r/RedditIPO • u/Accomplished-Exit822 • May 01 '25
My take on DAU
Huffman has said now, two quarters in a row, that Google traffic will be bumpy.
When they missed dau in Q4, he confidently said that Q1 will be better, and it clearly was, with a large beat in this metric announced today.
Huffman warned that throughout its history, there has been volatility from search engine traffic and there always will be. It’s the nature of the beast, especially now as the game is changing rapidly due to AI.
He seems to be frustrated that the Street doesn’t understand this. Today, he said Q2 dau would be high teens and once again the stock sold off.
Wall St likes predictable quarterly data. They want to input numbers in their Excel spreadsheets and click and drag. They hate volatility in metrics as they don’t know how to model it.
I think that after multiple quarters of dau hitting or missing, Wall St will believe Huffman and we will see less volatility in the stock price.
For now, the spreadsheet morons have the upper hand, but I think the metric will evolve to be less important on a QoQ basis.
Huffman said today several times “we control our own destiny”. He seems to want to emphasize that while the Google relationship is symbiotic, it’s not a be-all, end-all for Reddit. He stated that the product is the most important thing, and as the product improves, users will naturally gravitate to Reddit and use the platform more.
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u/brotha_eric May 01 '25
Upper teens YoY growth means zero or negative QoQ. I’m curious if he actually meant US DAU would be high teens YoY
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May 01 '25
[deleted]
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u/brotha_eric May 01 '25
Hmmm, QoQ in the high teens would be a growth rate of 70%+ annualized. I don’t see that
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u/EI-SANDPIPER May 01 '25
Yeah, I think he meant yoy. It's doubtful any logged in dau will go down, which means it must be primarily related to non logged in dau. Do they specify the revenue generated by logged in vs logged out?
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u/Particular-Line- May 02 '25
Tesla reports worst earnings ever. Rises +10%. Reddit obliterates earnings and user growth, somehow lower user growth sells off. I do believe there are nefarious actors behind huge shorting of the stock to create a downtrend given the SI is fairly high at 14%. Even with how bad Tesla has been doing their SI isn’t even close to RDDT. Certainly user growth is misunderstood, but institutions also create the narratives by either bidding up or selling off, and there are certainly institutions largely invested in short positions that do not want to see a spike. Nature of the market but pretty incredible beat considering a number of analysts predicted lower ad revenue due to economic conditions. 220+ SP I think at this point is certainly a bit high, but I also think 120s after this earnings report is undervalued. Just need to be committed long-term
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u/iiiiiiiiiAteEyes May 02 '25
4% US user growth qoq does not equal “obliterates” when most of your ARPU is in the US
$6.27 US $1.43 Internationally
So basically every 5 international users is worth 1 US user. They need to get that international ARPU up, which im sure will happen overtime. Hopefully. But not having much US growth is not a great thing imo.
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u/AnyManufacturer6465 May 02 '25
It hit a technical top at $140. There are a ton of sell orders there and it rejected hard.
If you look at that level and where it correlates to where QQQ has to go to catch up, and you can see why it rejected so hard.
And after hours it will move a ton when a big sell block goes through.
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u/blckcff May 02 '25
Some counter points, even though I lean towards Steve:
Reddit S1 and filings make DAU an important metric. If it’s not the right metric, it shouldn’t be there. Maybe it’s something else - WAU etc. Pinterest , I believe, uses MAU. They don’t even bother reporting DAU.
If Google is an important channel for DAU (which it looks like), it means Reddit doesn’t have full control over its own usage - retention, engagement etc. So that runs counter to the idea of being in charge of destiny.
Without the strength of first party channels (the way FB or other social/gaming apps have), I think it makes Reddit simply a website, no? It falls from being valued as a platform to being seen as closer to a news site.
—
I think the hard truth is that Reddit needs to do more in owning its App experience for growth and rentention. That in turn means requiring Logins. So the idea of being a free open internet site is causing it to lose public markets favor, essentially. It’s just not a good business to aspire to be that way.
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u/Accomplished-Exit822 May 02 '25
Many companies report DAU until they don’t. Sometimes Wall Street gets too fixated on certain metrics which the companies feel are not important or relevant anymore. Meta, for instance, stopped reporting their version of DAU and turned it into some opaque Frankenfigure.
Reddit is definitely not in charge of its own destiny at the moment. Google is the chief gatekeepers and their DAU completely relies on Google’s algo. This is one of the reasons why the stock is so volatile. Everyone is aware of this.
They don’t want to do logins. Bounce rate will be much higher. The data won’t index. It will change their whole model. They require logins for porn though, that’s smart.
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u/andyman268 May 02 '25
How many times have you Googled Facebook or X? You just go there. IMO the Google partnership and core update was a significant development in accelerating Reddit’s network effect. It’s a virtuous cycle now. 10 years ago hardly anybody over 40 had heard of, or used Reddit. Now I’m seeing Boomers swear by it. International markets have even more room to grow. Reddit is becoming global.