RDDT - Earnings call transcript Q4 2024

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Operator

Good afternoon. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to Reddit's Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Jesse Rose, Head of Investor Relations. Jesse, you may begin your conference.

Jesse Rose

you. Thank everyone. afternoon, Good Fourth Full Reddit's Conference XXXX Call. Quarter to Year and Earnings Welcome

are Co-Founder Huffman, Wong, me Steve Joining today Reddit's and Vollero, Reddit's Drew and Reddit's CFO. COO; Jen CEO;

our you started, risks, other like include get uncertainties statements, results contemplated revise These outlook to and from differ is actual factors vary in and forward-looking remarks statements. by could date we Before these statements forward-looking filings. this to no represent any remind as cause forward-looking We results these today that statements. I'd will materially of those only may our included that the or our of undertake SEC Information forward-looking call. obligation update concerning to

financial set of measures this non-GAAP financial in to forth measures. Reconciliation shareholders. will call, and During we is GAAP letter discuss our to both non-GAAP GAAP

accompanying letter to r/rddt. release Relations investor.redditinc.com and and Our Investor our turn fourth call available shareholders I'll Investor subreddit, earnings quarter on now the website, press Relations' to are Steve. And over

Steven Huffman

countries everyone. repositories largest we're content accessible all of the this the aspects information nearly Thanks, end we've everyone. call. revenue, in X making marked a about company. knowledge one as XXXX, our public quarter to AI billion decades, human-generated around The of using Over $X new the DAUqs, world. year fourth joining, QX the for Jesse. make online, a and crossed Thank created a Reddit, human several of our our XXX earnings milestone In for first gained Hi, to users in million and to surpassed trove have of Reddit of welcome you and traction experience,

is seek. a the users X more growth on being enabling participate they is their information to and find global out languages, Machine in of International platform. translation goal Reddit way rolling communities in favorite international critical our is the to with and

our XX% GAAP faster year-over-year For with growing revenue were total than and total the second costs. consecutive X.Xx profitable quarter, we

Our grow into as across objectives, to industries, geographies advertising diversifying business. and brands their more customers ability tap unique are Reddit's

Over factor intent. surpassing users and opinions. valuable ratings. reviews, to aggregated recommendations trustworthy inform are XX% spaces meet interests Reddit purchase on decisions, and influencer purchasing star decisions connect most endorsements, people influential of offer where expert They consider Reddit for looking Internet the with brands conversations in for

We finished international year-over-year, led million growth growth marking XX%. year the with XXX.X by XX% strong at DAUq,

higher have Additionally, in did X last year years. grew steady or the Google and in periodic experience momentum. we every traffic but Search they've for so volatility we've last this and trend users has logged-in QX, change, from Late for maintained algorithm QX grown recovered regained some and by XX% the at rate search far a quarter upward a triggered from

time time logged-out fluctuate Referrals What search happened to users. they wasn't affect unusual. primarily from from and

the continues specific Our teams it, term algorithm in these many swing to the searching this latest and intent with saw changes increase updates along excellent users have to Reddit, adapting with was This are reaching the years suggests and interesting navigated because over job corresponding rise. which did query effectively. a Reddit particular propensity of we an

questions. conversation Reddit typically for engage or We Scrollers its to with seek. Reddit on of those and to Reddit, community who core up on X those end who see scroll types and for seekers users answers while their come

to Regardless or discovering on of need a few your search it's a why adding they Today, felt seamless end and to starts have their advice. information, what find the novel. for common way Reddit of journey, to where trusted Reddit. recommendations ago, query Just a user years they a people should path

to curated find first-class search that Reddit of insight should making truly on-platform we provides product seekers, for go-to Answers, Reddit. experience AI-powered on for the focused we're To provide trends prioritize. search tool information what place we an In summaries the beta a search discussions. These launched on community into and U.S., improve the the

it Although from everything updates best it's as still wildfires local opinions the about in its L.A. the to early to people already on proven stages, for coffee it's versatile maker. turn

to perspectives been comes that about people insightful it difficult and only English, the we're answers, updated of see that product. and elsewhere. When find at to promise we've we to with questions excels our available more subjective in mission it early important, Reddit using are have but to how never responses this currently this. Human answers providing reflect are excited statement It's

knowledge community to and to communities our a make Reddit for for knowledge. both captures work empower This and in source accessible creating as using Our is all. updated for their mission platform a

on guide, are as useful, and accessible, an make Reddit buy, we visitor faster, is and our and on you're use. to or this mission exist thrive a example, better user them focused easier helping any community first-time for avid Reddit making to enable our by well role With what to moderated. deciding, backpack to Whether

our of Together, world a everyone, that journey. building unique connects for shared knowledge with through model, and ensure that, are Jen. to we you part this that being we it strengthening Reddit for By again the I'll pass Thank is perspectives. community platform And everywhere. a

Jennifer Wong

strong for a year Thanks, Steve. Hello, Reddit. to and everyone. It quarter finish was the

