Reddit (RDDT) is set to report second quarter earnings after the bell Thursday as Wall Street scrutinizes how changes to Google Search’s algorithm could affect the social media platform’s daily active users, which fell below expectations in the US in the past two quarters.
Wall Street analysts tracked by Bloomberg expect Reddit to report earnings per share of $0.72, up from last year’s loss per share of $0.06. They project the company’s second quarter revenue to hit $425 million, up 50% from the prior year, according to Bloomberg data.
Analysts expect global daily active users to climb 20% from the prior year to roughly 110 million for the period and US users to rise more than 9% to 50.5 million.
Reddit stock rose over 3% in premarket trading on Thursday.
Reddit shares sank following its quarterly reports in February and May despite earnings and revenue beating Wall Street’s expectations, as changes to Google (GOOG) Search’s algorithm created volatility in traffic to the site.
Google accounts for 40% to 50% of Reddit’s traffic, according to JPMorgan analyst Doug Anmuth, who holds a Neutral rating on the stock.
Investors are concerned that Reddit’s global daily active user growth is slowing. Daily active users (DAUs) increased 47% in the third quarter of 2024, 39% in the fourth quarter, and 31% in the first quarter of 2025.
Following Reddit’s first quarter results on May 1, CEO Steve Huffman spoke about the issue, saying that “given that the search ecosystem is under heavy construction, the near term could be more bumpy than usual.”
“[W]e expect the market to focus on the DAU trajectory, even if RDDT delivers another material beat on Revenue/EBITDA,” Jefferies analyst John Colantuoni wrote in a note to investors Monday, maintaining his Buy rating on Reddit stock.
Reddit signage is seen on the New York Stock Exchange trading floor prior to the company’s IPO in 2024. (AP Photo/Yuki Iwamura, File) · ASSOCIATED PRESS
Reddit shares have partly recovered losses earlier in the year, climbing roughly 70% from the stock’s low of about $87 in early April. The stock spiked in June after the company launched new AI ad tools for marketers at the Cannes Lions Festival.
Still, Reddit trades far below the highs above $220 seen in February before its fourth quarter earnings report, and shares are down nearly 10% in 2025.
Analysts at Needham, Deutsche Bank, Jefferies, and Raymond James reiterated their Buy ratings on the stock in notes to clients in the days leading up to Reddit’s report, as concerns over volatility in its traffic waned.
“The bear case (that Google Search will no longer send traffic to RDDT) is not playing out,” Needham analyst Laura Martin wrote. She added: “AI-driven ad tools … suggest RDDT is already monetizing GenAI.”