Reddit’s Stock Soars Over 200% in 2024 Will the Growth Continue in 2025?

Reddit’s Strong Financial Performance

Reddit’s financial journey since going public has been remarkable. The company reported better-than-expected financial results for its first three quarters as a public company, showing revenue growth rates of 48%, 54%, and 68% year-over-year for Q1, Q2, and Q3, respectively. This level of revenue acceleration is rare and has fueled investor optimism, setting Reddit apart from other 2024 IPOs.

For the first time outside the seasonal fourth quarter, Reddit recorded a profit in Q3, surprising analysts who expected full-year profitability only by 2026. Now, Reddit’s profitability target has shifted forward, with projections of positive earnings as early as 2025.

Expanding User Base and Enhanced Monetization

Reddit’s daily active user (DAU) base has grown to 97.2 million, a 47% increase from the previous year. This growth is further supported by the company’s advertising-focused business model, with ads contributing roughly 90% of Reddit’s revenue. Marketers are increasingly drawn to Reddit’s highly engaged communities, which provide unique reach that other platforms struggle to match.

Reddit is also beginning to leverage its international potential, with more than half of its users located outside the United States. Yet, only 17% of its revenue currently comes from international markets. Reddit’s average revenue per daily active user (ARPU) in the U.S. stands at $5.88, compared to just $1.32 internationally. This discrepancy suggests substantial untapped potential, as Reddit looks to enhance monetization strategies globally.

Positioning for Continued Growth in 2025

With over 100,000 active communities and a dedicated user base, Reddit has a unique position in the social media landscape. As more advertisers recognize the value of Reddit’s platform, the company is likely to see continued growth in both revenue and profit margins. Reddit’s stock performance and growth metrics in 2024 have set a high bar, and with momentum on its side, the social media giant appears well-positioned to remain a key player in 2025.