Reddit Inc

Previous wording

•Daily Active Uniques (“DAUq”) were 82.7 million for the three months ended March 31, 2024, an increase of 37% year over year

Current wording

•Daily Active Uniques (“DAUq”) were 91.2 million for the three months ended June 30, 2024, an increase of 51% year over year

Previous wording

•Average revenue per unique (“ARPU”) was $2.94 for the three months ended March 31, 2024, an increase of 8% year over year

Current wording

•Average revenue per unique (“ARPU”) was $3.08 for the three months ended June 30, 2024, an increase of 2% year over year

Previous wording

•Net loss was $575.1 million for the three months ended March 31, 2024, as compared to a net loss of $60.9 million in the three months ended March 31, 2023

Current wording

•Net loss was $10.1 million for the three months ended June 30, 2024, as compared to a net loss of $41.1 million in the three months ended June 30, 2023

Previous wording

In the three months ended March 31, 2024, global DAUq grew 37% compared to the prior year period, driven by 45% growth in DAUq in the United States and 30% growth in DAUq in the rest of world. Global DAUq grew 13% compared to the prior quarter period, driven by 14% growth in DAUq in the United States and 12% growth in DAUq in the rest of world. The growth in global DAUq in the three months ended March 31, 2024 compared to the prior year period and prior quarter period was driven mainly by traction in our growth strategies, primarily from product enhancements, and continued momentum from third-party search engine and algorithm changes.

Current wording

In the three months ended June 30, 2024, global DAUq grew 51% compared to the prior year period, driven by 59% growth in DAUq in the United States and 44% growth in DAUq in the rest of world. Global DAUq grew 10% compared to the prior quarter period, driven by 10% growth in DAUq in the United States and 11% growth in DAUq in the rest of world. The growth in global DAUq in the three months ended June 30, 2024 compared to the prior year period and prior quarter period was driven mainly by the combination of third-party search engine and algorithm changes and traction in our growth strategies, primarily from product enhancements.

Previous wording

In the three months ended March 31, 2024, global WAUq grew 40% compared to the prior year period, driven by 53% growth in WAUq in the United States and 30% growth in WAUq in the rest of world. In the three months ended March 31, 2024, global WAUq increased 14% compared to the prior quarter period, driven by 15% growth in WAUq in the United States and 14% growth in WAUq in the rest of world. For the three months ended March 31, 2024, the proportion of DAUq to WAUq was 27%.

Current wording

In the three months ended June 30, 2024, global WAUq grew 57% compared to the prior year period, driven by 68% growth in WAUq in the United States and 48% growth in WAUq in the rest of world. In the three months ended June 30, 2024, global WAUq increased 12% compared to the prior quarter period, driven by 11% growth in WAUq in the United States and 13% growth in WAUq in the rest of world. For the three months ended June 30, 2024, the proportion of DAUq to WAUq was 27%.

Previous wording

We monetize our business primarily through advertising on our mobile applications and website. In the three months ended March 31, 2024, we recorded revenue of $243.0 million, as compared to revenue of $163.7 million for the three months ended March 31, 2023, representing an increase of 48% compared to the prior year period.

Current wording

We monetize our business primarily through advertising on our mobile applications and website. In the six months ended June 30, 2024, we recorded revenue of $524.1 million, as compared to revenue of $346.8 million for the six months ended June 30, 2023, representing an increase of 51% compared to the prior year period.

Previous wording

During the three months ended March 31, 2024, ARPU was $2.94, an increase of 8% compared to $2.72 for the prior year period, United States ARPU was $4.77, compared to $4.62 for the prior year period, and rest of world ARPU was $1.10, compared to $1.00 for the prior year period. The increase in global ARPU compared to the prior year period was driven primarily by an increase in data licensing revenue. The decline in global ARPU compared to the prior quarter period was due primarily to seasonality.

Current wording

During the three months ended June 30, 2024, ARPU was $3.08, an increase of 2% compared to $3.03 for the prior year period, United States ARPU was $4.94, compared to $5.21 for the prior year period, and rest of world ARPU was $1.24, compared to $1.06 for the prior year period. The increase in global ARPU compared to the prior year period was due primarily to an increase in advertising revenue driven by an increase in impressions delivered, partially offset by a decrease in pricing. The increase in global ARPU compared to the prior quarter period was due primarily to an increase in advertising revenue. Additionally, global ARPU increased in both periods as a result of data licensing agreements executed in 2024.

