Reddit Q4 EPS Beats by 32%, Revenue Jumps 70% Yet Shares Dip 4%
Reddit reported adjusted Q4 EPS of $1.24 versus $0.94 consensus on $726 million revenue, up 70% year-over-year driven by a 75% jump in ad sales and 121.4 million daily active users. Shares fell 4% intraday despite a premarket 8% rally on slowing U.S. user growth and a cut in price target to $170.
1. Strong Q4 Financial Results
Reddit delivered adjusted EPS of $1.24 in the fourth quarter, topping the $0.94 consensus, while revenue soared 70% year-over-year to $726 million. Advertising revenue grew 75%, underscoring robust monetization of its core platform.
2. User Growth Dynamics
Daily Active Uniques climbed 19% to 121.4 million, led by a 28% increase in international users. Growth in U.S. logged-in users slowed to just 5%, raising concerns about market saturation in Reddit’s highest-value segment.
3. Analyst and Investor Reactions
Several firms lowered price targets following the report, including a cut to $170 from $240 by Cantor Fitzgerald, which maintained a Neutral rating. Some investors took profits after an 8% premarket surge, contributing to intraday weakness.
4. Stock Price Movement
Despite the earnings beat, shares reversed course and fell around 4% intraday to about $147.48. This divergence occurred while the broader market rallied over 1,000 points on the Dow Jones Industrial Average.