RDDT - Earnings call transcript Q1 2024

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Operator

Good afternoon. My name is Julianne, and I will be your conference operator today. At this time, I would like to welcome everyone to Reddit's Q1 2024 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Jesse [ Rose ], Head of Investor Relations.

begin. now may You

Unknown Executive

Good Conference Welcome Call. Julianne. Quarter Reddit's XXXX Earnings afternoon, Thanks, to everyone. First Great.

subreddit, Reddit's our Vollero, Joining made and are be first Co-Founder Investor Wong, quarter Steve our today followed it Huffman, and Investor me to session. We website RDDT. shareholders Relations Reddit's available and share by a letter CEO; on issued remarks to CFO. have Their Reddit's our Relations Q&A results COO; and will Drew our Jen today earlier

Before those get to expected outlook other results factors you future SEC. any concerning we these results in our I'd stated started, remind Actual vary filings could Risk cause our include in that objectives, forward-looking differ forward-looking quarter. We or particular, may that date included like undertake These statements. Information will statements. including risks, obligation statements today materially as with to SEC to guidance uncertainties forward-looking our of update no next those today's for filings, performance our plans, revise regarding and remarks of this Factors only our the and in statements, of call. the including our section the the is represent from

measures substitute measures Non-GAAP discuss not to, for set the any shareholders. financial GAAP considered measures. most forth a both non-GAAP the to today Reconciliation in be letter financial financial we Additionally, is GAAP matters GAAP in will comparable as directly of include our will and non-GAAP should measures measures. addition to

recorded call conference Finally, is being webcasted. today's and

to Steve. over the turn I'll call Now

Steven Huffman

proud We saying thank we're bit built public transition in us a the spending your things as that today. to markets, today. of and have and this you company. I'd quarter. by Thanks, to a Reddit's start our CEO, first Jesse. to made off Hi, be Co-Founder Steve, companies with great call kicking believe Welcome are I'm public off like earnings and the time us for everyone. I'll for

our users the to an investors want our investors, And all user employees, welcome new who And Our IPO to our also you I for possible. important want to moment new and investors. our I is say to it company. to say thank particularly made

be of able been today forward, Reddit we and users of to has community process. to long own a to in some mine. Starting For want include the dream this going

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Unknown Executive

Thanks, Hello, everyone. Steve.

contextual was its excited as advertising everyone and and achieved public helped about date IPO in Reddit's couldn't platform advertisers in future by early platform. In our important quarter to the journey, and our business, fastest a still proud Our successfully quarter, XXXX. on company. Reddit our thankful emerging $XXX interspaced make the and I'm QX million, diversified roadmap. leader and businesses first every expanded what the is more milestone to improve licensing that I'm solutions are the possible. data we scaled advertising. bring new a revenue And and advertiser new working accelerated we user be to and of our it grew and for since day, to business first economy. ads in year-over-year in Total growth be partnerships aspire our and XX% I year-over-year and an Reddit executed monetization communities, with We we to have our for growth

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drive to rates in over volume performance we Click advertisers. XX% quarter. for us by enabled and investments click-through the Our doubled, year-over-year improved

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our update data an business. I'll Next, on licensing share

companies Reddit's and our previously time, users will signed well [indiscernible] ahead. valuable hope licensing data as revenue I continues is we are reflected delivered focused The in journey look is impact space nascent. grow shortly with signed strategically to explore remain forward our data the to with QX our first the you'll and company as evolve for as the that on. in for announced. executing mission. various in financials first quarter and from we platform quarter, of partnerships and QX, Drew our Google solid uses have licensing future data fulfilling Over listening believe share social the in financial agreements improving which other business and in we which we In the the other and guide experience market in the public and customers. Overall, we hear as results you we as and partnerships for Our revenue excitement on a internally, also Reddit's and our still same

Now Drew. I'll to turn the call over

Andrew Vollero

and Jen, good everyone. you, Thank afternoon,

and adjusted marked year-over-year. As ago straightforward, reached adjusted was EBITDA a success grew the say, power as Reddit powerful total evident it In that revenue was inflection quarter, to that and year-over-year, first we grew a to Xx quarter, positive important total costs. an of a from model financial grew and that's XXXX. year difference the were often first the X% The fast In in a has costs both the scalable. The advantaged as XX% is over revenues start we key we and model point. adjusted quarter, profitable which financial

about the summarize base. deals. in million, new X.X and million, data revenue being and the of averaged highlights. both XX% from user was speed, users small year-over-year, acceleration simplicity of incremental out. Revenues in by -- the years, ad have in XX% increase year-over-year, largest from the [ in a in of $XX areas. increased the the in driven logged of strong in distinct users of Other XX% were those million million $XXX large X AUQ Domestic users consumer total XX% up quarter, total revenue relevant our were by ] The X quarter, and added revenues in we onboarding, XX% up shined XXX% XX% to a year-over-year has changes licensing which users up revenue. Reddit's with business XX% up the more content. last quarter, $XX year. and were over users million, product with structural $XX.X International XX% Let's quarter the really model business logged were couple Sequentially, that driven connection advantages,