$XXX and in platform and billion. year-over-year $XXX $X.X year-over-year million, Total revenue year, revenue improvements In QX, advertising across core positive QX and year-over-year broad-based business XX% for and drive continue XX% driven growth proposition to outcomes to for the to differentiated the to million, grew grew channels, grew strength advertisers. full by XX% geographies. unique verticals, Our objectives,

detail. drivers revenue ad our discuss in more me Let

advertisers We strategy and as advertisers the in both half U.S. the years. continues regions to in top and funnel than which the SMB to revenue grew and quarter. total be Across XX% and we tuning ad our address growth to business, better of new ad funnel. channels, QX, And saw scaled mid-market the fastest these performance-oriented a driver revenue of more EMEA a accounted and brand the drove for of year-over-year the across product set strength activating Our over are in revenue growth growing with lower platform. advertisers. X advertising funnel about is rate multi-objective across in be Mid- our includes we

growth auto, with finance, over verticals broad year-over-year, led gaming, top year-over-year, by and in underlying broader of consistent prior year. tech. grew XX pharma, loads, was the We and with by improved retail, personalized the growth XX% mostly verticals the double-digit U.K. across while ad geographies, our saw regions. led from ad deeper growth, pricing over impressions engagement, of and monetization saw XX% the fastest in XX and page, year-over-year growing user conversation growth We revenue X years Across international EMEA

impressions placement and increased optimization impressions The benefited work about brand Average from from quarter. and comments year-over-year per the we in user periods. of X% ads contributed as ad prior placement safety

We percentage mid-single holiday test new their during in driven us. Cyber the and this year-over-year. first-time continue existing to period near combination over the this of was digits retail term. from Revenue Five brands reach and up with grew spend format by expect a the to could Week increase customers This XX% who

moving our Now ad to stack.

and improving QX. progress formats. and solutions performance productivity one, of for sales three, advertisers each to meaningful ad force; focus of offering two, We and objectives; across ad on: solutions for advertisers our Reddit-unique usability areas made We in against driving our our our continue these

ad of performance our driving solutions. First,

first on performance the conversion contextual half continue the conversation We volume and the the relevance and year click half. volume drives also In doubled fourth QX, of ads page, of improve versus for in which consecutive higher doubled second conversion revenue. the volume quarter to we the

We conversion reduction when also continued driving tripled with compared CAPI, adoptions, share Pixel year. with Pixel onboarding action in covered of revenue by CAPI XX% only. the Conversion prior new cost half the per XXXX adopt and second improvements to in a The they see API of partnerships. Advertisers integration CAPI versus

sales for and usability productivity our for advertisers improving Second, force. our

capabilities launched of the the categories. Over course across X year, we've

where first strategy. improved and our our recently optimize ads deeper targeting with manager report center The advertisers breakdowns provide attribution windows historical to to is trends, keyword we

of in a to is how AI we continue and gen performance. as Next invest driver productivity

LLM-powered and safety. are minutes to decreases more faster performance. AI, minute, increases launched to for more advertisers, dynamic XX insights time both enabling In of and run creative our an which quality advertisers predictive SMB which review XXXX, and Generator We and acquired enabling AI launched creation, campaign adoption from Headline system, providing Memorable into X campaigns by driving and review recently ad we XX% review automated ad while improving ad also mid-market

also We and brand both DoubleVerify. IAS expanded safety measurements to

impressions found million offering launch we more XXX With be and Reddit brand solutions over America the And third, in XX% in than the IAS formats. and advertisers North solution tested Reddit-unique safe. against QX, to

and leverage insights, advertising community products We that community intelligence Reddit's signals. that Pro are can Reddit developing that solutions trends, help businesses grow, leverage

presence build adopt Pro seen communities. Reddit Pro testing real-time at we date, that Reddit. site on CES, businesses we've and To the and on Reddit seeing a As began posting organic uncover advertisers of insights within helps we companies engaging announced more Trends, participating tool an and thousands

for to perspectives and business valuable into In researchers, Reddit products Intercontinental Next, Exchange and a trends partners. and infrastructure that customers sentiment. users, develop vertical our provide connects entered on licensing our for financial authentic partnership our new our insights a is market financial content partnership Intercontinental anonymous market with data the shift new is conversations to This licensing with industry. source and content business. Exchange's analytics of insights a licensing unique I'll QX, advertisers, Reddit's to to explores content and we with into content

are who insights and Reddit. content, we Answers complementary authentic to reveal including recommendations we And so remain our are around when Pro the broadly, investing and our products Reddit partner our to we about diligent own that business. in building More that unique it's with do we and will Reddit

are pleased making be businesses that sizes progress building Okay, with and of multi-objective the looking platform successful all ahead, enables types on ad Reddit. we to a I'm in

we're evolving and I and Reddit Our business topic into road market feels industry and on Reddit. opportunity impact and big ad EU can landscape. heading map. could find that every about privacy we as excited ever. we're believe covers the every healthy, The our as I'm monitoring value events the well broader XXXX and is believe interest, positioned

we'll focus ahead, year on progress build the to areas date. our X that on In

engagement catalog believe Reddit-unique objectives. well as our First, Reddit-unique bringing that product as in work and features can communities ML to brand contacts this more and and shopping. experiences across more delivering more all objectives performance. communicating optimization This augment We more for of value bring from formats includes

We the stages while of more end-to-end drive across sustain automation We're our to stack. adoption the high bringing early objectives. help and customer to to us Second, enabling automation lower our to continue ad in marks in barrier our can service. performance believe this exploring performance

the grow resiliency customers adding business, broadening objectives, diversify the to Third, diversifying progress more our having good We've increase and of our of verticals, advertisers, all made multiple and continuing advertiser business. which base. use

Overall, there's We Campaign then to strong to many like I'm joining retaining believe advertisers for significant with Creation these advertisers outcomes the and proud by easier of and Pro, for outcomes. continue to and lead your support. and our have with features Thanks Reddit performance share efforts like onboarding growing generation our for Reddit we more and continued excited opportunity progress advertisers. bring driving opportunity partnerships, Dynamic Import about

