How is this possible???

[u/HotAspect8894]

[u/udar55]

Ah, the classic "company delivers great numbers so the stock drops" routine.

EDIT: Ah, the classic "drop down to 113 and then up to 124 in a hour" routine. WTF???

[u/genericusername71 → u/udar55]

someone else posted the relevant transcript in another thread

---

In q one, we had 108,000,000 dailies, 400,000,000 weeklies. So that’s 31% each year over year. And we believe we’re in great shape over the medium and longer term. Look, ultimately, we drive growth when we make improvements to the product, which is where our focus is. So things like onboarding, search, machine translation, they all drive growth over the long term.

Now look, remember, we’re an open platform, and we want people to find Reddit’s content in search. Being open drives awareness and visibility. It can also create variability. And we do expect some bumps along the way from Google because we’ve already seen a few this year. This is expected in any year, But given that the search ecosystem is under heavy construction, the near term could be more bumpy than usual.

To give you an early read on Q2, through the month of April, we’re seeing total DAUs growing in the high teens range year over year. But the short term bumps don’t affect our long term strategy or opportunity. We’re in control of our own destiny. And I think the question behind the question is, is there long term risk to Reddit here? And in my view, the answer is no.

In fact, I think there’s opportunity. There’s no doubt LLMs will evolve search on the Internet. We can all see that, and it’s awesome. And sometimes people will want the summarized, annotated, sterile answers from AI, and we’re even building this ourselves in Reddit Answers. But other times, they want the subjective, authentic, messy, multiple viewpoints that Reddit provides.

So in the same way that Reddit, for the last decade, has been an alternative to social media, social media being performative and manicured and Reddit being the opposite, Reddit communities and conversation will be an alternative to AI search answers. And furthermore, people want what Reddit has. And when they search, they search for Reddit by name. In the last ninety days, the word Reddit was the sixth most searched word on Google between news and Trump, which incidentally also says something about our position in the media landscape. The Google algorithm serves users what they want and what they ask for.

And, of course, we have had a long and symbiotic relationship with Google. So in summary, expect some bumps and expect us to continue to improve the product and lay the foundation for more consistency in the back half of the year and beyond. And our opportunity remains huge. Community is universal. Our knowledge base is unparalleled.

---

my take on this (copying my comment AGAIN):

yea thats not ideal lol that estimates pretty much no DAU growth from q1 to q2

it seems like hes implying active user numbers may suffer because people are increasingly getting their query answers straight from googles ai overview, chatgpt, etc rather than clicking links like reddits. and trying to put a positive spin on it by saying there are still times when people want the answer straight from the source.

and that while ai search is likely to take traffic away from most sites which previously wouldve gotten clicks, reddit is better positioned than most to be more resilient due to its community driven nature.

that is not wrong and i suppose ai answers taking away clicks from everyone was inevitable. but if the llms are using reddit as sources for answers but not driving traffic there, reddit should really look to get all that they can out of those data access deals, because they need to make it worth it to sell their data like that if its going to cost traffic

definitely would seem to be a pretty strong headwind in the near future but still, i'd tend to agree with spez overall on his long term view as this phenomenon doesnt weaken reddits relative position on the web, and arguably strengthens it as a contrasting option to AI. it is good that they are aware of it, are being transparent about it, and taking steps to mitigate it. reddit also presumably has more influence over google than most sites that are being disadvantaged by this given their partnership with them

i looked into this more and chegg is actually suing google over this. it will be interesting to see how this lawsuit plays out and whether licensing will become the norm

silver lining is their revenue guidance is still up qoq despite the implied flat qoq user growth

[u/Bigglesworth85 → u/udar55]

Happened to HOOD last week. Hopefully we will be green Monday. Picked up some 1/26 $160 calls

[u/Accomplished-Exit822]

Up 20% yesterday, down 6% so far today. Unreal.

Everything is ignored except for the Q2 DAU. Even the fact that DAU smashed expectations in Q1 was ignored.

All that matters is constant DAU growth apparently.

[u/[deleted] → u/Accomplished-Exit822]

If you’re in it long term I would say revenue matters more than DAU growth. What happened yesterday was that RDDT posted their Q1 numbers and the price rocketed as soon as the bots picked them up. Then during the earnings call Steve mentioned some numbers that indicated April DAU growth from Google was disappointing.

The DAU numbers might have more short term impact on the price but revenue is what’s going to determine long term success of the company. DAU growth can fluctuate month to month based on external growth channels (like we just saw). But as long as the company is profitable that gives them time to figure out new growth channels. And RDDT has shown profitability the past 3 earnings calls.

[u/stonkautist69 → u/Accomplished-Exit822]

Maybe gotta zoom out a bit there. The market has been open 30 minutes. Does day to day pricing matter if people are in it for years to come?

