Overview
- Jim Cramer praised Reddit on air, saying he wishes he owned the stock and calling the platform a potential “single best training” source for AI models, with value he believes exceeds $40 billion.
- Reddit reported Q3 revenue of about $585 million, up roughly 68% year over year, with a 91% gross margin, about a 40% adjusted EBITDA margin, and just $2.1 million in capital expenditures.
- Cramer noted that OpenAI and Google pay to license Reddit data, described licensing as a small but expandable revenue stream, and alleged that many other AI firms use Reddit’s data without paying.
- Reddit’s CFO said the company is using machine translation to support 30 languages and improve search, contributing to Q3 international daily users rising 31% to 64 million, with 75 million weekly search users.
- Shares jumped about 7.5% after earnings before giving back some gains, while analysts emphasized the need to grow logged-in traffic; FactSet shows 18 buys, 11 holds, and 1 sell.