First, new in our revenue the contract points accretive tailwind data lower year, versus margins first basis prices, class. margin efficiencies tech in quarter, Gross for remain stack the gross XXX licensing best gains, high-margin by the were margins up last XX.X% hosting and driven deals.

contributing free in million very remains was quarter in to factor of light. was flow about our was that first Second, $X our CapEx CapEx revenue. X% just and positive million over the cash Low quarter. CapEx $XX a the

great our scaled leverage we we As operating X areas. business, saw in

expenses strategic and we Total were such year-over-year. to X% sequentially operating count Non-GAAP headcount. expenses in X% leverage machine and XX% head and up tech QX was First areas sales, operating year-over-year continued as hire learning. ending in ad selectively increased as

operating by million $XXX quarter driven compensation, from nearly quarter, connection in the $XX IPO. the driven adjusted by the million did $X.XX vesting marketable shares units securities X.X% flow as all million, incremental we interest said, year on from our loss quarter financial of free first of million a we the first in was the offering. On have at a of cash basis, is approximately notes outstanding ended and expenses revenue issued incremental swing helped DSO stock-based about a cash operating grants the and and our and digital improved of billion from QX, basis. That for first on quarter, QX in from quarter. of in million the line working was at incremental of a advertising including improvements Stock-based by $X.XX improvement an $XX of about profitable point. on and X.X first from plan IPO other and million in to EBITDA net adjusted diluted $XX $XX related Cash positive as EBITDA in prior in with includes about million adjusted employees be leverage proceeds the the over stock taxes year. business We the profitable EBITDA employee At Dilution in quarter this million related QX, end for the business year-over-year, dilution line time. was reached This a increased view first dollar ago with slowest was to capital $XX low $XXX couple In quarter, quarter. fully that of the cost cash implying activities up restricted year. Positive an adjusted of taxes flow QX. on a basis, shares. These primarily in first highly which revenue Second and sales. year-over-year, cash dollars our shares driven public of was onetime driver the EBITDA to performance DPO. A adjusted sales related into approximately to profitability drive and over our manage peers range percentage increased was the traditionally on EBITDA our really in bottom non-GAAP single-digit stock strong initial million $XX the marks GAAP a compensation

for internal $XX we and As and $XXX to XXXX, to estimate which the EBITDA to have ahead, of In revenue million. be million quarter the the we'll range $XXX in second share second visibility. where adjusted we thoughts of on $X range revenue adjusted of greatest our we million in quarter, be EBITDA is to look the the

free modest EBITDA profitability QX user strong with which summary, to solid cost and start growth, year the a expansion, was growth and margin in So flow. accelerated fueled and cash revenue positive adjusted

turn Now back let over the me call to Steve.

Steven Huffman

thanks, Drew, Jen. Thanks

a here. and over questions couple then we'll take call from to of to quickly, turn community going it We're the Okay. the

We are yes, is but what our considered from in goes considerate are landscape There players models, I good it's search handful initiatives licensing data early comment an larger short deals beyond more into smaller I we going of ecosystem, not here. data and large in I'd is AI for. for your our Reddit's to how So that are we're a to seen for then days the need plans can't community, with terms of in partners, various are answer and data being all in uses. players for the the data be first opportunities. of in for under negotiation, increase but Google. The are and think, question big We're Reddit. and interest both. That And we're expand scale used very many deals. said, especially training picture, selective say on where being bifurcated. fits there have looking

-- looking forward. how see look to this we'll forward grows so And

Okay.

question, one Can Second into types types I responsible the increase in sales think the of of this Is mostly Jen, about increased what for new platform? go types you. most advertising that for you on advertising existing specifics strong advertising or of are previously earnings? on

Unknown Executive

Sure. saw actually demand. Thanks both and supply question. We the for in growth

about me Let demand talk the side.

as saw a funnel the Brand, XXXX really conversion. driving relative the we mid growth across I So to, well the certainly driving is the traffic funnel, of sort funnel was strong quarter. particular, is funnel, in nice strength, last think, brand -- showed which as and funnel, brand quarter the upper across QX which the of bottom had

a for really was in see have to improvements volumes, because nice made year-over-year we I'd it well doing doubling So quick Mid say, CTR, lot brand of really XX% efficiency come advertisers. is back. [ ], those

managed then in pharma, CPG strength we We And America and like Europe. to channels, and particularly mid-market in Continental verticals our large have customer strength across tech and growth. channel the return finance, in saw also North broad-based

opportunity, as and platform comments from placement reading is comment placement in as a of ad ad page. did in feed some types. new from ad conversation see designing in while growth spending the strong the two diving really It's these the We work. side, -- conversations with users deeper and ad inventory supply well time more today inventory the the our an ad On core consists

