Reddit, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2024 included in our Annual Report on Form 10-K. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Note Regarding Forward-Looking Statements.”

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2024 included in our Annual Report on Form 10-K (the “Annual Report”). In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Note Regarding Forward-Looking Statements.”

Previous wording

•Daily Active Uniques (“DAUq”) were 108.1 million for the three months ended March 31, 2025, an increase of 31% year over year

Current wording

•Daily Active Uniques (“DAUq”) were 110.4 million for the three months ended June 30, 2025, an increase of 21% year over year

Previous wording

•Average revenue per unique (“ARPU”) was $3.63 for the three months ended March 31, 2025, an increase of 23% year over year

Current wording

•Average revenue per unique (“ARPU”) was $4.53 for the three months ended June 30, 2025, an increase of 47% year over year

Previous wording

•Cash, cash equivalents, and marketable securities were $2.0 billion as of March 31, 2025

Current wording

•Cash, cash equivalents, and marketable securities were $2.1 billion as of June 30, 2025

Previous wording

In the three months ended March 31, 2025, global DAUq grew 31% compared to the prior year period, driven by 21% growth in DAUq in the United States and 41% growth in DAUq in the rest of world. Global DAUq grew 6% compared to the prior quarter period, driven by 4% growth in DAUq in the United States and 8% growth in DAUq in the rest of world. The growth in global DAUq in the three months ended March 31, 2025 compared to the prior year period and prior quarter period was driven by the combination of third-party search engine and algorithm changes, traction in our growth strategies, particularly in machine translation, and product enhancements.

Current wording

In the three months ended June 30, 2025, global DAUq grew 21% compared to the prior year period, driven by 11% growth in DAUq in the United States and 32% growth in DAUq in the rest of world. Global DAUq grew 2% compared to the prior quarter period, driven primarily by 4% growth in DAUq in the rest of world. The growth in global DAUq in the three months ended June 30, 2025 compared to the prior year period was primarily driven by traction in our growth strategies, particularly product initiatives such as machine translation and marketing, and to a lesser extent, by third-party search engine and algorithm changes. The growth in global DAUq in the three months ended June 30, 2025 compared to the prior quarter period was driven by traction in our growth strategies, particularly product initiatives such as machine translation and marketing, partially offset by third-party search engine and algorithm changes.

Previous wording

In the three months ended March 31, 2025, global WAUq grew 31% compared to the prior year period, driven by 18% growth in WAUq in the United States and 44% growth in WAUq in the rest of world. In the three months ended March 31, 2025, global WAUq increased 6% compared to the prior quarter period, driven by 4% growth in WAUq in the United States and 8% growth in WAUq in the rest of world. For the three months ended March 31, 2025, the proportion of DAUq to WAUq was 27%.

Current wording

In the three months ended June 30, 2025, global WAUq grew 22% compared to the prior year period, driven by 8% growth in WAUq in the United States and 35% growth in WAUq in the rest of world. In the three months ended June 30, 2025, global WAUq increased 4% compared to the prior quarter period, driven by 2% growth in WAUq in the United States and 6% growth in WAUq in the rest of world. For the three months ended June 30, 2025, 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, 2025, we recorded revenue of $392.4 million, as compared to revenue of $243.0 million for the three months ended March 31, 2024, representing an increase of 61% 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, 2025, we recorded revenue of $892.0 million, as compared to revenue of $524.1 million for the six months ended June 30, 2024, representing an increase of 70% compared to the prior year period.

Previous wording

During the three months ended March 31, 2025, ARPU was $3.63, an increase of 23% compared to $2.94 for the prior year period, United States ARPU was $6.27, compared to $4.77 for the prior year period, and rest of world ARPU was $1.34, compared to $1.10 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, and to a lesser extent, an increase in pricing. Additionally, global ARPU increased compared to the prior year period as a result of content licensing agreements executed during the period. 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, 2025, ARPU was $4.53, an increase of 47% compared to $3.08 for the prior year period, United States ARPU was $7.87, compared to $4.94 for the prior year period, and rest of world ARPU was $1.73, compared to $1.24 for the prior year period. The increase in global ARPU compared to the prior year and prior quarter periods was due primarily to an increase in advertising revenue driven by an increase in impressions delivered, and to a lesser extent, an increase in pricing.

Previous wording

Revenue for the three months ended March 31, 2025 increased by $149.4 million, or 61%, compared to the prior year period. The growth in revenue was due primarily to an increase in advertising revenue driven by an increase in impressions delivered and an increase in pricing. In addition, other revenues increased as a result of content licensing agreements executed during 2024.

