Reddit: disappointing US user numbers, share price falls

(CercleFinance.com) - Last night, Reddit reported solid Q4 results and encouraging forecasts, but investors seemed concerned by the slowdown in the growth of its user base in the United States.


The social media company posted a net profit of $71 million for the last three months of the year, compared with a profit of $18.5 million for the same period in 2023.

Sales jumped by 71% to $427.7 million, driven by a 60% increase in advertising revenues to $394.5 million.

The number of unique daily active users rose by 39% to 101.7 million.

For the first quarter of 2025, the San Francisco-based group forecast sales of between $360 and $370 million, and adjusted operating profit (Ebitda) of between $80 and $90 million, forecasts welcomed by the market.

However, these impressive results and targets are offset by a surprise slowdown in user growth in the United States", commented Jefferies.

User growth reached 32% in the fourth quarter, compared with 51% in the third quarter, a deceleration that Jefferies believes bodes ill for the group's future growth.

Reddit attributes this slowdown to changes made to Google's algorithm at the end of the quarter, which could point to a turnaround in the first quarter', the research firm moderates.

The stock fell by almost 6% early Thursday on the New York Stock Exchange in the wake of these announcements.

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