May 1, 2025 — Reddit has delivered a strong signal of advertising sector resilience, projecting second-quarter revenue well above analysts’ expectations. This bullish outlook ignited a 19% surge in the company’s shares during after-hours trading.
The social media platform is seeing growing traction in digital advertising thanks to its innovative “conversation placement” ad format. This strategy allows brands to engage users directly within active discussions across subreddits — the platform’s niche-focused communities — enhancing both visibility and relevance.
Despite broader economic concerns and tighter marketing budgets triggered by trade pressures and regulatory changes, Reddit’s advertising investments appear to be bearing fruit. The company’s ability to attract advertisers during this uncertain period sets it apart from some peers in the industry.
Reddit now anticipates second-quarter revenue in the range of $410 million to $430 million, notably ahead of Wall Street’s average forecast of $395.5 million (based on LSEG data). The company also expects adjusted EBITDA to fall between $110 million and $130 million, outperforming expectations of $105.3 million.
This announcement follows a standout performance in the previous quarter, with Reddit reporting a 61% year-over-year revenue increase, reaching $392.4 million — exceeding projections of $370 million. The platform’s daily active unique user base also grew by 31%, totaling 108.1 million, slightly above the 107.5 million estimate.
While larger platforms like Meta have also reported strong ad revenues, others such as Snap have refrained from issuing forecasts amid economic headwinds. Reddit’s positive momentum highlights its rising value to advertisers seeking engagement-driven placements on platforms with dedicated, topic-driven communities.
As competition for ad dollars intensifies among major players like TikTok, Facebook, and Instagram, Reddit’s targeted ad formats and growing user base position it as a serious contender in the digital advertising arena.