Current wording

Revenue for the three and six months ended June 30, 2025 increased by $218.4 million and $367.8 million, or 78% and 70%, 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 and to a lesser extent, an increase in pricing. In addition, other revenues increased as a result of content licensing agreements executed in 2024.

Previous wording

Cost of revenue for the three months ended March 31, 2025 increased by $9.5 million, or 34%, compared to the prior year period. The increase in cost of revenue was primarily attributable to increased hosting usage to support user growth and product enhancements on our platform, partially offset by lower hosting prices.

Current wording

Cost of revenue for the three and six months ended June 30, 2025 increased by $16.4 million and $25.9 million, or 56% and 45%, respectively, compared to the prior year periods. The increase in cost of revenue was primarily attributable to increased hosting usage to support user growth and product enhancements on our platform, as well as an increase in advertising measurement and other services, partially offset by lower hosting prices.

Previous wording

Research and development expenses for the three months ended March 31, 2025 decreased by $245.8 million, or 56%, compared to the prior year period. The decrease was driven primarily by the cumulative catch-up upon IPO of stock-based compensation expense and related taxes for RSUs with a liquidity event vesting condition recognized in the prior year period, partially offset by an increase in other employee-related costs in the current period.

Current wording

Research and development expenses for the three and six months ended June 30, 2025 increased by $53.8 million, or 38%, and decreased by $191.9 million, or 33%, compared to the prior year periods, respectively. The increase in the three months ended June 30, 2025 compared to the prior year period was driven primarily by an increase in stock-based compensation expense and an increase in other employee-related costs, driven in part by an increase in headcount. The decrease in the six months ended June 30, 2025 compared to the prior year period was driven primarily by the cumulative catch-up upon IPO of stock-based compensation expense and related taxes for RSUs with a liquidity event vesting condition recognized in the prior year period, partially offset by an increase in other employee-related costs in the current period.

Previous wording

Other income (expense), net for the three months ended March 31, 2025 increased by $6.0 million, or 41%, compared to the prior year period. The increase was primarily due to higher interest earned on our cash and investments driven by a higher invested balance.

Current wording

Other income (expense), net increased by $6.4 million, or 18%, for the six months ended June 30, 2025 compared to the prior year period. The increase compared to the prior year period was primarily due to higher interest earned on our cash and investments driven by a higher invested balance.

Previous wording

Income tax expense (benefit) for the three months ended March 31, 2025 decreased by $2.1 million compared to the prior year period. The income tax benefit in the current year period was primarily attributable to an excess tax benefit from stock-based compensation in a foreign subsidiary.

Current wording

Income tax expense (benefit) for the six months ended June 30, 2025 decreased by $2.3 million compared to the prior year period. The income tax benefit in the current year period was primarily attributable to an excess tax benefit from stock-based compensation in a foreign subsidiary.

Previous wording

As of March 31, 2025, we had $2.0 billion in cash, cash equivalents, and marketable securities. Our cash and cash equivalents consist of cash in bank accounts, money market accounts, certificates of deposit, and other highly liquid investments with original maturities of 90 days or less from the date of purchase. Marketable securities consist of U.S. government securities, investment-grade corporate and government agency securities, and commercial paper. As of March 31, 2025, approximately 1% of our cash, cash equivalents, and marketable securities was held outside of the United States.

Current wording

As of June 30, 2025, we had $2.1 billion in cash, cash equivalents, and marketable securities. Our cash and cash equivalents consist of cash in bank accounts, money market accounts, certificates of deposit, and other highly liquid investments with original maturities of 90 days or less from the date of purchase. Marketable securities consist of U.S. government securities, investment-grade corporate and government agency securities, and commercial paper. As of June 30, 2025, approximately 2% of our cash, cash equivalents, and marketable securities was held outside of the United States.

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 March 31, 2025, 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 March 31, 2025.

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 June 30, 2025, we have issued two letters of credit, one of which is denominated in a foreign currency, for an aggregate of $5.2 million, which reduced the letter of credit borrowings available under the Revolving Credit Facility to $94.8 million. The aggregate available balance under the Revolving Credit Facility was $744.8 million as of June 30, 2025.

Previous wording

The Revolving Credit Facility contains customary conditions on our borrowing, including events of default and covenants. Covenants include restrictions on our and certain of our subsidiaries’ ability to incur indebtedness, grant liens, make distributions to holders of our preferred and common stock, make investments, or engage in transactions with our affiliates, and require us to maintain a minimum liquidity. The obligations under the Revolving Credit Facility are secured by liens on substantially all of our assets, including intellectual property assets. We were in compliance with all covenants as of March 31, 2025.

