dip

2/13/2025

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Summary

Story summary

Reddit (RDDT) posted Q4 earnings of $0.36 per share, surpassing estimates of $0.24, with revenue at $427.7 million, a 71% increase year-over-year.
Daily active users totaled 101.7 million, falling short of the 103 million target, leading to a 15% drop in after-hours shares.
CEO Steve Huffman attributed user growth fluctuations to a Google algorithm change but remains optimistic for Q1 recovery.

History

Historical Context

Reddit's recent earnings report reflects a broader trend in social media's reliance on algorithms. Similar to Facebook's struggles post-2016 elections, algorithm changes can drastically impact user engagement. As platforms prioritize content for profit, user experience fluctuates, leading to financial volatility and user dissatisfaction.

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Story summary

Reddit (RDDT) posted Q4 earnings of $0.36 per share, surpassing estimates of $0.24, with revenue at $427.7 million, a 71% increase year-over-year.
Daily active users totaled 101.7 million, falling short of the 103 million target, leading to a 15% drop in after-hours shares.
CEO Steve Huffman attributed user growth fluctuations to a Google algorithm change but remains optimistic for Q1 recovery.

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