Reddit Turns Human Chatter Into Wall Street Gold With Blowout Q1

Reddit reported a blowout Q1, sending premarket gains as investors digested stronger-than-expected revenue, margins and upbeat guidance. Revenue rose 69% YoY to $663M (advertising $625M, +74%), net income was $204M ($1.01/share), adjusted EBITDA margin hit 40% and free cash flow margin was 47%; gross margin stayed above 90% for a seventh straight quarter. Management highlighted growing advertiser demand (active advertisers +75%), Monetization gains via Reddit Max (CPA -17%, conversions +25%), and the value of its data for AI (25 billion posts/comments). Reddit guided Q2 revenue of $715–$725M (up 43–45% YoY) and adjusted EBITDA of $285–$295M (~40% margin midpoint). The results and confident outlook point to continued revenue and margin expansion, supporting positive near-term sentiment and potential upside to the stock’s valuation as ad monetization and AI applications drive growth.