Rich Duprey
4 min read
Quick Read
-
RDDT reports Q3 earnings Oct. 29 with shares down 37% YTD and Q3 revenue guidance ranging from $860M to $870M, implying slower growth of 47 to 49%.
-
Reddit Max advertisers grew over 60% from Q1 and Max revenue surged over 150%, with its broad rollout to all advertisers launching in September.
-
Google’s AI Overviews threaten the search-driven traffic Reddit monetizes, while analyst Q4 consensus of $1.05B would mark Reddit’s first billion-dollar quarter.
-
Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor)
Reddit (NYSE:RDDT) reports third-quarter results on Oct. 29 with shares down 37.25% year to date. Management already guided to slower growth, so the key question is whether Reddit Max can carry the quarter.
Record Profits Meet a Cooler Guide
Last quarter, Reddit posted EPS of $1.25 against a $0.9673 consensus. Revenue rose 61% to $805 million, advertising revenue climbed 64% to $762 million, and adjusted EBITDA margin reached 43%. It marked the eighth consecutive quarter of over 60% revenue growth.
Then came the guide. Management forecast Q3 revenue of $860 million to $870 million, meaning 47% to 49% growth, with adjusted EBITDA of $385 million to $395 million. Search referrals turned choppy late in Q2, and visibility remains low.
Shares slid 7.61% over the past week to $144.25, below the $180.90 level at the last report.
Analysts Already Expect Reddit to Clear Its Own Range
The revenue consensus sits above the top of management’s range, so analysts expect Reddit to beat its own guide again.
Learn 7 Ways To Generate Income With A $1,000,000+ Portfolio
If you’ve saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
Reddit Max Adoption and Search Traffic Will Set the Tone
Reddit Max is the key factor. The AI-powered campaign tool automates targeting and creative, and advertisers using Max grew over 60% from Q1 while Max revenue grew over 150%. The wide rollout to all advertisers came in September, so this report offers an early look at broad adoption.
