Reddit, Inc. Q4 FY2024 earnings call

• Revenue growth: Q4 revenue grew 71% YoY to $428M, full year revenue $1.3B (+62% YoY). GAAP profitable in Q4, with adjusted EBITDA $154M, GAAP net income $71M. - International growth: International ad revenue grew 77% YoY in Q4, international DAUq grew 46% YoY. - AI initiatives: Machine translation rolling out in 8 languages; Reddit Answers, an AI-powered search tool, launched in U.S. beta. - Ad platform: Focus on multi-objective ad platform, driving performance across objectives, improving usability for advertisers, and offering unique ad formats. - Content licensing: Partnership with Intercontinental Exchange to develop financial data products.

In Q4, total revenue was $428 million, with ad revenue growing 60% year-over-year to $395 million. For the full year, revenue reached $1.3 billion, up 62% year-over-year. International ad revenue grew 77% year-over-year in Q4, the fastest growth in over 2 years, led by the U.K. and broader EMEA regions. Ad revenue from performance advertisements now comprises slightly less than 60% of total revenue. The content licensing business entered a partnership with Intercontinental Exchange in Q4 to develop new data and analytics products for the financial industry.

• Q1 2025 revenue estimated in range of $360 million to $370 million, representing 48% to 52% year-over-year growth. - Adjusted EBITDA for Q1 2025 expected in range of $80 million to $90 million. - Hiring pace accelerated slightly, with investments in engineering and search teams.

• Google Search algorithm changes caused volatility in Q4 traffic, primarily affecting logged-out users, but traffic from search has recovered in Q1. - Evolving EU privacy landscape could impact the broader ad industry.

Q: Progress in growing advertiser count and search's intent signal?

A: Jennifer Wong talked about growing monthly active advertiser count, focusing on ease of use, automation, and top-of-funnel efforts like Reddit Pro. Steven Huffman highlighted search's value in capturing user intent and driving monetization.

Q: International strategic priorities and runway?

A: Steven Huffman and Jennifer Wong discussed universal nature of Reddit, machine translation rollout, community growth efforts in international markets, and investment in EMEA to acquire advertisers.

Q: Use of open large language models and impact on content licensing?

A: Steven Huffman stated Reddit uses open source AI models, and open models don't threaten content licensing as Reddit provides up-to-date information crucial for foundation models