Thanks, Krista. Hi, everyone. Welcome to Reddit, Inc.'s fourth quarter and full year 2025 earnings call. Joining me are Steven Huffman, Reddit, Inc.'s Co-Founder and CEO, Jennifer Wong, Reddit, Inc.'s COO, and Andrew Vollero, Reddit, Inc.'s CFO. I'd like to remind you that our remarks today will include forward-looking statements, and actual results may vary. Information concerning risks and other factors that could cause these results to vary is included in our SEC filings.

These forward-looking statements represent our outlook only as of the date of this call, and we undertake no obligation to update any forward-looking statements. During this call, we will discuss both GAAP and non-GAAP financials. Reconciliation of GAAP to non-GAAP financials can be found in our letter to shareholders. Our fourth quarter letter to shareholders and earnings press release are available on our Investor Relations website Investor Relations subreddit. And now I'll turn the call over to Steven Huffman.

Thanks, Jesse. Hi, everyone, and thanks for joining our Q4 earnings call. 2025 was a breakout year for Reddit, Inc. We surpassed both targets, built real momentum across our business, and improved our unique community model at scale. We crossed $2.2 billion in revenue, up 69% year over year, and delivered $530 million in net income. In Q4 alone, we welcomed over 121 million daily active users to our platform, up 19% year over year, and over 471 million weekly active users, up 24%.

None of this would be possible without our team. Thank you to our employees for a phenomenal year. The momentum we're seeing across the business, especially in all three sections of our ad funnel, is the result of years of foundational work coming to life. I know we are all eager to build on this success. The numbers tell just a small part of an important story. Reddit, Inc. is at the center of a once-in-a-generation shift.

And it's not a coincidence. We're now operating in a fundamentally different Internet. One shaped by opaque algorithms, generative content, and growing distrust. And yet, amid this shift, more people are turning to Reddit, Inc. Not just to aimlessly scroll, but to connect, learn, and research. That's because Reddit, Inc. is the most human place on the Internet. In a world flooded with AI swap, people are seeking real community, lived experience, and trusted opinions.

That's Reddit, Inc.'s differentiator. To put it simply, more people than ever are coming to Reddit, Inc. because Reddit, Inc. is for everyone. One of the main reasons Reddit, Inc. is the go-to place for community is the candor of our conversations. This authenticity is rare. And it's what makes conversations on Reddit, Inc. uniquely helpful and influential. But in the age of AI, you can't easily distinguish a real person's thoughts or recommendations from a bot that trust erodes.

That's why we're actively working on ways to preserve our authenticity and conversation quality. Then we'll quickly move to bot verification and labeling next. This begins the launch of verified profiles for brands and individuals in Q4. We're making good progress here, and we're excited to share more updates in the coming weeks. Our consumer product work remains a top priority. Particularly driving user growth, retention, and deeper engagement through more seamless experiences.

Two areas of especially high priority are improving new user onboarding and integrating our search interfaces. Let's dig into how these are going. On the onboarding side, we deployed numerous experiments in Q4. We're actively iterating on these learnings and working fast to improve retention for new and casual users. That retention supports growth, engagement, monetization, and more effective marketing. Next, search.

In Q4, we made significant progress in unifying our core search with Reddit Answers, our AI-powered search feature. Together, they drive more search volume and queries per user with over 80 million people searching directly on Reddit, Inc. every week in Q4, up from 60 million just a year ago. We released Reddit Answers in five new languages with more on the way, and are piloting dynamic agentic search results that include media beyond text.

Reddit, Inc. is already where people go to find things. Making our platform an end-to-end search destination is how we meet that demand. As the industry evolves, how we think about our product and users must evolve too. We've historically reported logged-in versus logged-out users, as some of our work to streamline onboarding, instant personalization, for example, blurs the line between these states, the distinction between them makes less sense.

As such, we plan to phase out reporting on logged-in and logged-out later this year. In 2026, we're focused on making Reddit, Inc. faster, more relevant, and more accessible to everyone, everywhere. A big part of this effort is improving feed relevancy. Using AI and machine learning to make Reddit, Inc. feel more personalized and useful from the second you open the app. These are high-impact investments that help shape how new users experience Reddit, Inc. and how often they return.