Now the I'll turn call Drew. over to

Andrew Vollero

good the EBITDA the by that are everyone. Jen, year, incremental margins story income first, net strong X hit of than expanding QX adjusted million; ending for and our XXXX. was Adjusted QX. million throughout lines driven quarter; third, highest again, hit XX%, XX%. QX Once profitably. afternoon, was Adjusted growing Revenues Thank specifically: and Gross GAAP Reddit. XX% solid our in revenues to and peers. margins. been year reached quarter, a financial revenue EBITDA faster XX.X% They was hit second, margin margin grew opening QX a quarter consistent was $XX $XXX income key scaling In our net margin for EBITDA have XX%. you, in the

shares fifth, generating positive free reached dilution. had in XXX.X cash cash diluted $XX sequentially flow Operating flow. XXXX; We million, was flow cash million fell actually in Total cash minimizing all and and positive margin QX. to XX%. quarters flow Fourth, X

from doubled share QX Our by count. a earnings stable per helped than more share

Let on me more provide these a highlights. little color

the grew international $XXX outpaced driven XX% ramp region, of XX%, the QX, grew year-over-year, million grew first revenue, ad growth mid-XXXX. grew up U.S. U.S. since in XX% a marking revenues By time international in X% which XX% growth and QX year-over-year First, by sequentially.

for For drivers key the revenue summarize me acceleration. quarter, X let

ad First, success with new which building for our new platform investments, customer our to revenue members sales coverage. we're see to increase continuing include adding or products team

double-digit by primary Second, strong objective, Impression with and increases comments. while rates we funnel, saw now saw click-through like user by our revenue. across led which in high was improved impressions driven and ad of slightly XX% comprise performance new a pricing overall our were these the than gain growth, surfaces pretty advertisements, rates ad last remain ad gains ad year. less from ad third, we growth And consistent strength

revenue year, $X.X billion, up the at For ended XX%.

cost the total side, QX, QX, in but adjusted and In hosting cost areas: key to X cloud on pace. similar some growth Now was notable XX%. costs differences hiring

investments new we opportunities to we offset in margins. gross me the basis gross or see positively both increased challenges hosting points gross see benefited Let new agreements a learning like cost XX.X%. signed will and which could We on over likely revised growth, increases, providers, serve to for search. margins comment cost arrangements we In initiatives each. which these future from continue XXX to QX, our machine believe user driving this help key future factor in our key margins Over time, quarter, with

margins full the gross were XX.X%. year, For

net QX change modest and Differentiated cash a The the by XX% accelerated growth than with cash more from sales search. in growth in $XX brief heads, mention the was turn the meant investments year. cost flow. which into X% for growth was the again ended Total slightly driven X,XXX pace, a and revenue focus for flow We up adtech, slightly quarter, profitable we to were a XXX ago. up worth million profitability hiring people million, key second sequentially area year. and year QX headcount year $XXX is our GAAP was in and

flow full cash million. year, was the operating $XXX For

Our X% CapEx million $XXX the the for $XX less less million light, diluted at excuse QX balance well and of X.X% the dilution than was remains X% up only sequentially. $X $X.XX year. quarter or X% the me, million Free cash shares of X.X% sequentially quarter, billion, than was total the million outstanding IPO, less in for XXX.X X% for -- QX $XX the and below Cash in target. number in our sheet down ended excluding very than up revenue. in The million, flow to year,

in driven million, a $XX Shares of but about of performance and slightly increases Stock-based slightly prior well. in shares in stock by accelerated a compensation line a lower, was expense from portion employee the were QX than scale prior peers slightly part vested settlement XX% as our hiring from at with in annual full lower of net this revenue, vesting quarter exercises. higher the the and than -- grants, quarter, reflecting pace, taxes of

$X.XX share. doubled In the diluted fourth basic quarter, net income per earnings was and $XX per $X.XX quarter, share more than share $X.XX $X.XX. share was earnings from prior diluted million per basic was per EPS or the and where

we internal we'll visibility. EBITDA As which and adjusted for share we ahead, our look first where greatest is on thoughts quarter the the have revenue

in million, In XX% adjusted of elevated we EBITDA SBC XXXX, of the representing in could XX%; depending price to due with the approximately revenue growth. taxes to range a first quarter sequential XXX% we representing midpoint see million, of share $XXX the million $XX to higher estimate year-over-year revenue growth, range XXX% to XX% employer of slightly million In to QX, volatility. costs on $XX $XXX

low was revenue So proof margins CapEx and put, point important our focused financial differentiated goals cash and growth, Simply the and QX meaningful profitably long-term medium scaling we last generation. for turning on call. high outlined flow we an are in into

the there dimensions more is those delivered opportunities do and We many but to on much progress. in for all fourth more quarter,

as were seen the comments. financial my innovation North differentiated our to growth The enter they we revenue and That XXXX. remain Star. our execution financial growth continued goals positive have can concludes keys in will performance. these As be revenue will XXXX, impact We've on

turn over Now let Steve. me back call to the

Steven Huffman

Drew. Thanks, Thanks, Okay. Jen.

from in So the we've as get questions community posted our from past rddt in user to quarters, subreddit, we investors. have the

formal today. many will more alongside a this be Drew, take answers include possible many pros. of our also we and in Jen, and Again, after do user of to will Those we the as I now. will of to that call We as posted questions couple questions these those record subreddit. morning because investors want our tomorrow the conversations

Steven Huffman

Okay.

is How Reddit noticed going quality of ads the potentially could how types substantial you, since Jen. And developing ads a increase from question focused other QX. new I've differentiate First for of you are in forward? these quantity on platforms? and