Previous wording

We use certain non-GAAP financial measures to supplement our consolidated financial statements, which are presented in accordance with U.S. GAAP, to evaluate our core operating performance. These non-GAAP financial measures include Adjusted EBITDA and Free Cash Flow. We use these non-GAAP financial measures to facilitate reviews of our operational performance and as a basis for strategic planning. By excluding certain items that are non-recurring or not reflective of the performance of our normal course of business, we believe that Adjusted EBITDA and Free Cash Flow provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow investors to supplement their understanding of our financial trends and evaluate our ongoing and future performance in the same manner as management. However, there are a number of limitations related to the use of non-GAAP financial measures as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP measures. These non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

Current wording

We use certain non-GAAP financial measures to supplement our consolidated financial statements, which are presented in accordance with U.S. GAAP, to evaluate our core operating performance. These non-GAAP financial measures include Adjusted EBITDA and Free Cash Flow. We use these non-GAAP financial measures to facilitate reviews of our operational performance and as a basis for strategic planning. By excluding certain items that are non-recurring or not reflective of the performance of our normal course of business, we believe that Adjusted EBITDA and Free Cash Flow provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow investors to supplement their understanding of our financial trends and evaluate our ongoing and future performance in the same manner as management. However, there are a number of limitations related to the use of non-GAAP financial measures as they reflect the exercise of judgment by our management about which expenses are included or excluded in determining these non-GAAP measures. These non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.

Previous wording

(3)During the three months ended March 31, 2023, we incurred restructuring costs of $3.9 million, primarily composed of severance and benefits expense. These charges are non-recurring and are not reflective of underlying trends in our business.

Current wording

(3)During the three and six months ended June 30, 2023, we incurred restructuring costs of $4.2 million and$8.1 million, respectively, primarily composed of severance and benefits expense. These charges are non-recurring and are not reflective of underlying trends in our business.

Previous wording

Revenue increased $79.2 million, or 48%, compared to the prior year. The growth in revenue was due primarily to an increase in advertising revenue driven by an increase in impressions delivered, partially offset by a decrease in pricing. In addition, other revenues increased as a result of data licensing agreements executed in 2024.

Current wording

Revenue for the three and six months ended June 30, 2024 increased by $98.2 million and $177.4 million, or 54% and 51%, respectively, compared to the prior year periods. The growth in revenue was due primarily to an increase in advertising revenue driven by an increase in impressions delivered, partially offset by a decrease in pricing. In addition, other revenues increased as a result of data licensing agreements executed in 2024.

Previous wording

Cost of revenue increased $0.8 million, or 3%, compared to the prior year. The increase in cost of revenue was primarily attributable to increased hosting usage to support user growth on our platform and an increase in advertising measurement and other services, partially offset by hosting cost efficiencies and lower hosting prices.

Current wording

Cost of revenue for the three and six months ended June 30, 2024 increased by $0.7 million and $1.4 million, or 2% and 3%, respectively, compared to the prior year periods. The increase in cost of revenue was primarily attributable to increased hosting usage to support user growth on our platform and an increase in advertising measurement and other services, partially offset by hosting cost efficiencies and lower hosting prices.

Previous wording

Other income (expense), net for the three months ended March 31, 2024 was $14.6 million compared to $10.7 million in the prior year. The increase was primarily due to higher interest earned on our cash and investments driven by higher interest rates.

Current wording

Other income (expense), net for the three and six months ended June 30, 2024 increased by $7.4 million and $11.2 million, or 56% and 47%, respectively, compared to the prior year periods. The increase in both periods was primarily due to higher interest earned on our cash and investments driven by higher interest rates and a higher invested balance.

Previous wording

Income tax expense (benefit) for the three months ended March 31, 2024 was $0.4 million compared to $1.0 million in the prior year. The decrease in income tax expense for the three months ended March 31, 2024 was primarily attributable to the increase in net loss in the current period.

Current wording

Income tax expense (benefit) for the three and six months ended June 30, 2024 was $(0.2) million and $0.1 million, respectively, compared to $1.4 million and $2.4 million in the respective prior year periods. The decrease in income tax expense for the three months ended June 30, 2024 was primarily attributable to tax benefits recognized in our foreign subsidiaries. The decrease in income tax expense for the six months ended June 30, 2024 was primarily attributable to a decrease in taxable income in the current period.