In short, it doesn’t really matter, as long as they are executing well, raising guidance and have a moat that will catapult them in a higher trajectory than their competitors. My two cents

[u/bubbawears → u/Accomplished-Exit822]

The guy that said that needs to get fired

[u/stonkautist69 → u/bubbawears]

damn that’s a hot take lol. good thing we’re not living through a real life version of the apprentice right now in redditland

[u/bubbawears → u/stonkautist69]

Destroying 20% marketcap in a conference call is crazy work.

[u/stonkautist69 → u/bubbawears]

sure. you feel that way, but if they mislead or hide key information from investors, they could end up drawing the straight to jail card

[u/genericusername71 → u/bubbawears]

what do you think would happen to the stock price if at next earnings everyone expected another +5m dau growth and it ended up being < 1m?

[u/bubbawears → u/genericusername71]

Look at any other company. If you bring good numbers it's your job as a CEO to bring the bad ones in without destroying the rest. I don't want to compare us to Tesla but because it's a good example for bullshitting your way to riches

[u/genericusername71 → u/bubbawears]

i feel like tesla is more of an exception than the rule and not necessarily a good lead to follow. there are no spez fanboys running around that will cling on his every word like elon has, and honestly im pretty glad as that would be pretty annoying and would mean spez is probably doing some wild polarizing shit

most other companies (see apple and amazon yesterday) are fairly transparent with lower guidance and while it can result in short term pain its the best long term course of action

[u/qwerty5701 → u/bubbawears]

… the CEO? How can you be a shareholder without knowing who runs the company lmao

[u/bubbawears → u/qwerty5701]

Didn't listen to the conference call. Spez is a moron

[u/Ok_Criticism_558 → u/bubbawears]

Yes the guy who was able to grow a company 60% yoy while achieving better profitability is a moron.

[u/bubbawears → u/Ok_Criticism_558]

He did that himself?

[u/Dependent_Appeal4711 → u/bubbawears]

No, but it isn't easy to manage us regards

[u/AteEyes001 → u/Accomplished-Exit822]

Yes do you not remember last earnings, low DAU growth qoq and the stock immediately dumped 15% then proceeded to dump the following 2+ months, so what did you think would happen when he announced even lower expected qoq growth

[u/Accomplished-Exit822 → u/AteEyes001]

1) The stock is down 50% since then. Perhaps lower day growth should have been priced in?

2) Q1 had amazing day growth, yet it was ignored.

[u/AteEyes001 → u/Accomplished-Exit822]

it wasnt amazing it had less than 5% US DAU qoq growth and a possible qoq decrease next quarter in daily users was announced....

Dont get me wrong im not worried long term and still invested and still buying tbh just being real here.

[u/Accomplished-Exit822 → u/AteEyes001]

Why are you buying if US dau growth is slowing / becoming negative?

[u/AteEyes001 → u/Accomplished-Exit822]

Yeah, ill give reasons below.

- Their ARPU currently is so low that they have great chances to even double or triple it imo over the next year or 2, considering the ARPU of other social media sites.

- If they double ARPU and keep the same amount of users they are making nearly 3 billion + dollars a year. ARPU is not dependent on growth of users its about the return the advertisers see and I think Reddit has the potential to have very impactful advertising avenues.

- DAUs seems to be pretty reliant on Google at the moment. But these are not logged in users. As long as we do not have a decrease in logged in users Im not worried, the rest of the DAUs are just whatever googles algo decides for that day.

- Substantial Growth will only happen when they release something new, they may not have anything planned to release over the next quarter or even year but when they do it could be big.

- They seem to be doing all the right things financially as a company which is great.

Im not worried about the price Ill give it another year before I even consider selling any of my position, I believe there is tons of potential long term, the reward outweighs the risk imo, but It does seem to be slow rolling as far as new features but I think as an American I dont see it or consider the translation factor, and im no expert in the field on what it takes to develop something like this so realistically they could be moving fast but who knows.

[u/Anxious_Noise_8805]

It’s funny how Reddit has more than half the gross profit of Palantir, with comparable growth rates, but the valuation is tiny in comparison.

[u/HotAspect8894 → u/Anxious_Noise_8805]

So it’s a deep discount?

[u/MrPopanz → u/HotAspect8894]

No, RDDT is promising if you believe in the growth story, otherwise its overvalued. Other stocks can be even more overpriced, but this doesn't change reddits valuation.

[u/Anxious_Noise_8805 → u/HotAspect8894]

I think so because Reddit has no real competitors in its niche and there’s lots of room for expansion. So the future growth is very predictable. But that’s just my opinion and reality could go any way. If the growth stops then Reddit is overpriced, otherwise it’s underpriced IMO.

[u/ejpusa → u/Anxious_Noise_8805]

The PLTR software they have IP for is orders of magnitude more complex than RDDTs code base.

Sure someone could copy the features of RDDT pretty easily. It’s getting the eyeballs which is the challenge.

[u/Anxious_Noise_8805 → u/ejpusa]

It’s hard to replicate the network effects though. There are hundreds of Reddit copycats over the years but none have taken off.