Jennifer Wong

of things. Reddit. engagement the Thanks about for and your always that trove trusted are question. One Intelligence, really When the think we and formats, want Reddit, what's building about think that we Community to and X on are interest leverage ad about on I recommendations and opinions unique is Reddit

the in that we last saw launched you ads comments. year, placement So and

growing early we're terms what like seeing performance. there we is page but It's This of in engagement. in

we're excited So about that placement.

work Reddit, formats, enhancing excited community. brand I'm conversation unique our That's and X-way Me of engagement terms In to AMAs a Ask very there's a Anythings. our where on to or between and

from the all the level about something to about shopping, more of to provide is to want signals I community above work excited augment can then ads Also and and do, we've and terms their the think excited context. more come. to in creative perspectives excited bringing which in long dynamic And And conversion work this both product performance, finally, of we're brand optimization. and product is into

Steven Huffman

still Jen. profitability ended Okay. QX for XXXX? in profitability question expanding but full is maintaining you. showed or a Reddit in Drew, confident in loss. How second year Thanks, strong major XXXX is

Andrew Vollero

is the that on something the matters question. for profitability focused that. Really we're like Thanks really GAAP and question.

parts. question think me divide of the in I let a couple

loss $XXX total XXXX. in Let's talk about the million

$XXX isolated an double-click you that think really million related compensation. first to the if a $XXX that, was we accounting charge in I incident. That lost We see of you'll million stock-based on took sort quarter.

to that catch-up recognizing there for for the years you're the last a been giving long you've for is charge charges stock time. happening employees multiple your What's

So those expense way that charges. as you structured so the of stock a that we private all we can't company that catch-up had

drove health always what evaluating I'm really of look quarters, and on sort a looking I'm XXXX. the looking cumulative looking the statement the always basis. at you're sheet. why That's X the the The statement in loss statements. looking last I that's that flow at X company, So at cash at. the when balance profitable of were income at we I'm

financials well. EBITDA how quarters. been We are metric That a look X We've for you kind as EBITDA an the the going. also provide last of gives on profitable

that the So those are at business. look ways I the

the think way. the are all I to here. fast that a is scaling growth signs good strong the XX% in been very In us, trends, as Those Revenue I costs. terms good positive they're of has The as obviously, Xx mentioned, are as revenue to X margins in quarter. growing business

then we this made GAAP profitable, And obviously, made most were Last million million. quarter. quarter, we $XX about we importantly, $XX

profitability the the So reaching and scale on business quarters, of last watching inflect. couple the you're

So Those thoughts, I Steve. the appreciate question. my are

Jesse Rose

Great. take why Steve, the you. from line, we some Jen, the don't Drew, Krista, on please? thank questions folks

Operator

from [Operator of Instructions] with Josey Citi. Ron the And first question line comes your

Ronald Josey

all of and I Steve wanted and to ask Jen, about foremost, had you. guess, questions I first I But for, Answers. X Reddit

lot Just with rollout. more are insights some glean data the search conversational wanted queries then Reddit. Clearly, to on a of you maybe format? to this seeing the what on types hear And early results, about data with and there's insights of

you're in thus So on far any rollout? insights seeing what

there change Google was. Was to changes be some of helpful. on to Search engagement, impact maybe love what or any hear any That the sort in some Would mentioned you Steve, then And revenue? algorithm. insights would thoughts

Steven Huffman

Okay, to hear you. those. Ron. I'll from take both Great Thanks, of

Okay.

So Reddit Answers. first,

and basically December turned this it's So on a prototype. we in

this of set of question to of So was broad there are deep and of questions? And purpose kind is answers a to the Corpus? couple it's -- beta Reddit's questions. actually of compelling How the a getting answer a online

tests The answer those of to is both yes.

promising think up we're I start. to a very

even I think the excited at the learning I and am answers here. depth of

don't authors. What's online question I've things good like done answer are so there a example, coverage elsewhere get could that author way feel I has of ask turns it And nice For number annotated on it that. reading million and Reddit out so that times the is started with I that get best I been this get asked X to for you answers every to author? get you --

product, last of information thought X you're conversations "Tell that that's out interesting And us I those the product, was our in get But the is with conversations you preparing really other me on years deep the users season in X XX conversations theories cool were asked, absolutely about those for really content. for The relive played fan hours years, Severance or X." I to left XX about conversation thing only that interacting of the have the core whole Reddit ago. that of season last that X The everything. was what community day, like of massive and corpus and kind

to And that Answers. so we're starting unlock with

Okay.

we is this in continue on Over over app Reddit, place just than the Answers will there actually is navigate really, subjective, now, want We'll questions. users search. hard, interesting even the which So help to where year, product, iterate to be on answer here Reddit this and work going? this Search time, is separate but subreddits Reddit right product, a find X that from

as that's things So functionality these together, fast to Answers and this so thing. we get its it bring came out want own but we why to wanted out all

of where going. that's just think there. promise ton I excited a So We're about really

Okay.

last. third-party the these Your happen. changes as They all was year, provider. a twice second I'd the first, ballpark, Google say not happen time, question the Look, not actually about a

users end right down primarily was really It happened logged-out it U.S. at a but us, the affects this was X then the swing of shortly quarter. because And recovery interesting For in the it particularly a thereafter.