I'm encouraged by the team's focus and velocity, I'm confident we'll feel the impact of the work this year. To rise to this occasion, leveling up our execution, and that starts with leadership. I'm thrilled to welcome Maria Angella Dew Smith as our new chief product officer. She brings a solid track record in scaling product organizations, and is already helping us move faster and focus on the highest impact areas for users and growth.

I have full confidence that Maria will be a great partner to the business and significantly up-level our pace and quality of results. We're seeing strong commercial momentum right now and are confident in where we're headed. We have a special business model that is generating a lot of cash. Which is why we're excited to announce a $1 billion share repurchase program today. It's a testament to our growth and our commitment to delivering for our shareholders as we continue to invest in the business.

Our work ahead is ambitious, and that's by design. We have the right team, the right road map, and the right moment. Now it's about execution. As always, thank you to our employees, communities, partners, and investors for being a part of this journey. With that, I'll pass it to Jennifer Wong to share more about the business.

Thank you, Jen, and good afternoon, everyone. Q4 was a solid finish to a standout year for Reddit, Inc. Both the strength and the consistency of our results continue to shine. These strong results included, first, total Q4 revenues grew 70% year over year. That's a particularly solid result given the tougher comp of 71% in 2024. Second, profitability hit a new high. Net income reaching $252 million, 35% of revenue. And adjusted EBITDA hit $327 million, 45% of revenue, making us a rule of 115 company this quarter, also a high.

Diluted EPS reached $1.24, up more than 3x 2024. And third, for the first time, cash flow crossed $2.5 billion in a quarter, reaching $264 million in Q4. Free cash flow was 36% of revenue this quarter. The consistency of the results is also worthy of review. First, Q4 was Reddit, Inc.'s sixth consecutive quarter of over 60% revenue growth. Next, it was also Reddit, Inc.'s sixth consecutive quarter of 90% gross margins.

Third, stock-based compensation expense was below 20% of revenue the third consecutive quarter. Hitting 13% in Q4. It was nice to see negative dilution for the year, with total shares outstanding falling slightly to 206.1 million, well below our medium-term dilution guide of 1% to 3%. These strong and consistent results enabled our business to scale successfully in 2025. On a full-year basis, 2025 revenues were $2.2 billion, up 69% and gross margins were 91.2%, up 70 basis points.

Total adjusted costs grew 35% for the year, about half the rate of revenue growth. Full-year net income was $530 million, 24% of revenue, and adjusted EBITDA was $545 million at 38% margin. Reddit, Inc.'s incremental adjusted EBITDA margins for the year were 60%. Full-year free cash flow was $684 million, more than triple 2024. Diluted earnings per share reached $2.62, up from a loss last year. Now provide more color on our Q4 results.

Q4 revenues of $726 million grew 70% year over year driven by a ramp in ad revenue, which grew 75% in Q4 to $690 million. As we saw broad-based strength across all three sections of the ad funnel. Other revenue, which includes revenue from our content licensing business, reached $36 million, up 8%. U.S. revenues were up 68%. International revenues were up 78%. Average revenue per user or ARPU grew 42% year over year.

To $5.98. Moving to expenses. Our Q4 total adjusted costs, which included both our adjusted cost of revenue and adjusted OpEx, were $399 million in Q4, up 46% year over year. The expense growth rate was slightly elevated from the prior two quarters, which had averaged about 38% and the full year where costs were up 35%. Building on that thought, the main cost driver continues to be operating expenses, which on an adjusted basis were $340 million in Q4, about 85% of total adjusted expenses.

Adjusted OpEx costs grew 41%, driven by investments in two areas: hiring and marketing. On hiring, our pace was similar to prior quarters. The company ended with 2,555 total headcount. Up 14% versus last year and up about 3% sequentially from Q3, the same pace as the prior quarters. In Q4, we added slightly less than 70 net people. With hires continuing to be focused in revenue-generating functions. Our ROI from sales and ad tech investments remains strong, multiples of the cost.