So both helpful demand business. in drivers in supply our and were

Steven Huffman

up Great. take open Thanks, from some Jen. Juilianne, why the questions on don't the line. we line, folks

Operator

question from first Our Instructions] from Ron [Operator Josey Citi. will come

Ronald Josey

Steve, quarter. million $X.X growing on global Jen, DAUQs [ Steve, ] by to Great wanted ask, sequentially. Drew, I

the then home I Just doing get talk you as out. would Drew, healthy, the search as the helpful. And know any growth be comment sustainability sustainability. better but feed hear back and insights on ML, Steve rolled we market year, comps but think fully the Jen here of love is to in well. the mentioned your is into I is now about certainly the tougher the thoughts user drivers the was I Improved and half of ad would Shreddit

Steven Huffman

Thanks. sure. Sure,

growth, with growth happy The of user results. the So driver we're is is better. like the main product

Web by in But business, users, so we both -- increase our is increase And been largely has growth is the which really core performance our in logged-in product logged-out quality. which in the And XX% is inventory the mentioned performance, the yes, driving Shreddit, equals from bedrock users. is driven users. for there Google, year-over-year. retention traffic an up driving of the to also of improvements also

gotten has efficient. gotten home sign-up feed So more and has Onboarding better relevance. much then

a last of very been million Roughly in for or of XX X not onetime the to because them month, session first So a we've users forward months. feel adding seen it's users finding spike. users and is million content that. We relevant X the much more confident -- their consistently last XX looking that's and X gotten We've at the X effective growth the We've months last on Reddit. like a isn't year. that users

our working And work and quality is focusing that driving so retention. short, and story of we product long on performance

thing are non-U.S. And XX-XX as to We're we're so our international forward to non-U.S., we XX% still go more U.S. forward other XX% the versus growth. peers is looking but

opportunity there's I think so And a huge there.

think medium of I big the translation. the near us machine unlocks to in is one for term

second the our and will want of we're into in do outlook? that, hope year other So today corpus entire on help Jen, mostly translating to that growth. you half the languages that's comment accelerate Drew, international English

Unknown Executive

second back well good XXXX. is in our as as it in advertising it's of half. parts the feeling do the healthy We're and Drew. we then QX Look, half Yes, and many kick markets since are positioned are well for been off strong add business to in I'll working first brand

[indiscernible] the in diversification. growth accelerated like both So channel like and the in continental traction. Europe. I strategies mid-market in gaining North and the We our vertical America are

QX traction. The like election, especially campaigns, XX% U.S., So solid We which we our in half. And an QX. the could low also just there's traction. easier a our do And in advertisers. into just revenue is had U.S. really of growth year. QX, year-over-year a the brand good, had reality of QX of there gaining is we've the we is visibility XXXX. XX% feel Some from impact lot positive ] context and comp, back advertisers [ geopolitical the the second inflation, visibility type for but and into of like strategy start We feel But comps a have a lot a end

to Let more pass color. to some Drew me add

Andrew Vollero

think No, Yes. I Jen. said, well that's

it that think us good was Ron to strong. start for us, a quarter finish. from Even very March -- I was

little Jen the the are in ]. the half first the as back mentioned, lower than of think a [ I comps the quarter year in 'XXs

look, to as identify may cost did, see the said, now. to side say up found things, right think Hard the in we momentum picked I March. And But we a good rhythm also that. from We IPO. I some on strength have of

the costs quarters, X% of in average adjusted been total X XX%, think X%. to last up kind I have

machine good resources about where sense. at our I it scale resources as think adding sales teams a I our where in place and we're we and talked company, teams. a we're really adding learning have makes

know, total XX% the you we're is far cost of OpEx at here place of our the total part selectively, and company. costs a adjusted and in adding head think is have driver. by where count I costs biggest we away, here as scale -- we're

next echo So tailwinds we'll how we on it of least headwinds but the the of feel on things, watching. how good for and that and kind and we're year quarters couple Jen's plays see things of the we're out the at thinking half I on the about back sentiments

Operator

Our comes from JPMorgan. Doug Anmuth from next question

Douglas Anmuth

just this Steve, you you for comments highlighted I if have up more bit Steve, talk just little in opportunity Can Drew, on-platform then on advertisers? And large both excites users on the hear follow one investment and Drew. what the for about you search. you those philosophy could with for a two, year. one

in 'XX, lot XQ. we're a back obviously pulled big in seeing incrementals You that

between as the think go Just that you about and of growth Xx how year and the do cost spread we through beyond? revenue growth course

