Reddit Begins Trading On New York Stock Exchange

Reddit CEO Steve Huffman (Spencer Platt/Getty Images)

/todayIlearned

Reddit’s slowing user growth tests Wall Street’s sky-high expectations

The social media platform pointed a finger in Google’s direction for its underwhelming eyeballs.

2/12/25 5:49PM

Reddit’s tenure as an IPO and social media darling received a startling downvote on Wednesday after the site reported disappointing user growth last quarter, sending shares on a 16% downward spiral in after-hours trading.

The site’s daily active users, a key growth metric for the company, rose 39% to 101.7 million in the fourth quarter, missing Wall Street estimates of 103.8 million. Reddit pointed to a change in Google’s search algorithm during the quarter, which made for “some volatility” that has since subsided, the company said.

Reddit had previously benefited from deals with Alphabet’s Google and OpenAI that put its pages higher in search and ChatGPT results, bringing in new users. The tough part, though, has been getting those logged-out users — who typically spend less time on the site, thus carrying less ad revenue — to actually make an account. The majority of Reddit’s daily active users aren’t logged in, making up 55% of those that visited the platform daily in Q4.

The site’s slowing user growth now brings its strikingly steady rise into question. Unlike a host of other platforms that have rapidly skyrocketed in popularity only to fall just as quickly, losing users’ interest just years if not weeks later, Reddit has seen gradual growth since coming online two decades ago.

The platform beat on revenue, however, reporting quarterly sales of $427.7 million, up 71% from a year prior and above estimates of $405.5 million according to analysts polled by Bloomberg. Adjusted earnings per share of $0.85 also handedly exceeded forecasts for $0.48.

Part of that growth comes from its booming ad business, which rose 60% on the year to $394.5 million in the fourth quarter, coming in above estimates of $367.3 million. Its “other” revenue, which includes its comparatively small but growing AI licensing business, missed estimates to total $33.2 million, making up about 8% of the company’s total revenue for the quarter.

Looking forward, the company said it expects revenue to range from $360 million to $370 million for the current quarter, above analyst expectations of $359 million.

Kelly Cloonan is a journalist who has written for Business Insider and Fast Company.

Nia Warfield, Luke Kawa

S&P 500 closes at record as tech heavyweights flex (besides Apple)

The Magnificent 7 did the heavy lifting, performing better than any S&P 500 sector ETF on Tuesday.

Matt Phillips

Oracle rips as backlog builds, but company misses on top and bottom lines

Oracle shares shot higher after-hours as the company reported a growing backlog, even though its fiscal Q1 results fell slightly short of expectations. The company reported:

Adjusted earnings per share of $1.47 vs. expectations of $1.48.
Revenue of $14.93 billion vs. expectations of $15.04 billion.

Shares were up 21% in after-hours trading, which is a pretty crazy stock move for a company with a market cap of more than $675 billion.

The market was likely impressed by a giant build in the company’s “remaining performance obligations,” or RPO, which is how the company measures the value of signed cloud computing deals that haven’t yet been reported as revenue. In a statement, CEO Safra Catz said:

“We signed four multi-billion-dollar contracts with three different customers in Q1. This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter — and demand for Oracle Cloud Infrastructure continues to build. Over the next few months, we expect to sign-up several additional multi-billion-dollar customers and RPO is likely to exceed half-a-trillion dollars.”

Oracle Announces Fiscal Year 2026 First Quarter Financial Results

“We signed four multi-billion-dollar contracts with three different customers in Q1. This resulted in RPO contract backlog increasing 359% to $455 billion. It was an astonishing quarter — and demand for Oracle Cloud Infrastructure continues to build. Over the next few months, we expect to sign-up several additional multi-billion-dollar customers and RPO is likely to exceed half-a-trillion dollars.”

Matt Phillips

Robinhood rides index inclusion rally to record close

Robinhood Markets notched a new closing high Tuesday, as the crypto, stock, and options brokerage continued to ride a rally set off by the announcement that it would be added to the S&P 500 Index.

(Robinhood Markets Inc. is the parent company of Sherwood Media, an independently operated media company subject to certain legal and regulatory restrictions.)

Robinhood appears to be benefiting from the so-called inclusion effect, a market phenomenon where companies that are added to major market indexes can see a price move as index funds — whose holdings must mirror the membership of the index — rush to buy the stock.

For what it’s worth, it seems like Robinhood will upon entry (effective prior to the market open on September 22) be the top-performing member of the index, as its roughly 220% gain this year is more or less double that of the current leader, Seagate Technology Holdings.

Luke Kawa

GameStop posts impressive Q2 results with big sales beat

Don’t call it a comeback!

GameStop is jumping aftermarket as the video games and collectibles retailer posted an impressive set of second-quarter results.

Net sales: $972 million (estimate $823 million).
Adjusted diluted earnings per share: $0.25 (estimate $0.16).

Note: these consensus estimates, compiled by Bloomberg, are from only two analysts.

The sales beat is particularly noteworthy, as the company had already done an exemplary job of expense control to help protect its bottom line. Revenues were up more than 20% versus the year-ago quarter, the biggest annual jump in sales since the company (and the world) was emerging from the pandemic in 2021.

The options market implies a move of plus or minus about 9.4% on earnings.

For a while, GameStop’s ability to generate positive net income was purely a function of the interest earnings on its substantial cash hoard. But now, GameStop has strung together five consecutive quarters of positive operating cash flows for the first time in its history!

This was the quarter when the company began to act on its bitcoin treasury strategy, raising money through the sale of convertible notes and using some proceeds to purchase the crypto asset.

Because of how much market value has been ascribed to potential for GameStop CEO Ryan Cohen to use its significant cash holdings to transform the company, the prospect of converting cash into bitcoin initially did not sit too well with investors following the announcement of this new strategic push in March.

Shares of the once-upon-a-time meme stock really didn’t get too much love during retail frenzies earlier in the summer, and were down about 25% year to date heading into this release.

As of the close of the quarter, its bitcoin holdings were valued at $528.6 million.

Western Digital Seagate Technology Rise to top of S&P 500

Data storage is so hot right now

A rapid turnaround in profitability helps explain how Seagate Technology and Western Digital have clawed to the top of the S&P 500 this year.

Matt Phillips10h