Reddit reported stronger-than-expected first-quarter results on May 1, with revenue growth outpacing Wall Street estimates despite ongoing concerns about Google search algorithm changes affecting platform traffic.

The social media platform posted total revenue of $392.4 million for Q1 2025, representing a 61% year-over-year increase that surpassed analyst expectations of $370 million. Advertising revenue, which constitutes the bulk of Reddit’s business, grew at the same 61% rate to reach $358.6 million.

Reddit achieved profitability with net income of $26.2 million, or $0.13 per share, marking a dramatic improvement from its $575.1 million loss in the same period last year. Adjusted EBITDA reached $115.3 million, representing 29.4% of revenue.

“Over 400 million people now come to Reddit each week—because when you want real opinions, you turn to real people,” Steve Huffman, co-founder and CEO of Reddit, said in a news release. “20 years in, I have never been more excited about Reddit’s future than I am now.”

User Growth and Advertiser Adoption

Daily active unique visitors (DAUq) grew 31% year-over-year to 108.1 million, slightly above analyst estimates of 107.5 million. International markets showed particularly strong growth, with international DAUq increasing 41% compared to 21% in the U.S.

Chief Operating Officer Jen Wong noted that the total number of active advertisers on the platform grew more than 50% in the first quarter compared to the previous year, indicating increased adoption of Reddit’s advertising offerings.

The company has benefited from its “conversation placement ads” format, which enables brands to advertise directly within discussion threads taking place in its interest-based communities, known as subreddits.

Google Search Concerns and Forward Guidance

Despite strong results, CEO Huffman expressed caution about potential traffic disruptions stemming from Google’s search algorithm changes.

“We do expect some bumps along the way from Google, because we’ve already seen a few this year,” Huffman said during the earnings call. He added that the search ecosystem was undergoing significant changes that could prompt frequent near-term disruptions.

Reddit previously experienced volatility in traffic from Google’s search algorithm changes in the fourth quarter of 2024, which the search giant attributed to its increased focus on AI-generated summaries on its results pages.

Outlook and Brand Safety Initiatives

For the second quarter of 2025, Reddit forecasts revenue between $410 million and $430 million, exceeding the average analyst estimate of $395.5 million. The company expects an adjusted EBITDA of $110 million to $130 million, also ahead of Wall Street projections.

Earlier in 2024, Reddit announced a partnership with DoubleVerify to provide advertisers with independent verification of brand safety and suitability metrics. Initial testing showed over 99% of measured ad impressions appeared adjacent to content deemed brand safe according to DoubleVerify’s standards.

Reddit stock, which debuted in March 2024, has fallen 27% year-to-date despite the company’s strong financial performance as it competes with larger platforms like TikTok, Facebook, and Instagram for digital advertising dollars.