Steven Huffman

Sure.

question first on platform So is search.

ton a Reddit. in our on users their session like searches run first of So

them And so Reddit, of find they're a and users are typing being what when interested talk their we on opportunities face I box biggest of about exactly in. challenges one home into the helping many

And user so experience point Reddit is a on search from opportunity. just view, I a huge of being platform think on great

Reddit. we over do today, an Now think I bit per queries X quite a opportunity month more. billion on there's for But

pages. then up quality as search and in think, opportunity monetize interface been there's We've to coming auto to our this well. And speak. course, improvements year user investing product features back overdue those we check online life sensible as we've the of then spell So from the search itself an coming better, gets got I end of as are like very and complete some,

that on so explicit no very the are well is there result elsewhere as there's I intention users think for So high-performing And believe today reason searching. product the be on that's Reddit pages no because Internet. wouldn't it adds search a but are when obviously to

up, have And we a for first we foundation the good users. start investment I then improve So product feel was philosophy? I think looking like there, next when think question at the we'll monetization. Drew,

Andrew Vollero

X quarters, it Last X%. Yes, I expanding. philosophy, been growth the or this revenue If quarter about the to Xx for of we've for was It question. What cost XX%. adjusted was has didn't revenue growth, X% as the quarters, see, about Look, really revenue investment cost, XX% point line this look numerator in about averaged nice quarter, the change total X yet sure. investment last as at fast it philosophy. here. Doug, terms our thanks your

those as same line here investments the last X really over fourth meaningfully leverage to in the average. top were stayed really the double resources the consistent the and growth with a business rate So quarter we happened quarters. was or It the drive able that different

didn't way. We will really of terms quarter think to that's that of sort that's be happened you in what that. I I metric. output tell So design the an

be I a term. think about fast over we quarter as growth, the think the than there And to better revenue was how long like first But where are rate this growth that. business example of prime term, our running long that. can our as do internally, like we I think cost Doug, twice certainly quarters we that's

Operator

Brian comes Our Morgan from question next Nowak from Stanley.

Brian Nowak

I have two.

is where incremental partnership? of to coming benefit user any are guess queries unpack one the that, what I going Google sort how of in of make that can follow tailwind it on over Is to out up trends Google? And traffic, the the Maybe help to relationship there course on growth. little us then way The saw sort work? any new in as first you integration? sort traffic the you you you're sort a does of of that of the we the from strong more quantification Google of a Should think be SGE integrated year of grow? a the of this on Or bit

Steven Huffman

it's Steven. Sure, Brian,

So what's user product that's what's performance driving retention. driving the that's is growth and look, factor because driving the quality biggest --

nothing have that's see we're that retention from not training, and so compounds And do can data Google seeing the tailwind out we in with has into you around our with logged growth agreement the numbers. that time. Yes, But a over Google, traffic. to

the like -- performance made keeps cases, track Google in the traffic at the cases, up some I fast, we is bot Google as fast. think from than pages as more uptick those in of driver also it most of some pages, twice to Xx crawls. of performance. really And speed, in the biggest

sometimes they see usually, that has But year. huge they algorithm do so expect hurt. help, can two a sometimes a Google, in you from maybe improvement And ranking. We changes

never the last in see complaining month basically But those. for consistency last you'll million the right, the celebrating or us year. X our you about So hear growth can users year, over for a

there's that's And so Reddit and and I and people in value the by strong consistent that's is right? that's think improvements. And era, humans, -- AI which Reddit has. it, content written been secular to speaks Content is, authentic I think what what a more, really Reddit that benefits and trend that's the then it foundational

for commentary authentic just thirst advice opinions a there's think I so and and conversations. And and

the value And continues through irony and of that's ideas it's fresh shift that the going so grow. I we're is technology humans of think of to the kind

which of sure experiences, when do do Reddit. any one that's things of Reddit linked of considerative deal, terms product that sort to and how thing. Google impacts like sort in is display their of Now we us you data folks Look, making how we're the the that

I look, time. a pretty being been a confident we've this in Reddit so and for Like search out. feel beneficiary of long will play in how Google in And

respective find Reddit. most answers importantly, it companies. well so helps their Reddit good who user them to on for indexed to Reddit users their good And it I the think find gets home it's is But our brings to end it, for being questions, new

help. that And content our so I at displaying can play better better think Google for And decade only getting we've over a and seen out now.

Operator

of Our Post from next question comes Bank Justin from America.

