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Reddit (RDDT) reported significant growth in its advertising business, achieving revenue of $358.6 million in Q1 2025, a 61% year-over-year increase. The platform’s Weekly Active Users reached 401 million and Daily Active Uniques hit 108 million, both up 31% year over year. This growth is attributed to Reddit’s new Community Intelligence suite, which enables real-time monitoring and analysis of user conversations across subreddits, thus enhancing campaign effectiveness.
Despite this growth, RDDT faces competition from tech giants like Alphabet (GOOGL) and Meta Platforms (META), both expanding their AI-driven advertising capabilities. While Reddit’s community-led engagements provide unique insights, GOOGL benefits from a robust integrated advertising ecosystem, and META strengthens its offering through personalized ad campaigns across its platforms.
As of now, RDDT shares have declined 18.1% year-to-date, with a forward Price/Sales ratio of 11.8X, compared to the sector’s 6.36X. The consensus estimate for Q2 2025 earnings stands at 19 cents per share, a positive shift from a loss of 6 cents per share in the previous year.
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