Current wording

The Revolving Credit Facility contains customary conditions on our borrowings, including events of default and covenants. Covenants include restrictions on our and certain of our subsidiaries’ ability to incur indebtedness, grant liens, make distributions to holders of our preferred and common stock, make investments, or engage in transactions with our affiliates, and require us to maintain a minimum liquidity. The obligations under the Revolving Credit Facility are secured by liens on substantially all of our assets, including intellectual property assets. We were in compliance with all covenants as of June 30, 2025.

Previous wording

We believe our cash flows from operations, existing cash, cash equivalents, and marketable securities, and amounts available under our Revolving Credit Facility will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and for the foreseeable future. We continuously evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance our future capital needs.

Current wording

We believe our cash flows from operations, existing cash, cash equivalents, and marketable securities, and amounts available under our Amended Revolving Credit Facility will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months and for the foreseeable future. We continuously evaluate our liquidity and capital resources, including our access to external capital, to ensure we can finance our future capital needs.

Previous wording

Net cash provided by operating activities was $127.6 million in the three months ended March 31, 2025, resulting primarily from net income of $26.2 million in the three months ended March 31, 2025 and adjustments for non-cash items, primarily related to stock-based compensation expense of $85.4 million, a decrease in accounts receivable of $23.4 million due to the timing of cash collections, and an increase in accrued expenses and other current liabilities of $16.1 million due to timing of payments. These amounts were partially offset by an increase in prepaid expenses and other assets of $17.0 million. 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.

Current wording

Net cash provided by operating activities was $238.9 million in the six months ended June 30, 2025, resulting primarily from net income of $115.5 million in the six months ended June 30, 2025, adjustments for non-cash items, primarily related to stock-based compensation expense of $174.5 million, and an increase in accounts payable and accrued expenses and other current liabilities of $41.2 million due to the timing of payments. These amounts were partially offset by an increase in accounts receivable of $57.8 million due to the timing of cash collections and an increase in prepaid expenses and other assets of

Previous wording

Net cash used in investing activities was $(27.5) million in the three months ended March 31, 2025, primarily due to additional purchases of marketable securities of $504.8 million, partially offset by maturities and proceeds from the sale of marketable securities of $477.4 million. 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.

Current wording

Net cash used in investing activities was $(29.6) million in the six months ended June 30, 2025, primarily due to additional purchases of marketable securities of $1.1 billion, partially offset by maturities and proceeds from the sale of marketable securities of $1.0 billion. 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.

Previous wording

Net cash used in financing activities was $(26.5) million in the three months ended March 31, 2025 and consisted primarily of cash payments for taxes related to net share settlement of restricted stock units of $36.7 million, partially offset by proceeds from exercises of employee stock options of $10.2 million. 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.

Current wording

Net cash used in financing activities was $(37.4) million in the six months ended June 30, 2025 and consisted primarily of cash payments for taxes related to net share settlement of restricted stock units of $51.9 million, partially offset by proceeds from exercises of employee stock options of $14.5 million. 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 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.

Previous wording

Free Cash Flow was $126.6 million for the three months ended March 31, 2025, and was composed of net cash provided by operating activities, resulting primarily from net income and adjustments for non-cash items and changes in working capital. Free Cash Flow was $29.2 million for the three months ended March 31, 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 also included purchases of property and equipment of $1.0 million and $2.9 million for the three months ended March 31, 2025 and 2024, respectively. For the three months ended March 31, 2025, the increase in Free Cash Flow as compared to the prior year period was driven primarily by the increase in net income.

Current wording

Free Cash Flow was $237.4 million for the six months ended June 30, 2025, and was composed of net cash provided by operating activities, resulting primarily from net income and adjustments for non-cash items and changes in working capital. 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 adjustments for non-cash items and changes in working capital, partially offset by net loss. Free Cash Flow also included purchases of property and equipment of $1.5 million and $4.1 million for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025, the increase in Free Cash Flow as compared to the prior year period was driven primarily by the increase in net income.

Previous wording

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Current wording

During the periods presented, we did not have, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

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, 2025, 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, 2024 included in the Annual Report on Form 10-K.

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, 2025, 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, 2024 included in the Annual Report.

Previous wording

There have been no material changes to our critical accounting policies and estimates as described in our Annual Report on Form 10-K.

Current wording

There have been no material changes to our critical accounting policies and estimates as described in our Annual Report.