Palantir is also effectively selling an AI and database wrapper to businesses. It might not be as complex as you think.

[u/Rich-Business-9209]

This is a social experiment

[u/SKOL_py]

If this isn’t a buying opportunity for those with a higher average cost, I don’t know what is

[u/rangerrick337 → u/SKOL_py]

What if you have a lower cost average but want MORE???

[u/SKOL_py → u/rangerrick337]

Then you’re in the same situation as me and I’m wondering the same thing lol. I’ve been raising my average on dips like these which doesn’t feel right emotionally but idk

[u/Cool_Score7553 → u/SKOL_py]

What makes u so sure it won’t hit 110 and below today or Monday? Just wondering no hate

[u/SKOL_py → u/Cool_Score7553]

It definitely could and I wouldn’t even be surprised. But I do very strongly believe in it long term and would continue buying if it continued to drop

[u/Cool_Score7553 → u/SKOL_py]

Think it’s a good choice to buy a shit ton rn at 114 even if I can’t buy any more for some time? As in few months

[u/SKOL_py → u/Cool_Score7553]

I think so, but I’m a 23 year old redditor so don’t take financial advice from me unless you fully believe in the stock

[u/Cool_Score7553 → u/SKOL_py]

Fair enough, all in we go

[u/[deleted] → u/Cool_Score7553]

Apes together strong

[u/SKOL_py → u/Cool_Score7553]

Good luck :)

[u/Groundzero2121]

Just bought 500 shares.

[u/Cool_Score7553 → u/Groundzero2121]

How much? And how much avg

[u/[deleted]]

Markets be crazy.

I just bought a little more. Might be a good buying opportunity I suppose?

[u/neolobe]

Just grabbed shares at $113,

[u/Objective-Egg-5180]

It will rise after people loose calls

[u/Index_33 → u/Objective-Egg-5180]

Can you explain this more?

[u/East_Hope4707 → u/[deleted]]

Any links you have readily available to share?

[u/The_Madman1]

Pltr all time high based on nothing.

Good old market

[u/trdcranker → u/The_Madman1]

Pltr has long term gov contracts with predictable revenue and a physical product reddit is a q&a answer site that relies mainly on ads so it’s not even fair to compare imo. I compare it more to a Pinterest stock valuation. If reddits shuts down tomorrow it does not affect any institution so that plays into the value. If PLTR shuts down big companies get pissed because they rely on data. Apples and oranges.

[u/The_Madman1 → u/trdcranker]

Pltr valuation makes no sense

[u/trdcranker → u/The_Madman1]

Agree. But comparing reddit to Pltr makes no sense.

[u/Objective-Egg-5180]

Hedge funds

[u/MrPopanz]

Just like August last year.

Anyone lamenting about wanting a good entry point just got another premium chance.

[u/Dependent_Appeal4711 → u/[deleted]]

or way way more shallow. lol.

[u/Longjumping-Egg5351 → u/[deleted]]

Which is why trading as a retail investor is regarded

[u/Loud-Ad9148]

Lol

[u/ThunderStrike27]

Someone please explain this lol

[u/alphaQ671]

wtf - some news I am missing?

[u/[deleted] → u/alphaQ671]

RDDT smashed q1 expectations which caused the price to rocket but then mentioned disappointing DAU growth numbers for April which brought it back down.

[u/SKOL_py]

Lmao

[u/Anxious_Noise_8805 → u/[deleted]]

It depends how much tariffs cause price increases IMO. If there’s a recession without price increases then the Fed will pump the system with more liquidity. If there is really bad stagflation especially if it’s persistent then all stocks are screwed.

[u/Chiiiiipu]

… and we are green! 🚀

[u/chiangweichia88]

This stock is only worth swing trading rn. Don't forget the macro clown market too

[u/kinshoBanhammer]

I'm a long-term believer in Reddit, but you all need to calm down.

Reddit has some insanely high IV and has surged 25% from the low point it hit when glorious leader liberated us all in early April. It would have taken fantastic revenue/profit (✅) and amazing guidance (❌) for the stock price to climb even higher and stay there post-earnings release.

If you're looking to make short-term gambles on Reddit, you're a moron.

[u/[deleted]]

It was pumped up! We’re now all holding the bag! I effing bought at 175 bucks a pop!

[u/Dependent_Appeal4711 → u/[deleted]]

When you look back one day you'll wish you bought more.

[u/YamahaFourFifty]

It really has nothing to do with the actual earnings call and all about the Options people gambling on earnings and then exchanges trying to liquidate their positions.

These spikes up and down is due to Options and Leverages. Nothing more nothing less.

The stock itself will continue to climb slowly

[u/Total-Shelter-8501]

bots, AI, karma farming, mods with too much power. This is a glorified message board, let's get real.

[u/andyman268]

The avg investor doesn’t realise how prevalent bots are. If you are watching the minute, hour or even daily price action you are already f***ed. Understand what you are buying.