Strong Quarter, Mixed Market Reaction

Reddit Inc. (RDDT) delivered fourth-quarter results Thursday that beat Wall Street on both the top and bottom lines, yet the stock still managed to retreat in after-hours trading. Because markets are never boring.

The social media platform reported Q4 revenue of $725.61 million, sailing past the consensus estimate of $665.44 million. Earnings came in at $1.24 per share, handily beating the 95 cents analysts were expecting. Revenue surged 70% year-over-year as daily active unique users grew 19% to reach 121.4 million.

The cash flow picture looked equally impressive. Reddit generated operating cash flow of $267 million and free cash flow of $264 million during the quarter. The company closed out 2024 sitting on roughly $2.48 billion in cash, cash equivalents and marketable securities.

"We're entering the next era of Reddit — defined by sharper execution, global expansion, and product innovation that puts real people and conversations at the center," said Steve Huffman, co-founder and CEO. "Our focus is on turning Reddit's authenticity into even more everyday utility."

Looking Ahead and Buying Back

For the current quarter, Reddit expects revenue between $595 million and $605 million, which tops analyst estimates of $577.17 million. The company is also projecting adjusted EBITDA of $210 million to $220 million for Q1.

Perhaps more notably, Reddit announced that its board approved a share repurchase program allowing the company to buy back up to $1 billion of its common stock. That's a significant move for a company that only went public last year.

After an initial pop in after-hours trading, Reddit shares reversed course and were down 2.02% to $148 at the time of publication.