It this team of was during kind X, the recovered. interesting

consumers Reddit. that of the all which dashboard, for of own side, in says Reddit our on kind I happens in did the adapted We what different up Internet see see sorts on nice. increase end things term We query despite an reasons. Google think these want broadly search to

traffic our great rest QX, with as the our we search then we've mentioned, So a with and think, traffic. I of on both off also foot, started

we at grew up logs itself QX, pick international, for the in in it's steam XX%. think and users a all In areas count, up that over XX% and been that I way year. And to starting

So we at, and like going look forward. like the we things we're way where

Operator

Your Bank the with comes Post of of line from next Justin America. question

Justin Post

more a more Google and do a maybe Reddit of can what second, lot about now? couple Drew. you interesting those the than relevance? there or monetizable? of A content thought do how because could And search very X that Can on given helpful. follow-ups for Would on us how commercial really do think search's about a tools you've be Is percentage be much search then the queries, is which

thoughts any year? directions Drew, cost growth if or then, you're year. how about anything you us I cost can the And for total any headcount for thinking on don't know the on give

Steven Huffman

Okay. monetization, We'll Jen, cost. search search, Drew, do me,

good interesting because the on only continues relationship really and to are has And be focusing exclusively general. provider Reddit. So They we're is Reddit search who our symbiotic. been deep the Other Google and Search the is reason engines with entire search is call Internet.

learning that Reddit Answers, we're human fact on can that Reddit by with a to a on And there's But the ago this type written responds providers Reddit Answers in seeker behavior, I uses focusing is comment was is do on doing what's And we specifically, Answers like even Internet of on one we behavior. is many believed we're Reddit specific with X know think things Reddit by what broadly every that what more what being. Internet. that even Reddit. the months with which of than content is Reddit And we links

And highly set so answers. it's of annotated a

you about the you right? read click You And sentence, can it get your answer, the whole can it. conversation, can also so actually get on but see conversation that and

interesting travel, for and recommendations, there where an So of I are it. answer. really, advice like about answers of lots lots think There isn't this really is things there's conversations

is added your there's the answers came which seeing answer in bottom, the from. you And read we're benefit that at see where after you an Answers,

there'll posts whole bunch and So of be of a be there subreddits. bunch a will

interests expand actually so you Reddit. your helps And it on

number the finding authors. before communities. still you about all joined for I'm XX telling authors, I'm was Reddit to for new I and I not but going so on I've communities. authors. different found the a I've the And these been subreddits name years now of

So we build just really when can excited Reddit on about we for Reddit. specifically do something what

a market. there's commercial kind the Jen, the you to think in opportunity opportunity of do I take So of search? want

Jennifer Wong

inherently commercial in of you posts are an I really and as starting commercial that that actually Yes. being mean, About I start things the Reddit and there's in and as a interest. actually about But like you mean, commercial joining that ways, want products skiing, of gear many ways. lot an so classified services. is interest, is up XX% like

So I think Reddit has just naturally that.

What's interesting Reddit and of recommendations. idea exciting about Answers this is

what's think I and going are that's where you people buy, are because decisions, to search to Reddit. that think high-intent, search, people all shows convert of to And on if does recommendations place a is what Reddit that's make is the mindset in of incredible about really what on that recommendation the Answers an specific to for reveals -- is opinions the opportunity in incredibly and way recommendation. across wanting a

in So mindset what in action. for an us thinking a demand to meet a Answers people recommendations and buy, about opportunity put experiences a to of more we build and that that like provide, the want brand they the into that to that Reddit is to drive the or bring bigger marketer

the pieces time early building, But sense, intent we're X makes in at Shopping what shopping, is that is about around creative. is a an we're We allow create that to it's contextual. monetize develops. product the foundation opportunity the the monetization product level test. foundation there it us for as to Those already which targeting, you keyword us building have ad If right? think product

Andrew Vollero

XX% terms things, quarter this look fourth Justin, level of of the quarter guide that think here isn't cost where that out than range. revenue That's been further of visibility growth. on because in last in If new quarter, I more total then costs, of I guiding the and a point. adjusted than kind the not in third at business the has cost we a here, at year-over-year quarters. side kind We're the of couple found

earn within year of to We're of a And half we're a But in. still that place hard to guide. I you so a the where investing kind business, we're full the give our places quarter trying for us right? at about think overall, have it's

of I from we here. the bit the accelerated than a will a team was what little probably it building engineering prior still think more pace side. be year. hiring little a slightly small We're added year, the Last more search XXX. bit on We're hiring

So there will be investments there.

lot We on But needle I accelerate also a sales have some could projects want growth. of here. there's revenue discussions in-year -- move the quickly of that helped to speak our the investment to

so really information we're dynamic looking And that's at. that

hard what right it's costs now last established you give over year is kind of But think company full So we've about X growing have quarters guide. the kind of from kind and the a to of XX%. I

those I them did do seeing. driving quickly we think but can in we flexibility than more last We happen. They've been and we'll hire a do you've snap little that investments. make make in-year year, want things to bit the accelerated been revenue the

Operator

of Your Bank. Benjamin Black Deutsche comes next line question with from the

Benjamin Black

And the does sort retention, then an Just you just have growth? a you do Reddit across of licensing How follow-up U.S. a on X, balance on Reddit of on? growth impact data user the quick about which you on you X Answers Answers. most do the the And And alter sort even versus way broadly? Have you think think logged-in conversion? visibility ARPU ahead. on the X year engagement potentially about think longer more of term, on or seen

Steven Huffman

Ben. Thanks, Okay.

on English. So soon on it's platforms and right it's think like on out Answers, or only things retention. in so platforms barely on to even gate. It's yet truly It's all the just tell I all not too

and product point of a very more we're of So potential view. the from promising. all the technology looking testing the kind of That's

