Reddit (RDDT) Q4 FY25 earnings call: guidance and Q&A

What are the early benefits of revamped onboarding and integrating Reddit Answers into search, particularly for retention and user experience?

Steve Huffman stated that onboarding experiments showed streamlining improves retention, with future ML investments for better cold-start feeds. Search integration led to increased search volume (80M WAU) and Reddit Answers queries (15M), with plans for more media-rich responses.

“Reddit Answers queries, I believe, were up from 1 million to 8 million -- 15 million, excuse me. Thank you, Jesse. 1 million to 15 million queries over the last year and then 60 million to 80 million overall search queries. So we're seeing nice growth there.”

asked by Ronald Josey · answered by Steven Huffman

How does Reddit view AI-generated content on the platform, and how is the company positioned for agentic commerce?

Steve Huffman stated that AI-generated content needs transparency and labeling, with automated uses ideally part of a developer program, as Reddit is for human-to-human interaction. Jen Wong added that Reddit is well-positioned for agentic commerce due to its trusted recommendations for human decision-making, which marketers will always value.

“At the end of the day, Reddit is for humans to talk to other humans. And so to the extent that there's anything automated or generated, that needs to be very well labeled.”

asked by Benjamin Black · answered by Steven Huffman

Does removing the logged-in/logged-out reporting distinction imply monetization parity, and what are the mechanisms to achieve this?

Jen Wong clarified that both logged-in and logged-out users see ads, with impression value being the same. The focus is on increasing engagement for all users through personalization, which will lead to more impressions and value, blurring the distinction between logged-in/out states.

“The real differential is around engagement. So our strategy is to increase engagement, right? So what we want is the weekly users that we have to become daily users.”

asked by Thomas Champion · answered by Jennifer Wong

How are Google and OpenAI using Reddit data, and what is the expected user/revenue impact of bot verification?

Steve Huffman noted the growing importance of Reddit data for AI models, with relationships evolving into product partnerships to drive users into Reddit's communities. On bots, he stated no user impact, as bots are removed before sharing data, and the focus is on labeling agentic usage within a developer program.

“Reddit Profound is the #1 cited source in AI answers. Our relationships with both companies are very healthy. The conversation is shifting from a purely business deal to more of a product partnership.”

asked by Justin Post · answered by Steven Huffman

How has user engagement with Reddit Answers and Search impacted monetization, and what is driving pricing growth?

Jen Wong stated that search services are not currently monetized but represent a future opportunity, incremental to existing engagement. She explained that pricing growth is driven by increasing the value of impressions through better marketing outcomes (clicks, conversions), leading to higher demand and ROAS for advertisers.

“What's driving pricing is our strategy, right? So our strategy is to make every impression more valuable by delivering more hard marketing outcomes per impression to our advertisers, increasing the click-through rate and response rate...”

asked by John Colantuoni · answered by Jennifer Wong

How will Reddit improve the visual focus on search from the homepage, and what is the ideal way to drive users from LLM citations deeper into Reddit's conversational content?

Steve Huffman mentioned testing different search UI variants, including a larger search bar. For LLMs, he desires a system where external platforms recommend Reddit communities for deeper engagement, acknowledging the rapid evolution of these products and ongoing collaboration.

“I'd like to make that user aware, hey, you can go to the audio file community and talk to other speaker geeks. I think that's the sort of thing that really differentiates Reddit and would be additive to that user's experience.”

asked by Richard Greenfield · answered by Steven Huffman

How is Reddit managing its sales force hiring and training to keep up with advertiser demand, and how long will it take to catch up?

Jen Wong explained continuous investment in the sales force and productivity tools, making investments when ROI is high. Drew Vollero added that the high margin profile makes these investments easy, yielding 3-6x returns within a year, with strong cross-functional collaboration.

“I mean, the ROI is so high that we'll invest behind new verticals, new geographies, expanding channels. So something that we do, frankly, all the time.”

asked by Jason Helfstein · answered by Jennifer Wong

Does Reddit's role as an LLM data source create a pathway for more brands to advertise, and how can Reddit shift the perception of being a niche platform?

Steve Huffman noted brands are increasingly reorganizing social media teams for Reddit, realizing its importance for LLM visibility and organic engagement, which Reddit supports with 'Pro' tools. Jen Wong added that marketers understand Reddit's value for recommendations and that constant education is needed to highlight Reddit's scale beyond its niche communities.

“Multiple brands told me we're reorganizing our social media team to be the Reddit team. So they're really starting to appreciate the differences with Reddit and the opportunity that it brings.”

asked by Colin Sebastian · answered by Steven Huffman