Previous wording

As of March 31, 2024, we had $1.7 billion in cash, cash equivalents, and marketable securities. Our cash and cash equivalents consist of cash in bank accounts, money market accounts, and other highly liquid investments with original maturities of 90 days or less from the date of purchase. Marketable securities consist of U.S. and non-U.S. government securities, investment-grade corporate and government agency securities, certificates of deposit, and commercial paper. As of March 31, 2024, approximately 1% of our cash, cash equivalents, and marketable securities was held outside of the United States.

Current wording

As of June 30, 2024, we had $1.7 billion in cash, cash equivalents, and marketable securities. Our cash and cash equivalents consist of cash in bank accounts, money market accounts, and other highly liquid investments with original maturities of 90 days or less from the date of purchase. Marketable securities consist of U.S. and non-U.S. government securities, investment-grade corporate and government agency securities, certificates of deposit, and commercial paper. As of June 30, 2024, approximately 3% of our cash, cash equivalents, and marketable securities was held outside of the United States.

Previous wording

On May 23, 2023, we amended the terms of the Revolving Credit Facility to replace LIBOR with Term SOFR as the interest rate benchmark. Under the amended terms of the Revolving Credit Facility, borrowings can be either ABR Loans, Term Benchmark Loans, or SONIA Loans. Outstanding ABR Loans bear interest at a rate equal to the greatest of (A) the Prime Rate, (B) the NYFRB Rate plus 0.5%, (C) the Adjusted Term SOFR Rate plus 1.0%, or (D) 1.0% (each as defined in the amended Revolving Credit Facility), in each case plus 0.25%. Outstanding Term Benchmark Loans bear interest at the Adjusted Term SOFR Rate, the Adjusted EURIBOR Rate, the Adjusted AUD Rate, or the Adjusted CDOR Rate (each as defined in the amended Revolving Credit Facility), as applicable, in each case, plus 1.25%. Outstanding SONIA Loans bear interest at a rate equal to the Adjusted Daily Simple SONIA (as such term is defined in the amended Revolving Credit Facility) plus 1.25%. We are required to pay a quarterly commitment fee that accrues at 0.15% per annum on the unused portion of the aggregate commitments under the credit facility.

Current wording

On May 23, 2023, we amended the terms of the Revolving Credit Facility to replace LIBOR with Term SOFR as the interest rate benchmark. Under the amended terms of the Revolving Credit Facility, borrowings can be either ABR Loans, Term Benchmark Loans, or SONIA Loans. Outstanding ABR Loans bear interest at a rate equal to the greatest of (A) the Prime Rate, (B) the NYFRB Rate plus 0.5%, (C) the Adjusted Term SOFR Rate plus 1.0%, or (D) 1.0% (each as defined in the amended Revolving Credit Facility), in each case plus 0.25%. Outstanding Term Benchmark Loans bear interest at the Adjusted Term SOFR Rate, the Adjusted EURIBOR Rate, or the Adjusted AUD Rate (each as defined in the amended Revolving Credit Facility), as applicable, in each case, plus 1.25%. Outstanding SONIA Loans bear interest at a rate equal to the Adjusted Daily Simple SONIA (as such term is defined in the amended Revolving Credit Facility) plus 1.25%. We are required to pay a quarterly commitment fee that accrues at 0.15% per annum on the unused portion of the aggregate commitments under the credit facility.

Previous wording

Net cash provided by operating activities was $32.1 million in the three months ended March 31, 2024, resulting primarily from a decrease in accounts receivable of $30.0 million due to the timing of cash collections, an increase in accrued expenses and other current liabilities of $18.9 million due to the timing of payments, and adjustments for non-cash items, primarily related to stock-based compensation expense of $577.5 million. These increases were partially offset by net loss of $(575.1) million in the three months ended March 31, 2024 and an increase in prepaid expenses and other assets of $13.9 million. Net cash provided by operating activities was $4.1 million in the three months ended March 31, 2023, resulting primarily from a decrease in accounts receivable of $33.7 million due to the timing of cash collections, an increase in accounts payable and accrued expenses and other current liabilities of $19.1 million due to timing of payments, and adjustments for non-cash items, primarily related to stock-based compensation expense of $12.5 million. These increases were partially offset by net loss of $(60.9) million in the three months ended March 31, 2023.