Justin Post

quarter. like to about a more I'd good philosophy. user ask one Great. then guidance and Certainly, users just

more coming it the you people less then in color since are seeing seeing maybe funnel, people on and more in, just Or churn? that's retention or first on more -- your a Are this course. guidance the are maybe so churn. Drew, of But about talking frequently, weeklies that. And and driving quarter. is is about in come little daily, Or wondering coming are everything? of the you I'm top logged at it Just

tell year. you about just about us a little how us bit you your Just Sequential each philosophy. tough tell little provide comp. was think to a is it want really quarter. guidance maybe a Maybe less than that But more guidance last

Steven Huffman

Sure.

look, reporting of quite funnel. more users, than Reddit for We've monthly users time. some massive long top been XXX had on million has a So

of business really weeklies. that and dailies We number on that the run -- Now update we periodically. only user

way And we so retention. we about -- user think need the but it is improve to

I retain going the users. Reddit think bounce is or those can off search to confident challenge about through just of it's or we user we're periodically. or on to word every pretty mouth us that Internet The that. is this Whether

that's focus why our has so performance, on And quality, been onboarding.

resurrections we've and seen new and nice so retention bringing so users back. old really improvement And user user to

are at those metrics building the and compound and that really we're when so products input And we growth. the those new look

as what a time we or that the and and from I that's we we've now. improvements improvements keep had opposed to -- think done made I why we're product for this foundation, mine So is some better, good has to quarter. those one-time is get things a benefiting shift saying, The simply to maybe

Okay.

think, Drew question, I Second was on guidance.

Andrew Vollero

Right.

Justin, time. high revenues, this on quarterly level, That's at will a we and we'll with adjusted EBITDA. we're what guide ahead, basis, X quarter do do comfortable we'll

point, mid-XXs. we guide quarter. of midpoint of I is second take guide, XX% the terms the quarter grew first the your The in In

I month bit So very a there was us, it The there. Look, us, good a to we think for top is mentioned, March as little for decel bottom. a quarter mentioned. as strong I of of was

bit. at I just comps looking think the little a we're

that in favor see Jen kind bit first a the bit. year driving You have day couple the of first extra and point. Jen other of XX%. is But gotten we overall, kind us do all in a get I earlier, the to a like Easter we are sort Leap for this little continue works do. where start bit in a XX% comp little the of things at was think We'll tailwinds quarter mentioned, the things with in bit Day, if see The our was, little good IPO right? that's as worked as comp the I might think of tailwind an we little said, a quarter. from we'll those the of first quarter, it's solid a how of

keeping we're eye a picture, bigger on of think things, geopolitics. our I couple particularly

to can time sort of it where the brand you advertisers I what think on intra-quarter advertising that aren't situation one geopolitical if things they depending can from is, that time. be to want is pull affect thing the

-- plays of second. driven sort looking quarter, to. comp is the Those first overall, So momentum. and that really a elections second good those inflation are a the kind one and and of with probably the things continue quarter, at. see the in at they other was it quarter, we if quarter see look biggest we're we'll but that's of had the couple first it But out, we ended we We'll take how the couple of are that tailwinds

Operator

comes Our next from Eric Goldman Sachs. from question Sheridan

Eric Sheridan

X-parter could advertising number most the about you're when Jen, Jen. talking product out as resonating one, initiatives terms which for and and platform, initiatives I a to are thinking solve into the big your you is to count just bring the out if advertiser beyond spend advertiser to the and the advertisers what in or future either and platform friction are we more Maybe points of forward of XXXX budget get trying conversations, XXXX long-term as you those the road ask map? and cycle? And still deeper driving have or team count in on budget go

Unknown Executive

for partners. full-funnel attractive, good be And we the I leader And Thanks our advertising brand. funnel and our idea with and it I a that of think, differentiated, aspiration say is at advertising -- the can our ] resonates intetual all think [ of question. be is a very progress with in that. Reddit very the we've against the made leader-based I'd solution, -- to started with top

advertisers last quick the the in growth lot doing a serious Dynamic of click-through done how lot at app rates the the the value efficiency in continuing really we have now install the catalog And bottom conversions at end delivered launches delivering performance and we in think just with part the funnel. I of had of are and you ads, in we're bottom and like funnel, year of product mid the funnel work see at and the I with and think volume. and a work of

this is funnel of targeting in resonating. our being So of idea and terms full capabilities, think, really I differentiated being

down We signals bottom the for the focused laying of are end on funnel.