G and A headcount was lower than last year and about the same as year-end 2023 as we continue to leverage back-of-house resources. And secondly, on marketing, we invested more this quarter. The spend was in the mid-single digits as a percentage of Q4 revenues. We target our spend in two areas. User marketing and brand marketing. To drive traffic and awareness. On user marketing, spend levels were sequentially higher than in Q3, driven by increases in volume and price.

Price increases were driven by both seasonality as media costs rose in Q4 versus Q3, and geography, as most of the spends were targeted in the U.S. Market. On the brand side, we launched new audience campaigns focused in areas like parenting, entertainment, and sports, which had some encouraging results, but there's more to do. So rounding out Q4 with a few more numbers, Reddit, Inc. remains capital light. Continue to benefit from AI in many ways without the AI costs.

CapEx was $3 million. We ended the year with a strong cash and liquidity position, Cash and cash equivalents on the balance sheet ended at nearly $2.5 billion, up $250 million sequentially and over $630 million from last year. So that covers Q4 and the full-year results. Let me speak to a couple of additional items. First, earlier today, we announced that our board of directors authorized a share repurchase program of up to a billion dollars with no set expiration date.

For many leading companies, strategic capital deployment has been an important driver of their total shareholder returns, And specifically, repurchasing shares could be an attractive incremental tool to drive TSR, the medium and long term. For Reddit, Inc., we're proving our ability to grow durably at scale with our inflecting profitability underscoring the attractive incremental margins inherent in our business. As we think about our three capital allocation priorities, we will continue to prioritize investing in our core business first.

Next, we'll look to do M and A where it makes sense, both tuck-ins and more scaled opportunities. Looking to buy capabilities, technologies, and companies. And third, when it makes sense, we'll repurchase shares. Our differentiated financial profile gives us the opportunity to invest in all three priorities. We plan to be in the market from time to time to buy shares opportunistically, We'll continue to be prudent about the financial management targeting to keep over a billion dollars of cash in the balance sheet consistent with our capital framework.

So switching gears to the second item, I'll now share an update on our user reporting. Big picture, we want to make sure the metrics we share align with how we're managing the business. As you heard from Steve, product strategy is evolving. We're focusing on making it easier for all users to engage with content on the platform and find immediate value regardless of whether users logged in or logged out. Our goal is to grow all users.

As a result, the distinction of whether a user is logged in or logged out has become less of a management focus and less important to how we think about and manage the business. As a result, we were updating our disclosures starting in 2026. To better reflect the metrics we use to run the business and evaluate our operating performance as we scale. Specifically, starting with Q3 2026 disclosures, we'll continue to report The US and international DAUQ and WAUQ numbers as we've done historically.

But we will no longer report logged in and logged out metrics. Between now and Q3, we will continue to report logged in and logged out metrics for the 2026. Turning now to the outlook. We'll share our internal thoughts on revenue and adjusted EBITDA for the 2026. As well as some additional thoughts on stock-based compensation. In the 2026, we estimate revenue in the range of $595 million to $605 million representing 52% to 54% year over year revenue growth with a midpoint of about 53%.

Adjusted EBITDA in the range of $110 million to $220 million representing approximately 82% to 91% year over year growth and an adjusted EBITDA margin of 36% at the midpoint. The Q1 guide implies a total adjusted cost base of $385 million which would be down sequentially to Q4 expenses. I'll also share a thought on the full-year stock-based compensation expenses SBC was $387 million or about 18% of revenue in 2025. Similarly, in 2026, we're aiming for stock-based compensation to be in the high teens as a percentage of revenue.

Similar to our historic revenue trends, expect nominal SPC expenses to increase each quarter. We'll target dilution at the lower end of our medium-term guide of 1% to 3%. So overall, it was a strong finish to a solid 2025 for the company, and our attention now turns to 2026 as we continue to focus on converting our leading revenue growth and high margins into meaningful cash flow and returns for our shareholders. That concludes my comment. Let me turn the call back over to Steven Huffman.

Okay. Thanks, Drew. Normally, we will take a couple of questions from the community. First, I want to acknowledge the R Reddit stock community and their earnings call bingo card. I just want to confirm, I will refer to everything bad as an opportunity that's what they are. And Drew will use the word corpus many times. Thank you all. Love you. Okay. Question from the community. Why do a buyback instead of putting that money towards future growth, product initiatives instead?

