Financial Data and Key Metrics Changes - Q3 revenue grew 68% year-over-year to 315.1 million [17][34] - GAAP profitability was achieved for the first time, with net income of 94 million, representing a 27% margin, nearly double the Q2 margin of 14% [44][34] - Free cash flow for Q3 was 1.74 billion [46][34] Business Line Data and Key Metrics Changes - Advertising business growth was driven by strong performance across various objectives, channels, and geographies, with mid- and lower-funnel objectives contributing significantly to revenue growth [17][19][21] - The number of clicks more than doubled in Q3, indicating enhanced lower funnel capabilities [20] - International revenue grew 57% year-over-year, with notable strength in EMEA markets [21][17] Market Data and Key Metrics Changes - Daily Active Users (DAU) averaged over 97 million, a 47% increase year-over-year, with international DAU growing 44% year-over-year [6][11] - The company exceeded 100 million DAU on several occasions during the quarter, marking a significant milestone [7] - The word "Reddit" was the sixth most Googled term in the U.S. in 2024, highlighting its growing influence [7] Company Strategy and Development Direction - The company aims to enhance user experience by improving search functionality and making the platform more intuitive for users [14][15] - There is a focus on global expansion, with plans to expand machine translation to over 30 countries by 2025 [13][12] - The strategy includes investing in new product developments, global expansion, and growing the advertising business while maintaining profitable scaling [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the current industry environment, noting stability and structural improvements in the core ad business [33] - There is cautious optimism for Q4, with expectations of continued growth despite potential impacts from upcoming elections [140] - The company is focused on turning profitability into cash flow and maintaining a strong financial position moving forward [51][34] Other Important Information - The company launched machine translation in five countries, with plans for further expansion [42][12] - A new Chief Revenue Officer was appointed to lead sales and support functions [31] - The company is actively exploring data licensing opportunities, although visibility into future partnerships remains limited [28][96] Q&A Session All Questions and Answers Question: Will Reddit be able to get more official accounts from government officials/agencies? - The company aims to create a space for businesses and entities to have an official presence on Reddit, enhancing communication and information dissemination [53][55] Question: What are the dynamics of logged-in versus logged-out DAU growth? - Management highlighted a symbiotic relationship with Google, noting that many users intentionally search for Reddit, which serves as a marketing channel to attract new users [56][58] Question: Can you provide a status update on efforts to improve on-platform search? - The company views search as a key investment area for 2025, focusing on enhancing user experience and monetization opportunities [62][63] Question: What are the growth drivers for revenue in the quarter? - Revenue growth was driven by a combination of ad stack improvements, vertical diversification, and the addition of new advertisers [71][74] Question: How does the company view investments versus growth? - The company is focused on measurable investments that yield quick returns, particularly in ad tech and expanding into new markets [80][82] Question: What are the key areas for financial focus moving forward? - The company aims to maintain differentiated revenue growth, high margins, and low capital expenditures to generate meaningful cash flow [51][34]
Reddit(RDDT) - 2024 Q3 - Earnings Call Transcript