Reddit Q4 Earnings Preview: Can Recently Public Company Beat Estimates Four Straight Quarters?

Reddit, Inc. (RDDT) is set to report its fourth-quarter and full-year 2024 financial results after market close on Wednesday, February 12, 2025. As a recently public company, Reddit has been on a roll, consistently beating analyst estimates for revenue and earnings per share (EPS) in the past three quarters. The question on investors' minds is whether Reddit can maintain this streak and deliver another strong quarter.



Analysts expect Reddit to report fourth-quarter revenue of $404.63 million, representing a year-over-year increase of approximately 68%. This would be a significant increase from the previous quarter's revenue of $348.35 million. Additionally, analysts expect the company to report earnings per share of 25 cents for the fourth quarter, which would be a significant improvement from the third quarter's EPS of 16 cents per share.

Reddit's impressive financial performance can be attributed to several factors, including its data licensing strategy, strong advertising growth, and expanding margins. The company has been early to the trend of media companies being paid to license out their data to the likes of Google and OpenAI for AI models. These deals have helped boost the financials for Reddit, with AI data licensing contributing $33.2 million in revenue in Q3 FY24, marking a new revenue stream.



Moreover, Reddit's advertising business has been a significant driver of user growth and engagement. The company has shown impressive revenue growth in this area, with Q3 FY24 revenue up 68% year-over-year. Reddit has also been able to expand its margins, turning profitable with a net income of $29.9 million in Q3 FY24.



As Reddit prepares to report its fourth-quarter results, investors will be closely watching the company's revenue growth, EPS, profitability, and user growth metrics. If Reddit can meet or beat analyst estimates, it will mark the fourth consecutive quarter of revenue and EPS growth since going public. This would be a strong indication that the company's data licensing strategy, advertising growth, and expanding margins are sustainable and can continue to drive financial success.

In conclusion, Reddit's Q4 earnings report will be a crucial test of the company's ability to maintain its impressive financial performance. With analysts expecting strong revenue growth and improving profitability, investors will be looking for Reddit to deliver another strong quarter and provide positive guidance for the future. As Reddit continues to capitalize on the growing trend of AI data licensing and expand its advertising business, the company is well-positioned to continue its streak of beating analyst estimates and driving shareholder value.