I is think were explain would general to if the we into Reddit this seekers. what very to on is journey excited user retention, often about lead as coming I'm how Reddit

their Google my about statement. learning with often that's Reddit I answers They're talking the question to opening that So what from was in has then questions. and coming

Reddit to eventually over would queries and their Reddit, of integrating be for like to helping on-platform us be better directly directly all something for I gets really think I to queries, as into the types better. think search user time, things those even search Reddit, able onboarding on search on interesting try refine come

is we And everything just I improving of think retention. And it on so sorts the of the doors. in about opens product name do all

is a the I But community for Reddit the perfect #X help well, retention that's find and Reddit, challenge up search for them, problem. shows think or we user when communities them a on

That's at will search really point. that So time. the get over

working in licensing, deals. In announced we're on what some and with I players just of here well. terms is We talking various We're think seeing market. you're X big still think as we're of still ICE, I still the the to yesterday,

at But ourselves. to the of the for the turning us looking opportunities data and we're kind inward also of value capture

data our best our we people at how can again, help amazing. Answers. And products other be build on and corpus so good we models, product well. Reddit that's something this arrive as but like that Like, really is build Sure, and can focus the hey, good should we

So things. all of we're doing these

yes, growth, on I can I then all the of opportunity still we very a I'll business, tremendous well. in think, users. as growth on think spend XX ARPU excited of of things we and build also, that but So users. user Like the And terms seconds on our still about we're licensing have in data amount

the to I countries of is U.S., in haven't most out close tapping think, number we're the world. We which in the come, And ground market. really getting mature a our around off

in Jen we've performance, very everybody on those our so things. questions. things turn to The are talked and Reddit. all communities, about, things Everybody potential and excuse products those these get community about machine we -- belonging. ARPU I'll like actually quality, And kind journey, some that around universe through of a of growth talk we search then high is new it of universal, has translation course, is both of -- literally feeling building wants touches world. on things looking over way are to belongs to efforts there Everybody the going is forward. the me, that or Communities see and life's everybody of product like

Jennifer Wong

on There's headroom And know to platform. users lot grow the both demand to over more to the revenue is trying we've we grows think also of in is ad a U.S. opportunity easier we're we of into parallel. an continuing and share by it time. manage as to it QX ARPU. in about in to It there's expand But it did the our make have that So nicely And divided users. driving our that, we we regions, is. managed way That grow before, there. so to our just world. it, nobody don't mentioned It drive more we by revenue what our verticals, that's the continue as advertisers performance, grow platform grow who rest

to that are parallel. And driver Look, and for in there. really work it U.S. very And a value load QX the growing lot some the addition a we grew And they of you ARPU for revenue, us see rest in U.S. as the ad in fraction the in the share personalized rest that nice of there so -- of adding the still world the growth again, ad in been brand users work. ARPU But for the well think of the is the more and worldwide, user really of a safety we format comments. there's and as a both as did as of has our growing just opportunity early. lot growth there's of our

different So for that there have augmenting are on a lot we of levers

Operator

line the Stanley. from Nowak comes question of Brian next Morgan Your with

Brian Nowak

have logged-out Steve, Jen. users. for convert initiatives the X Steve, the of wanted you that to to continue place to about in most progress to users out 'XX, logged-in? X as X, the you to Maybe of for internally you have convert I made talk on to are I logged-in sort talk in you to about to 'XX. what where focused look And us logged-out to you've continue to sort

XXXX. fruit I of the of pipeline bit to in Jen, you P&L? is higher of areas lot lowest-hanging what Can there's a the your products, little a help of that are of time a initiatives areas just where When longer improvement take manifest look itself versus sort little little could a a it bit? sort of across then, in advertising you understand And are us know some that

Steven Huffman

Okay. Brian, for thanks questions. the

So logged-out to logged-in.

I let's way That work So it of Reddit that is and has about first. we Reddit universal, Either think everybody a of on. users Reddit? for and start reasons. that with Well, the it's haven't likely think community didn't focused picture on the If everybody the us, there's isn't Reddit, which is is are U.S. is and we then increasingly Reddit X for tried less they've them. cohort heard or it they why

Those come front that And joining aggressive coming they're are or either they're they're in are so am opening what those where They're Reddit.com or like platform. open we to this users I to who from is coming because is external app. logged-out, that going door, to Google Reddit's right? the search to folks moment from saying us direct most the

XX% the It used And lose been a we've unique very hard. We log work choose of sign-ups easier so much, in. was to to much it be username we've the most done stuff. to that's used is there effective grinder. made It a on our

It's smoother much, now. much

with Google phone register and e-mail, a Apple. an with in with or number, log can You

And from really then fast really, So much improved onboarding there. log-in.

we interests, get feed. and So into your you what are the home

feed, Our them your ML gotten show take to much more related home better. our and the ability expand or that's interests you in subreddits,

to Reddit, top driver that's new #X the of users kind So now of join and for the that's driver communities on retention. or

has XXXX. been working in stuff well that very So

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in It them from term, Google, tapers the case app, it annoys download we'd term. and it a and short say, come in You then is the long actually classic "Hey, mad moves log That the makes work of numbers it works off. the in." doesn't people,

go the So other we actually direction.

we coming customers answers, want you're happy. search, What trying you make Answers, to are answers. they to the give give for? We're them there from our right? If

