Reddit Inc

Previous wording

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

Current wording

•Daily Active Uniques (“DAUq”) were 97.2 million for the three months ended September 30, 2024, an increase of 47% year over year

Previous wording

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

Current wording

•Average revenue per unique (“ARPU”) was $3.58 for the three months ended September 30, 2024, an increase of 14% year over year

Previous 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.

Current wording

In the three months ended September 30, 2024, global DAUq grew 47% compared to the prior year period, driven by 51% growth in DAUq in the United States and 44% growth in DAUq in the rest of world. Global DAUq grew 7% compared to the prior quarter period, driven by 6% growth in DAUq in the United States and 7% growth in DAUq in the rest of world. The growth in global DAUq in the three months ended September 30, 2024 compared to the prior year period and prior quarter period was impacted by the combination of third-party search engine and algorithm changes, traction in our growth strategies, and product enhancements.

Previous 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%.

Current wording

In the three months ended September 30, 2024, global WAUq grew 53% compared to the prior year period, driven by 58% growth in WAUq in the United States and 48% growth in WAUq in the rest of world. In the three months ended September 30, 2024, global WAUq increased 7% compared to the prior quarter period, driven by 6% growth in WAUq in the United States and 7% growth in WAUq in the rest of world. For the three months ended September 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 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.

Current wording

We monetize our business primarily through advertising on our mobile applications and website. In the nine months ended September 30, 2024, we recorded revenue of $872.5 million, as compared to revenue of $554.3 million for the nine months ended September 30, 2023, representing an increase of 57% compared to the prior year period.

Previous 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.

Current wording

During the three months ended September 30, 2024, ARPU was $3.58, an increase of 14% compared to $3.14 for the prior year period, United States ARPU was $5.88, compared to $5.27 for the prior year period, and rest of world ARPU was $1.32, compared to $1.14 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, while pricing was consistent with the prior year period. The increase in global ARPU compared to the prior quarter period was due primarily to an increase in advertising revenue driven by an increase in pricing, and to a lesser extent, an increase in impressions delivered. Additionally, global ARPU increased in both periods as a result of data licensing agreements executed in 2024.

Previous 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.

Current wording

(3)During the nine months ended September 30, 2023, we incurred restructuring costs of $8.1 million, 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 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.

Current wording

Revenue for the three and nine months ended September 30, 2024 increased by $140.8 million and $318.2 million, or 68% and 57%, respectively, compared to the prior year periods. The growth in revenue in the three months ended September 30, 2024 was due primarily to an increase in advertising revenue driven by an increase in impressions delivered, while pricing was consistent with the prior period. The growth in revenue in the nine months ended September 30, 2024 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 in both periods as a result of data licensing agreements executed in 2024.

Previous 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.

Current wording

Cost of revenue for the three and nine months ended September 30, 2024 increased by $8.2 million and $9.7 million, or 31% and 12%, 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 other advertising services, partially offset by hosting cost efficiencies and lower hosting prices.

Previous 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.

Current wording

Other income (expense), net for the three and nine months ended September 30, 2024 increased by $10.3 million and $21.6 million, or 82% and 59%, 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 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.

Current wording

Income tax expense (benefit) for the nine months ended September 30, 2024 decreased by $2.7 million, or 96%. The decrease in income tax expense was primarily attributable to a decrease in taxable income in the current period.

Previous wording

On October 8, 2021, we entered into a five-year, $750.0 million, revolving loan and standby letter of credit facility agreement (“Revolving Credit Facility”) of which $100.0 million can be issued as letters of credit. As of June 30, 2024, we have issued two letters of credit, one of which is denominated in a foreign currency, for an aggregate of $4.9 million, which reduced the letter of credit borrowings available under the Revolving Credit Facility to $95.1 million. The aggregate available balance under the Revolving Credit Facility was $745.1 million as of June 30, 2024.

Current wording

On October 8, 2021, we entered into a five-year, $750.0 million, revolving loan and standby letter of credit facility agreement (“Revolving Credit Facility”) of which $100.0 million can be issued as letters of credit. As of September 30, 2024, we have issued two letters of credit, one of which is denominated in a foreign currency, for an aggregate of $5.0 million, which reduced the letter of credit borrowings available under the Revolving Credit Facility to $95.0 million. The aggregate available balance under the Revolving Credit Facility was $745.0 million as of September 30, 2024.

Previous 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.

Current wording

Net cash provided by operating activities was $132.1 million in the nine months ended September 30, 2024, resulting primarily from adjustments for non-cash items, primarily related to stock-based compensation expense of $716.5 million, and an increase in accounts payable and accrued expenses and other current liabilities of $44.6 million due to timing of payments. These increases were partially offset by net loss of $(555.3) million in the nine months ended September 30, 2024, an increase in accounts receivable of $38.9 million due to the increase in revenue, and net amortization of premium on marketable securities of $(31.9) million. Net cash used in operating activities was $(57.7) million in the nine months ended September 30, 2023, resulting primarily from net loss of $(109.4) million, partially offset by adjustments for non-cash items, primarily related to stock-based compensation expense of $32.0 million, and an increase in accrued expenses and other current liabilities of $19.6 million due to timing of payments.

Previous 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.

Current wording

Net cash used in investing activities was $(397.6) million in the nine months ended September 30, 2024, primarily due to additional purchases of marketable securities of $1.4 billion and cash paid for acquisitions, net of cash acquired of $17.1 million, partially offset by maturities of marketable securities of $1.0 billion. Net cash provided by investing activities was $59.7 million in the nine months ended September 30, 2023, primarily due to maturities and proceeds from the sale of marketable securities of $992.8 million, partially offset by purchases of marketable securities of $928.0 million.

Previous 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.

Current wording

Net cash provided by financing activities was $380.2 million in the nine months ended September 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 $62.9 million, partially offset by cash payments for taxes related to net share settlement of restricted stock units of $268.1 million. Net cash used in financing activities was $(3.5) million in the nine months ended September 30, 2023 and consisted primarily of cash payments of $4.2 million for taxes paid related to net share settlement of restricted stock units, partially offset by proceeds from exercises of employee stock options of $2.6 million.

Previous 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.

Current wording

Free Cash Flow was $126.7 million for the nine months ended September 30, 2024, and was composed of net cash provided by operating activities, resulting primarily from adjustments for non-cash items and changes in working capital, partially offset by net loss. Free Cash Flow was $(62.8) million for the nine months ended September 30, 2023, and was composed of net cash used in operating activities, resulting primarily from net loss, partially offset by adjustments for non-cash items and changes in working capital. Free Cash Flow also included purchases of property and equipment of $5.4 million and $5.1 million for the nine months ended September 30, 2024 and 2023, respectively. For the nine months ended September 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 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.

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 nine months ended September 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.