Yep. Take that one, Steve. I think the short answer is we can do all of our three capital priorities. That's the idea. The strategy here is really to return capital to our shareholders, and that's the right strategic decision for the company. I think if you look at your great companies, your leading creators of total shareholder returns, It's obviously the revenue growth and the margin expansion that drives the bulk of it.

But the good companies that are the leaders in TSR for their shareholders also have capital allocation strategies. And so this is a strategic move being made by the company to return capital to shareholders. Our priorities haven't changed, Steve. We've got three priorities here. First and foremost, it's investing in the business. Second, it's M and A. Third is share repurchase where it makes sense. I think by the numbers, now have $2.5 billion on the balance sheet in cash or very close to it.

We want to keep a working capital on the balance sheet as it were of about a billion dollars in cash. So you now have an ability to do all three priorities, which we haven't had before. Obviously, the business last quarter had a terrific quarter. Cash flow was $264 million. What you're seeing is the model is starting to inflect, and you're seeing the model really shine. You know, CapEx for the full year for this company is under $10 million.

So you're really seeing the model start to throw off cash. And so I think that just gives us the ability to execute on all three dimensions. First priority, investing in the business. Second priority, doing M and A where it makes sense. And then third, share repurchases will be opportunistically in the market from time to time when it makes sense. Great. Thanks, Drew. Thanks, Steve, Jen. Krista, let's please open up the line for questions from the folks there. Thank you.

Okay. Thanks, Ron. Because Consumer products. So let's start with onboarding. We ship a bunch of stuff in Q4. Some worked. Some did not. Lots of learnings across the board. I'd say that the core thesis remains the same. Streamlining that process does improve retention. Think we've got some interesting things about using LLMs to how to help triangulate users' interest. I think one of the other learnings also, I think it's pretty straightforward.

Bringing users into the feed faster requires the feed to be better. And so we'll be making pretty good investment into ML to improve that kind of cold start feed for new users. So I think lots of lots of opportunity there and more to come. And then on search, we did bring the search bars together for the most part. So you're on search bar. You can go into ask. And then if you run a traditional search, we'll often pop an answer there.

Red answers queries, I believe we're up from 1 million to 15 million queries over the last year. And then 60 to 80 million overall search queries. So we're seeing nice growth there. Then as I mentioned in my remarks, we're gonna continue to invest in Answers. And you know, I think where this is going is we'll just handle more and more queries with answers. Because it lets us respond in a more flexible way to the kind of wide range of things that users ask. Okay. And then, Jen, the question to you was on RedMax.

Thanks, Benjamin. Okay. So first question. AI-generated content, how do we think about it? Could it be additive? Well, look, Depending on how you look at it, right, machine translation is AI-generated content. So there's certainly a role for using like, AI to communicate better. Right? We do that. Our users do that. I think there's also a version of this where know, there's a you know, we see more and more of this, I think, just on the Internet, where people write with AI.

And I think we're going through this transition right now. It's my opinion. It's kind of annoying. But there's still a human behind the prompt. And then there's, like, full, like, bot-like behavior. The latter, don't want on Reddit, Inc. And to the extent that is automated uses of Reddit, Inc., we want those basically to be part of our developer program apps. And so we do see things like this on Reddit, Inc., like the remind me bot and the haiku bot and things like that.

So think the answer to questions like these for Reddit, Inc. is almost always in transparency and intentionality. At the end of the day, Reddit, Inc. is for humans to talk to other humans. So to the extent that there's anything know, automated or generated, that needs to be very well labeled. It doesn't mean we have to outlaw entirely. Just needs to be you know, marked as what it is because there are times when it's helpful. Okay. Jen, the question to you is Agentic Commerce and how we think about that.

K. So on thanks, Justin. So on the AI deals, really, our partnerships with Google and OpenAI I think we can see the growing importance of Reddit, Inc. Reddit, Inc. per profound is the number one cited source in AI answers. Our relationships with both companies are very healthy. The conversation is shifting from know, a purely business deal to you know, more of a product partnership. And so you know, I think the exchange will be we help you build the best version of your products.

