Reddit's Q1 2025: Navigating Contradictions in Traffic, Ad Growth, and Data Revenue

Google algorithm changes and Reddit's traffic impact, ad market and user growth expectations, data licensing revenue sustainability, search functionality and user growth, advertiser and user engagement strategy are the key contradictions discussed in Reddit's latest 2025Q1 earnings call.



Revenue Growth and Business Momentum:
- Reddit reported revenue of $392 million in Q1 2025, marking 61% year-over-year growth.
- This growth was driven by strong performance in advertising and data licensing, with advertising revenue contributing 61% to total revenue.

User Base Expansion:
- The company ended the quarter with 401 million weekly active users, up 31% year-over-year, and 108 million daily users.
- Growth in user base was attributed to strategic improvements in onboarding, search functionality, and international market expansion.

Advertising and Performance Revenue:
- Reddit's advertising business saw 61% year-over-year growth, with performance revenue contributing more than half of the dollar growth.
- The increase in performance revenue was driven by investments in ad tech, machine learning, and improved measurement tools.

International Market Growth:
- International revenue grew 83% year-over-year, marking the fastest growth rate in over three years.
- This growth was supported by enhanced ad tech capabilities and strategic market expansion in regions like the UK and EMEA.