They're not the moment. looking to join a community in

our the things looking on not for they Answers make seekers, be idea amazing So work mission can Reddit and Reddit users so at that's just having that important include search itself ask that specialized to we learn landing giving these Reddit that's Reddit. so the there can seekers, literally amazing of pages questions answers? them so is forward And is can building that for to our scrollers, products expanded we've specific it. us This like

I and knowledge what remarks, mentioned accessible that's make so the in to empower communities opening all. my And

about to So each a of these us lot of what cases we're doing specifically. think requires

retention. higher what that's that so And leads to in leads the

the question what's was in easy What's hard stuff? about, XXXX? Jen, the Okay, the stuff

Jennifer Wong

Yes.

models worked that we today, work, map, has I performance. road the that ML know to applying think, things applying so extensively that are, lower-hanging of more in well don't which ML, mean, fruit, things terms I optimization, we right? brand, In do

works, can performance I really for applying to think ML applying that We for really that our brand significant deliver know opto. formula advertisers. so

you so And an to want also impact Second grind standard getting is finally, not But measurement. forever, The And opportunity that performance. frankly. work there for work. so we're do to that to that important excited around then There's you conversion see do spend modeling, and you far a year. optimization. work we're on you'll credit this that away an driving. for us moving on really do that creative much creative at in That's industry we really variant is, time that the It's value that I that significant that's something but can us. area have think, such do optimizing

in rest is And the the that. continue of map, at way grind The you'll improvement opportunities. Reddit-unique performance to of our of in and is of our us terms about think, I road of use, again, continuous advertisers, for see terms ease terms in

Operator

the question of comes next with LightShed line from Rich Your Greenfield Partners.

Richard Greenfield

of sort loves concerned Google Reddit the key Google that I of prioritizing -- I are think Reddit. What sort few that's there's some the I are change in algorithm? a think view questions got was of about. of a exactly did lot and investors been

exactly be And are changes Steve, than how that confidence this I comfort what changed? or future going So one? more get not to problematic guess, do you

what just to revenue, given think implication think QX the you change so then you what Steve, would that not Google questions. about we as users. was means algorithm logged-out that was comments that for said there of in your you that, about Google adjusted think, could any I is DAU growth what I had And the be great. if X if no minimal, for but growth is I sort resuming could apologize the around qualify it's the mostly very change could impact QX, assume the see about way underlying us is we QX? that, for give on

Steven Huffman

All Rich. Thanks, good.

what's not three, no did What worried say revenue Correct. -- revenue change? place I'm Google Number -- assume No QX. Okay. QX, it for can't be my my feel revenue having assume no it's we're And adjusted it about impact? was on Look, about but numbers specific pace think not impact. we on this I very put what but look in two, impact I suspicions it. don't QX? but we'd swing have if I the revenue in to in good not like to down there, and that sorry, the conversation

Google from time everybody. the I look, as see Like all volatility said, we does

a blogs a the times couple year. You can read of

this is department. they so concern with us from X a better great. collaborate call there's in can us ways, relationship We Our them of including how to continue number in

Operator

of Gawrelski with Wells question line Fargo. comes the from next Ken Your

Kenneth Gawrelski

Two, if I may.

of you maybe 'XX maybe and made count, advertiser about think grow Jen, side? self-serve back the talk, you count, to you including your grow the progress place on as 'XX half initiatives to that you 'XX maybe in focus advertiser could and in about the maybe talk about could have the initiatives First, you've in

platform conversion getting rest the about improved that the on even drive -- search and And which from -- Could a drive on the and to search just want it then you bit different platform? it little to angle, Answers the the may the is second its talk that the back maybe and intent of growing power signal and is to power maybe platform. across of intent the ability I approach go aspect and across engagement of a the

Jennifer Wong

can I active the So about first take X advertisers.

we year-over-year So really saw to QX advertiser growth. quarter-over-quarter and We see monthly continue count. for our healthy that active in

the continues. on the that Again, advertisers many with progress pleased there's more there. platform, we're diversification that be can but So

activate Headline in of just ease lowest terms gen a takes What's focus just combination activation, on making things running onboarding, the simple or get out unlocking Generator, the is getting allow like the One, of kinds click. able being of of our on in that platform. much of terms to semi-automations automating use a creative more max it and things. Those to AI for just to of platform, cost clicks on -- smaller like optimize advertisers up the friction

As and mid-market some a It's We them what and terms for and on They're process. there's X, treatment, nicely. average on advertisers filtered that Tier And growing that's a call sort very reminder, the revenue our helps through been on growing we do of strategy very are SMBs. treatment that light see the a managed in really growing the do we give X help of nicely can platform. is Tier have with And be scaled focused in those them it not more but focused really, business right we in lot self-serve now. their SMB, retention engagement. worth managed. they that to But we're

into drive that continue XXXX. will We

at doing be the of will advertisers. We to more the funnel acquire top work

work with we team platform. website, acquisitions top partners year. business as our funnel, we marketing, So That leads doing paid the of with mid-market bring that some established of in in last then pods small been our sort continue the relationships can into work embedded we've of in who that will year, in around as terms well this businesses building SEO who

which presence platform know a become and then advertisers. on they for businesses landing can spot the Pro, Reddit Reddit, to have is Developing where get a

ways all are in funnel the expand to the new bringing for that top on starting of our we're these the work So advertisers.