You help us build the best version of our products. Specifically, what we're looking for in any relationship like this is can we bring users into the community parts of Red? Right? Red is product. Is human connection, is conversation, is communities. And we want to bring users into that experience on Reddit, Inc. That, of course, generates more conversation, and makes that whole kind of partnership flywheel work better.

So that's where our head's at right now. But both relationships are great. On things like bots, no user impact. We remove and have the lifetime of this company. Know, anything that we believe is a bot, we remove from our users. Before we share anything. But we do see more and more agentic usage of Reddit, Inc. specifically somebody might be writing a comment with ChatGPT and that sort of thing. There is a culture of labeled bots on Reddit, Inc. already.

So this is what I mentioned before, the remind me bot, the HaiQ bot, some things like that. And I think with the Reddit, Inc. developer program, there's more opportunities to expand the functionality of Reddit, Inc. But that means that those sorts of interactions need to be well labeled. But the default assumption on Reddit, Inc. has been and should be you're talking to humans because that's what Reddit, Inc. is for is people talking to people.

The AI version of this challenge is just a new chapter in this challenge. We've seen this sort of challenge. Right? It's just spam in general, really, is what we're talking about. The spam challenge has been something we've been fighting for two decades on Reddit, Inc. So this is really an evolution of that challenge, which we'll continue to stay vigilant on.

Okay, Rich. Thanks. On the search bar, you are in one of the variants. There's another variant, the one that I happen to be in. Has a big fat search bar at the top. So you can go on the natural journey or if you want to follow-up after a can put you in the big search bar there. Anyway, we're testing lots of things there. I like the bigger one. On Google and OpenAI, how we feel about the citations, look, I think there's a lot of movement there.

You know, if I could wave a magic wand, I think what we really want is to you know, say I go to some other platform I say, what's the best speaker? Reddit, Inc. helps you you know, get a few options for what the best speaker is. I'd like to make that user aware, hey. You can go to the R audio file community and talk to other speaker geek. I think that's the sort of thing that really differentiates Reddit, Inc. and would be additive to, you know, that user's experience.

But there's so much movement in both of these products. On the other part of my brain, I just have some empathy for product people who are moving really, really fast. So we're in close connection with them. Relationships are healthy. Obviously, there's a lot of movement there, and I expect there will continue to do continue to be. But, you know, we'll continue, I think, to evolve together through this. Thanks.

I don't if you had anything to No. I I think that's right. I think there's a really good partnership, and I I think you're talking about you know, are we chasing demand? I mean, at times, but it's really about the enabler. Like like, we really gotta work cross functionally, but but Jen and I are looking at it We're meeting multiple times a month on this very topic. And when we see an opportunity, mean, it really behooves us to to go and make investments, with the margin profile that we have here.

It it's really easy to make this invest these investments. It's getting, you know, three to six times our our return out in that in one calendar year. Like, you can really and I love the fact that it's, you know, immediate returns and and easy to track. You know, you added this account or you you can see the sales in this geography or vertical. So, anyway, we're we're really pleased with it. It's really the enablers and and sometimes the enablers in our control, and sometimes we're waiting for customers on some of the enablers.

Josh, hey. On the guide, let me give you a a couple of kind of pieces of information. Let me specifically address your question. Like, what's different? Is there anything different in first quarter? I think the guides that we gave for this quarter, of 52% to 54%, very similar to the last couple of quarters. We've been in kind of a low to mid 50 range in Q3 and Q4. So very similar, you know, kind of profile on the guides.

I think the double click on the quarter itself is we were pretty strong from start to finish in in Q4. Like, we we had a good October. Had a good November. We had a good December. Like, it was it was a good quarter for us. So so we end with with momentum in the business. Think in the margin, you know, we're still on the on the forecasting side, we still ran around quarter with work to do. We still have, you know, 40 to 50% of our orders to write in quarter.

I think, specifically your question, in the first quarter, your business comes a little bit later. March tends to be your biggest month. And so you you you gotta you gotta make March happen. And that, for us, in a lot of cases, can happen intra quarter. That's really the only dynamic on the margin. But overall, very similar guide to the last couple of quarters. And there was momentum as we were leaving the fourth quarter kind of toward the holiday season. Does that make sense?