Current wording

Net cash provided by operating activities was $60.4 million in the six months ended June 30, 2024, resulting primarily from an increase in accounts payable and accrued expenses and other current liabilities of $28.9 million due to the timing of payments, and adjustments for non-cash items, primarily related to stock-based compensation expense of $641.8 million. These increases were partially offset by net loss of $(585.2) million in the six months ended June 30, 2024 and an increase in prepaid expenses and other assets of $20.2 million. Net cash used in operating activities was $(50.0) million in the six months ended June 30, 2023, resulting primarily from net loss of $(102.0) million, partially offset by a decrease in accounts receivable of $24.9 million and adjustments for non-cash items, primarily related to stock-based compensation expense of $22.6 million.

Previous wording

Net cash provided by investing activities was $114.1 million in the three months ended March 31, 2024, primarily due to maturities of marketable securities of $252.7 million, partially offset by additional purchases of marketable securities of $135.7 million. Net cash provided by investing activities was $89.0 million in the three months ended March 31, 2023, primarily due to maturities and proceeds from the sale of marketable securities of $352.2 million partially offset by purchases of marketable securities of $262.8 million.

Current wording

Net cash used in investing activities was $(405.5) million in the six months ended June 30, 2024, primarily due to additional purchases of marketable securities of $997.5 million, partially offset by maturities of marketable securities of $596.1 million. Net cash provided by investing activities was $57.1 million in the six months ended June 30, 2023, primarily due to maturities and proceeds from the sale of marketable securities of $672.4 million partially offset by purchases of marketable securities of $614.2 million.

Previous wording

Net cash provided by financing activities was $421.2 million in the three months ended March 31, 2024 and consisted primarily of cash proceeds from issuance of class A common stock in our initial public offering, net of underwriting discounts and commissions, of $600.0 million and proceeds from exercises of employee stock options of $23.1 million, partially offset by cash payments of $194.7 million for taxes related to net share settlement of restricted stock units. Net cash used in financing activities was $(3.6) million in the three months ended March 31, 2023 and consisted primarily of taxes paid related to net share settlement of restricted stock units of $4.2 million, partially offset by proceeds from exercises of employee stock options of $1.0 million.

Current wording

Net cash provided by financing activities was $411.9 million in the six months ended June 30, 2024 and consisted primarily of cash proceeds from the issuance of class A common stock in our initial public offering, net of underwriting discounts and commissions, of $600.0 million and proceeds from exercises of employee stock options of $24.9 million, partially offset by cash payments for taxes related to net share settlement of restricted stock units of $202.3 million. Net cash used in financing activities was $(3.3) million in the six months ended June 30, 2023 and consisted primarily of taxes paid related to net share settlement of restricted stock units of $4.2 million, partially offset by proceeds from exercises of employee stock options of $1.8 million.

Previous wording

Free Cash Flow was $29.2 million and $3.7 million for the three months ended March 31, 2024 and 2023, respectively, and was composed of net cash provided by operating activities, resulting primarily from changes in working capital and adjustments for non-cash items, partially offset by net loss. Free Cash Flow also included purchases of property and equipment of $2.9 million and $0.4 million for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, the increase in Free Cash Flow as compared to the prior year was driven primarily by the increase in cash provided by operating activities.

Current wording

Free Cash Flow was $56.4 million for the six months ended June 30, 2024, and was composed of net cash provided by operating activities, resulting primarily from changes in working capital and adjustments for non-cash items, partially offset by net loss. Free Cash Flow was $(51.2) million for the six months ended June 30, 2023, and was composed of net cash used in operating activities, resulting primarily from net loss, partially offset by changes in working capital and adjustments for non-cash items. Free Cash Flow also included purchases of property and equipment of $4.1 million and $1.2 million for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, the increase in Free Cash Flow as compared to the prior year was driven primarily by the increase in cash provided by operating activities.

Previous wording

We have non-cancellable contractual obligations and commitments primarily related to third-party cloud infrastructure agreements under which we are granted access to certain cloud services as well as operating lease agreements. During the three months ended March 31, 2024, there were no material changes outside the normal course of business to the purchase obligations as disclosed in the audited consolidated financial statements as of and for the year ended December 31, 2023 included in the Prospectus.

Current wording

We have non-cancellable contractual obligations and commitments primarily related to third-party cloud infrastructure agreements under which we are granted access to certain cloud services as well as operating lease agreements. During the six months ended June 30, 2024, there were no material changes outside the normal course of business to the purchase obligations as disclosed in the audited consolidated financial statements as of and for the year ended December 31, 2023 included in the Prospectus.