Overview
- Reddit reported second-quarter revenue of $805 million and net income of $253 million, beating estimates and issuing Q3 guidance above Wall Street forecasts.
- The company said AI-powered advertising tools helped drive 70% year-over-year advertiser growth and underpinned its strong revenue and profit performance.
- Reddit warned that search referrals became “choppy” and traffic grew more volatile later in the quarter, a change investors see as a threat to user acquisition and long-term traffic volumes.
- Its data-licensing business grew 24% to $43 million with OpenAI and Google as top partners, and the firm is treating contract talks with Google as a strategic lever in response to search changes.
- Shares fell about 9–10% in after-hours trading on investor concern, and Reddit is focusing on product changes to convert search visitors into logged-in users to blunt referral losses.