Sure. Sure. Let me let me take that. On the on the ROI side, I mean, pretty consistent with how others are are modeling it. We're looking at the costs for particular advertising, and then we're looking at the users that bringing in, and then we're looking at a retention curve. Pretty similar to, I think, how other companies look at it. I think the longevity of our model tends to be a little kinder than most because of the high gross margins that that that a user can bring here at Reddit, Inc.

But overall, you know, pretty linear model, really valuing on sort of the income statement basis, what's the value that it creates. And and a pretty straightforward ROI payback in, you know, a relatively short period of time. So not a whole lot different than than most of the other models that you may see in the business. I think we do have a little bit of an advantage because of the high gross margin. So the revenues that we are able to bring in with the user do give us a little bit better ability to to pay back.

Okay. On the second one, on the M and A side, look. I'm trying to say there is we continue to look at a lot of opportunities. I probably wouldn't overthink scaled opportunities. I would just at it as sort of a spectrum of opportunities. We're looking at capabilities. We're looking at companies. Looking at technologies. Think, you know, we've we've been successful here tucking in a number of technologies. It's actually relates to Jason's question a couple of minutes ago.

It's really been one of the secrets of our success on the revenue side. The ad tech team has done an outstanding job in how they've been able to really kinda drive our business. One of the ways is they tech in technologies rather than build it themselves. Saves us six months to market, saves us twelve months to market, and you have a proven product. So we we have been able to kinda tuck things in successfully, particularly on the ad tech side.

It's really helped us in the monetization journey. I would say that's really been the primary focus of where we are today. But we're not ruling anything off the table. That's why I mentioned the scale and the setup.

Okay. And for search, you know, we spent most of last year talking about how do we unify these two search experiences. The traditional search on Reddit, Inc. and then the Gen AI search. I think the main thing that we've learned is that the Gen AI search results, I think, will just be better for most queries. There's a type of query there I think, particularly good at. I would argue, the best on the Internet, which is questions that have no answers.

Where the answer actually is multiple perspectives from lots of people. Right? What should I watch? Where should I go? What's the best x y z? I think Reddit, Inc. is really great at this. When we thought about traditional search, it's more like navigation. Right? Take me to this topic, to this subreddit. But we're actually finding that the LLM search results is, in many cases, better for this as well. That's the direction we're going.

Right? Search WAU in the last year is up 30% from 60 million to 80 million. The Answers WAU, so the LLM search, went from 1 million in Q1, 7 million last quarter, 15 million this quarter. So we're seeing a lot of growth there. And I think there's a lot of potential. The other thing I mentioned in my script is with the LLM answers mostly in text now, we'll start making those responses more media rich as well. So one of the primary use case I think there's three use cases that people come to Reddit, Inc. for.

One of the primary ones is searching. But the other is being for the feed or for the community experience. But search is a big one, we see a ton of opportunity there.

Thanks, Colin. Jen and I are gonna try to take the we'll tag team this first one together. So it's it's really interesting when when I talk to customers so brands, increasingly, we've seen this steady increase over the years of first, what is Reddit, Inc.? Okay. What is community? Okay. I get it. How do I show up well? To now, they're like, I have to be on Reddit, Inc., and I have to show up in the right way. And I want a way to do this, not just as a paid customer but organically.

I want to provide great customer service. I want to get my content there. Because increasingly, they realize that the best way to do well in external search to show up in LLMs is to show up well on Reddit, Inc. So we're actually starting to see a shift in their thinking. Multiple brands told me we're reorganizing our social media team to be the Reddit, Inc. team. So they're really starting to appreciate the differences with Reddit, Inc.

And the opportunity that it brings. And, of course, I think if they can have great organic experiences, which we're trying to help them with, this is our Reddit Pro line of work. So the profiles the official accounts, the labeled accounts, even some of that app and bot labeling that I was talking about before are all ways to allow brands to show up as first-class citizens, well-labeled and intentional. And of course, this we believe, will open the gateway for the customer relationship as well.

Great. And, Krista, I think we'll end the call there. Just want to thank everyone for joining, and look forward to speaking again soon. Thanks, all. Bye bye.