[ at CAG those. we'll Cerium did see of [ look ] a group the So more you work ] with we manager partnership in

important at the to signals that conversion continue against to solutions just models end funnel. these we're bottom testing So are into working start advertisers the with incredibly building [indiscernible] iterate. of the for spend and And

the think funnel. of the I and really, for real go you're brand and up funnel you going great in to So there's really That's truly open us wow, now to excitement mid-funnel doing is end full potentially about, lower exciting.

that our what are that's excited think, just additional objective. advertisers have particularly So about I to

Operator

Benjamin from comes Bank. from Deutsche next question Our Black

Benjamin Black

could the a second know could platform but to the I of you're near has the see but ad even users users for then be more us about or the transformative Steve, Great. the positive you build Steve, investments sure the And for implications just term. in sort one, growth? And necessary can Drew logged of the at development faster? excited you, longer I'm out for But monetize big fact of more not strategy obviously, potential sort just to of as a slightly of logged and pretty how program logged quarter out that in. if what a what of some are to growth, understand convert term, the that business developer to given the user rate, is this is help logged-out that higher

Steven Huffman

questions, Ben. Thanks for the

near-term developer Yes, first, as hundred a But platform developer it. platform. the relative very opportunity. playing with developers frame excited couple am now. actually it I I So about We've of would got a

work production. their of Some is in

of things of another of to But level can like that. see and in the we scoreboards interactivity. speak we stock and kind some As tickers development,

waitlist all year. later call thousands, open, there's the our get goal this like developers then the summer this started and so of this it monetization Our is and getting fully there off to features really in

so think And to lot a to opportunity of there's all there, trying on bring this I deck market. hands

the the developer really So new nicely I think platform year. this reticle together later dovetail and

question of users, from In product from terms users. Google. And they're them strategy we what don't they that a out, for out a give business logged-in try a user plenty the is in, as logged coming from looking the search, for view, the I of in today need any convert and out to a to logged see think logged is answer. dynamic want an in particularly session. best we into But of answer, point to have give usually between to They're logged us of bedrock particular yes, our user and logged we

is on are that experience. that various have I the know Reddit and look those users, look total not as the a particular looking platform as at are think profound reasons. down at community We beings are human join opportunity road. Now in the would to just the session, Those like DAU -- a that for any everybody of

that's that just want I question, okay. and Sometimes answer to to

think early other There many there, or that getting is on of an Most ad In can those have that detail I'd is specific still page. a add call of thing we pages. are a days I in very talking that logged we're on post cases, that's unit landing so really about our but out we product. say specific well-targeted important its a on page users. it's just, page, what all a a density to them we ability The monetize page comment grow advertiser

there's lots of potential in And users. out so I think monetizing logged

retention. app experience hits great the user what for or own the summary, future experience on I'd potential when to in page, their users as a users. they're really the do. today trying from first focus to monetization a on They maximize it, So to having opening out front them time look logged-in out a and a product represent giving the well. But represent great focusing point right in And at for our logged for also us of we potential coming logged view, their users

Operator

Our next from comes Sandler. Piper from Tom Champion question

Thomas Champion

building I'm about eye if little Steve, the overseas you wondering tools market. with you're that and an talk towards the could a bit more maybe translation machine

we're talks -- curious release helpful. learnings, maybe yearly maybe trends really thoughts all little product. And Jen, potential licensing I and or countries? Then there other the somewhat the a would in in underway? French be or being or early days language in just financially Drew just with Any with in think or the And French bit what the the maybe think France seeing it. French-speaking curious, -- just about the interested you're I very for very user either data

Steven Huffman

Great question.

first one So translation. the on

large do can we exciting the quality. And us This really another into translate just model, corpus human is a year it entire language technology ability language. One the most ago. with of level that Reddit for exist was now simply the I that's didn't things think translation at quite to

in. And we're looking testing so in doing promising. now. It's French this are first results is language the very the And

blue-chip see can a including you're if like France in entirely so Reddit, user of test group, And communities like all this big French. in in Askreddit, you

this users. growth would seeing these this as improved they're content then And And Google. and among site time also and we language indexed French to hope, get retention leading so is on by

start see And to users content to so coming we new that as well.

represents going think to start Spanish we so year would next as more product do languages here. We're be a really I promising the this one big think And polished, the I which opportunity. get pretty

So this is very exciting.

today statement keep statement everybody you world. if for true on to I that everyone think a I saying speak it Reddit home a true that the a want English, make has but in we

but it's not think I when, matter as if to a but of we possible. want that make fast as win

growth the best think in accelerating markets. And outside U.S. dramatically shot at this represents the so our our non-English I

Second -- Jen. licensing with start question for let's data about was

Unknown Executive

Steve. Thanks

like a markets, mentioned we've is working to are distribution with lead finance, there's social et access the Potentially us bit take over business maybe outside will deals learned marketing Steve time, cetera, business smaller we market lot a where sort business certain markets. listening, learn interest potential say things an a who There's one listening, but market. of players a in insights lot markets. interesting but a established established domain. to in financial grow the that new and clearly our licensing, data in established I on of think that of to side it's In is has very social well part those of market. I'd like is the barbell So learning players decision-making, to another as think verticals I it's which decision-making. for have And data of partners barbell Reddit little

that So thinking about. that's we're something

where important deletions craft in we respected us. partnerships, important partnerships and we model nascent want very when but to edits partners and important are and that making fewer builders. users us, long and how the have is probably say these understand how to on On not to are they is side, over the [ fit sure be I'd are that say, because of noncompetitive always these and forever, such how ] that unfold enough very grow we that's consider and is very case. It's about I to that them see side together. we partners or deals a not we're so partners -- are mean where the the And market I'd barbell the things midterm we are of it's privacy early think right sure want midterm. the other value. User to who deals, fewer AI folks just larger can handful a are even

are partnerships selective sort the that the those say of think pieces. the in of learned more I AI I'd So -- given were things we've all those