Steven Huffman

Well to interested Okay. is retention for is figuring typing into mean, about how question about search was search, foundation was And out box, just the Reddit, are I'm what which in. what for I for. users literally a your and this in. key interested growth, amazing. opportunities of so they're is with the part search why is talking is second this I the

then, find course, to So up, interest right? that of up it's Reddit. And pick us They signal. amazing on click their on for they actually

then they us, not can only subreddits they they and follow. join find tell do So that

view. point that from incredible of amazing all signal course, as monetization that you And it's know. potential, So of has

users So it's I It's search mentioned. I one for where a that for of search great day. myself, core Reddit product And like for those is for things just great the new it's on every reasons users great is monetization.

day So product it's all not on that a our a we that's of every itches. get scratches

it. we're So excited very about

Operator

Goldman Eric from Sachs. with Sheridan comes Your the next question line of

Eric Sheridan

building opposed think user advertising initiatives you've how business about either the strategic out density think around and be the a the of funnel geographies? X-parter sits about Maybe by should just optimization globally internationally more where business or your for proven you the or side to about the what the monetization to domestically, contrasting we domestically, more business. runway on to relative international When priorities as thinking

Steven Huffman

dollars. Okay. X users, [indiscernible] part Part X,

Okay, what I at so users, the think there. very beginning

U.S. non-U.S. roughly So versus Reddit XX-XX is

Here are is in space XX% the to XX% non-U.S.

in have we because are range because reason is We no that to that communities universal. universal, believe be Reddit won't

think So I the there. is opportunity

well, search. today U.S. we've is it's performance help but talked Product Those the helps everything as us the our kind quality market, only outside right? about U.S., in mature growth really, always of in about grow about works. quality us and grow things most Now not the

are that promising. Now a initiatives in we very addition think to that, have couple I of

of about machine We've talked times translation. a number

markets our to cost was because which We're the so dozen has France for now out And that rest countries, that. year more throughout a XX% just rolling the country and focus we've to come right a outpacing themselves us the down France. is of half machine expand this languages faster. that's growing even got first world the of in XX% continue first. The and to France, it are into translation the than U.S., we'll within deploy

there's then our community work. And

example, in well. of kind CDs, countries moderators, And world making number country the have of kind exist, areas, the topic important of for meet-ups, we're identifying recruiting all communities that high-touch we sports, training in doing doing work. moderators, cultural So areas, people sure around a diplomatic as

our is work because So And communities the are there is working. potential universal.

We right? then because can't will growing follow communities, force the it, nicely. And it's the users. coming but very along work we're Now it's revenue high-touch

Jennifer Wong

us. users similar say entered become into an Yes. follow which have top we we U.K. has the in one I just like intentionally happened would markets and mature for markets the to of more the the Google on in what do the getting U.S., Reddit be term are terms. U.K. And to

that's a again, our base created, awareness and of understanding So also platform. of stronger

build we ad the and advertisers works for globally. ad it's stack in everything It the global. Look, in platform,

benefits So we and they the the of get use the all performance gains into ease of built the that platform.

have we in focus as to rate with we advertisers, again, from we advertisers some are our acquiring platform. QX, investing We a of invested in investments that more marketing bringing result in and saw onto of that EMEA made. more more you a customers in is acquire go-to-market And the saw that EMEA on teams, and growing growth the

So we feel very good there. the about opportunity

Steven Huffman

for we question. think I time Chris, last have X

Operator

comes with Martin Company. Laura & question from That Needham

Laura Martin

DeepSeek. and time, against we're And I'll up it's on just stick since to X

you as and a my companies moving DeepSeek, lot also of to So open Facebook seeing are and those highs. DeepSeek of all-time models language know, their you're source. over hit Both large are

language question are My for both and open my deals is, you question are content using have these in creation revenue And/or guys does with your the large to threaten models open fact, Google coming your content large if, of language for win So you OpenAI. language proprietary models? it models, battle of from your the models you your help licensing stream is, large customers? with

Steven Huffman

Okay, questions. thanks. Two great

kind cut on company, We period? except AI X every it, first love Yes. in half. So just models. open-sourced of the question, it let Earth, me Are and we using for

of And we models. And use so I there. think we use amount open make source We our tremendous own. look, commercial a opportunity models,

would source seeing the with think pace happen exactly technology offerings, Open and ultimately, will keep will it to X to what become we're years this commercial happen everyone. be I so we what Access accessible And said is ago. commoditized. will

aspect right, I this for basically, business it's, benefit course, And it's generation, internal and that's search. of industry, from the And every moderation, think of copy exactly tools, great safety, for can great what's our because also technology, us happening.

how answer the The DeepSeek part second does is this The your models including data. exists, from short in of Reddit is Look, impact every licensing? including our opportunities does used that DeepSeek not. stole it and model foundation that question

data. exist something These not without that's we've Reddit that So accepted. models do

The engine access and information, is what less XXXX. But to information. over that stops are is we over thing with getting relevant If in time. a up-to-date search time. foundation level. less ongoing it stopped selling and it new gets It indexing the less gets just useful Imagine same less

of hair on dryer so of information. headphones human all up-to-date you And a aspects a steady supply experience. need is is Reddit but and supply new tell the of do. information can't try listen Reddit experience about And a you can to right? or the what and users AI like,

from AI tell to sort information And what you through information comes and you should is can't like that a super do. of so breakup valuable. it's That Reddit. go what

we excited very and don't see we're situation the open I from there. change models. about are source any actually So the experiencing, change It's no already

Jesse Rose

and We look time for Steve, us, joining. Thanks, forward speaking you spending appreciate Great. Thanks, Drew. Jen, everyone, to again some we soon. all with

Operator

XXXX Earnings Quarter Call. Year Fourth Reddit's concludes Full and This

You disconnect. may now

Reddit (RDDT) 12 Feb 252024 Q4 Earnings call transcript