New York, NY – Reddit, the popular online forum and social news aggregation platform, has announced a significant milestone, surpassing 100 million daily active users (DAUq) for the first time. This represents a 39% year-over-year increase, signaling robust growth for the platform. However, this achievement was overshadowed by the fact that the figure fell slightly short of Wall Street’s projected 103.1 million DAUq, leading to a dip in the company’s stock price.
The company’s financial performance in the fourth quarter of 2024 showed impressive gains. Revenue surged by 71% year-over-year, reaching $427.7 million. Net income also saw a substantial boost, hitting $71 million, representing a profit margin of 16.6%. Furthermore, Reddit boasted a strong gross profit margin of 92.6% for the fourth quarter and 90.5% for the entire year.
The primary driver of Reddit’s revenue growth was advertising, which experienced an 82% increase in the fourth quarter of 2024. This highlights the platform’s increasing effectiveness in attracting advertisers and monetizing its user base.
Despite the positive financial results, the slight miss in DAUq expectations triggered a negative reaction from investors, resulting in a more than 6% drop in Reddit’s stock price on Thursday.
Reddit CEO Steve Huffman addressed the user growth shortfall, attributing it partly to fluctuations in Google search traffic. In a letter to shareholders, Huffman explained that the platform experienced volatility in Google search referrals during the latter part of the fourth quarter due to periodic algorithm adjustments. He emphasized that such fluctuations are not uncommon, particularly affecting the number of unregistered users.
Referral traffic from search engines is subject to fluctuations, especially impacting the number of unregistered users, Huffman stated.
However, Huffman assured investors that Reddit has adapted to the algorithm changes and that traffic has already rebounded in the first quarter of 2025.
Looking ahead, Reddit plans to continue investing in its products and platform to attract and retain users. The company also intends to introduce new features and products in 2025 to further fuel its growth trajectory.
While the missed DAUq target caused a temporary setback, Reddit’s strong financial performance and proactive approach to adapting to search engine algorithm changes suggest a promising outlook for the platform’s continued growth and development. The company’s focus on enhancing user experience and expanding its offerings could potentially drive further user acquisition and engagement in the coming years.
References:
- IT之家. (2025, February 13). Reddit 日活用户数首次破 1 亿，但仍未达到华尔街预期 [Reddit’s Daily Active Users Surpass 100 Million for the First Time, But Still Fall Short of Wall Street Expectations]. Retrieved from [Insert original article URL here]
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