Andrew Vollero

add me on things the positives. let both side, Yes, Tom, financial two

the as deals I There smaller said it's X barbell been available are see Jen there. on think figure nice side. market, in the to

that's done. see been so get nice the to team and those And hard work

that's a as This begin sort for is pulling with. success a our piece business business, gross been we P&L data the thought you numbers. of has been So the probably really high then really of to be through that the see the in cost margin that the keys accretive flows other well and company in little the benefit would of we're a just of quarter like is together our less it quite is ours. And it. It's a preparing to to first one than the data cost putting

Operator

from LightShed Greenfield from Our Richard Partners. next comes question

Unknown Analyst

on I Google. about guess Steve, your follow up, answer I wanted to

AI? your searching things happen means Reddit very -- in like the using Is future and I I are to Reddit. Will that Reddit or to that is that this happen You like reddit.com Google or up be we when when when these sure flowing set and came will from getting is, it -- say I these to on term. I'm on, in Because I'd clear where are search, links I'm to the how get this you're I'm like and content love page, do And think to that I I This really go making help long indexing what an consumers go to that see? Google go like believe Reddit. Gemini doesn't I'm Reddit, and I trying I a from and but end from versus ChatGPT it coming something, doesn't for I a talked ultimately about understand consumer. AI good how guess just Google to reconcile AI But for obviously a what is platform, for of go AI. your say, and in traffic-distraffic your And and applications the understand to evolving? brand app impactful see you money, brand do I I

Steven Huffman

these I do you're for have in when have have so use to that's you Look, And using to have clear Reddit to to to Rich an really your the you like we agreements to question. example, us. and branding, if data link Reddit's you your have to are in that Thanks, far it's or important say you answer the ones very our Reddit, link think -- we point.

to be would we of position from like starting there. Reddit a We out are

good consumer. think it's I for the

I in and typing think think it's we been they're lived platform. extensions good really search. I into our are that know interested answers. time box, that a AI of as the in We've And a for of Reddit users what long for search, getting today products

is Reddit's no. take any be Now for us, credit rich will people able to The themselves take themselves in to and not data, answer send forward? going users

and I users it right? In themselves. folks data, on But use said. including ecosystem, data we think longer handling [ crawling whole historical Reddit who we platform the public no of enrich way our works, seeing past, I public are the benefited think our as increasingly, they ] hoard to

platform companies open-minded with used our users. Similarly, with search protect come about agreements the it's having that and to past, So we we've But preserve in training. and this for guardrails, it that. and with being open and we're for research, in relationships included will read like our want been

uses public. these will there really that Reddit are think think clear, license I I ever so And And behavioral really do circumstances important. already or are to not guardrails But that I data we is be under data data are important. want no of

to have no or And companies we're business. continue I think And for we're our repercussion. with taken to do But not don't continue give open and open so away. to it going data that just to so we're look, can expect take

Operator

from from Our next Bernstein. question comes Mark Shmulik

Mark Shmulik

you've underway you're public products as longer-term licensing strategy all get as more way about to of the through all company. a how the around those prioritizing different data of user one But visual kind a investments shared of Just Any that across monetization we dimensionalizing advertiser efforts think kind think diversification, thinking you Reddit economy, initiatives? as about ad efforts.

Steven Huffman

and Yes. have Drew Look, add. Jen I'll start to and see anything if

Our where most top of resources priority our the go and Reddit. of is core

is this then and so platform, And community the and on our the website apps ads the conversation business.

a think area. in I this tremendous there's potential amount of

even grow to So way then got significantly, I quite think we can the both that. users we've go outside more so the U.S. And a U.S. long and on in

really, beginning journey. of we're still our the just think with progress. much I happy like at feels so it There's very we're upside. But the

user and opportunity. And chapters kind what then search the and we the our next do and so platform economy how of couple about that's core of of future. And the think yes, we developer the

business the of initiatives. So rest these XX-XX-XX as our this future the then XX% a of I model and on like on right, core think

Now the for the business. platform expand to opportunities they're economy, fairway developer things very are I Reddit. and pretty platform our to our These, down sensible future the initiatives, search, grow user think,

far afield. so too And it's not

together core, the of growth that upside would kind I way. And the add? fit these all other but a you put the amount of of things it translation, itself. Jen, tremendous in nice Drew, international a I what machine opportunity, has think course, big in right,

Andrew Vollero

really investments. I business just Steve, of that the just here, profile From would encourages add the margin

I as where sort finding invest piece. you've are in We a great lead mean at The revenues to immediate first us ad business, think the licensing revenues of I stool, got and have headcount-driven. a least in user so to collection things kind and investments X-legged is, that's our -- licensing least then at right, of of the that that's many But no business Like this on really high-margin think we're ad business of in and capital. we the the want payback, here. where economy of terms X, business

here. But so businesses you accountability those just see easy an perspective, the track. term. progressing a to good the payback you're the margins give And easy It's are immediate gross what chance from for high to

how things rate. you revenue You to. set really of can think sort and accelerate we course It conceptually. need growth the sort if look up about of does right correct to investments That's yourself the for really

as the the of stool that's leg third relates coming this together the development to Now economy, it now. platform, user

back so the see first And we'll X doing fit think what of business, just of product are ends kind special and the pieces Right really being. work that easy dynamic now, invest financially Those the places you and overall, quickly are that to. really capital. your in margin, unique they're if where course can Steve, market we're more correct you to short up of term, but no high need pay sense I see

Operator

from today Securities. from Boone question JMP last Our will come Andrew

Andrew Boone

first the for Two, please. Jen.

just then, a of you're strength in-app here, the this trends that progress growth time across about key in bigger business how XX% think about and video corporate talk area in quarter, diversity is your focus. area. And onto Video spent as one you how business the at the there adding think Can picture of question. skilled the talk Steve, launch. video the I scaling about you and was about saw platform? a last SMB given key earlier you Can talked You especially you

Unknown Executive

do ]. piece me [ first the Let

fronts. Number You're geography, size. outside in growing diversifying of U.S.. Number our terms on terms advertisers of of two, advertiser multiple active one, monthly in

they're start And in more they performance channel, and us. What scale for I is performance-oriented. line. investment thousands which are mid-market they made And more of strength the be is to QX at advertisers on really an advertisers the area like those we I can the saw about improvements we the and SMBs, of in mid tend funnel, think segment Reddit. there some that benefiting on be top from advertisers just that in So

to that is against. continue something work we So

for the handful. XX last then something months, is monthly segment. we've active XX a adding a counts to focus as That's into growing expanded us over Verticals are advertiser in have penetrated that well. And verticals. We and in to our have touch lot and business lot while a we we're XXX continue only of in customer a advertisers, lines a segment, and opportunity these multiple top large of

businesses lot we just year-over-year, there's sub opportunity a and in verticals. and in a that signal so even just more see segments is And opportunity segment out and of lot just pharma that as CPG a the different grow there's sub-brands we growing and And like XX% finance there.

a it's priority So us. for

active thousands in We are at growing platform. And there's advertisers on scale just advertisers. our I that think monthly segment more particular,

Steven Huffman

important and time when video be of on to side stories, able content I'd as worth. more what -- Reddit, content is Okay. for And to to that types. video that whatever and Reddit. Internet. Video or obviously do content more say, Reddit try users use our on that's diagnostic one product people huge, different type type tell it's say More so you communicate video. more think they on should content you want as spend the think for of Reddit. But fastest-growing the being to you on about is a of Yes, no is is Reddit way it as

a better. into of our end. But the year of near going quality watching making that effort our updates making the And last video fee, player put static images, with in and just nice of video the also hugely future And got of experience from the of day-to-day in so just on packs some look, even and coming are images video to Reddit. in we've towards -- we've out ton important Reddit

is And so a lot together of things these our do how bring harmony. in we effort

media texts say video ads, that's still product well that a work can Reddit are making gifts core really construction parts mixed right hold and I'd is links alongside and under us. the where really of their feed so and And important now, to own been

there. but progress, also I for made improvement think some room think we've of I there's plenty

answer So we're is my to similar my answer on going search. to --

can experience I then Obviously, on playing the when monetization think we'll a on huge creation potential we start make I about product it's really and well think video performing talking Reddit. better. Reddit is the monetization. And

our now making creation is there on focus better. before right get experience consumption we'll So but long, and the

there's for think I of plenty improvement.

Okay.

us top we're Thanks, and Bye. you so for at but who And helping the folks calls, first folks. our time been exciting public Again, It's Thank earnings so long. think, again will to us think we for the of soon. so be much do your talk I I hour this we're the attention. for folks. with have grateful. really here, here,

Operator

This concludes Reddit's Earnings QX XXXX Call.

disconnect. now may You

Reddit (RDDT) 7 May 242024 Q1 Earnings call transcript