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Social media company Reddit filed its IPO prospectus with the Securities and Exchange Commission on Thursday after a yearslong run-up. The company plans to trade on the New York Stock Exchange under the ticker symbol “RDDT.”
Reddit said it had $804 million in annual sales for 2023, up 20% from the $666.7 million it brought in the previous year, according to the filing. The social networking company’s core business is reliant on online advertising sales stemming from its website and mobile app.
The company said it has incurred net losses since its inception. It reported a net loss of $90.8 million for the year ended Dec. 31, 2023, compared to a net loss of $158.6 million the year prior.
As of the fourth quarter of 2023, Reddit said that its U.S. average revenue per user, or ARPU, was $5.51, which was down from $5.92 from the previous year. The company’s ARPU was $3.42, which was a 2% year-over-year decline from $3.49.
Reddit said it has over 100,000 communities, 73 million average daily active uniques (DAUq) and 267 million average weekly active uniques.
In a section about the company’s risks, Reddit explained how its daily active unique figures “may fluctuate or decrease in one or more markets from time to time due to various factors.”
“For example, although we saw increased growth in our user base during the COVID-19 pandemic, we experienced lower levels of DAUq growth and declining DAUq as the effects of the COVID-19 pandemic subsided,” the filing said. “DAUq has also declined in the past in periods following usage peaks surrounding certain worldwide events, such as the onset of the conflict between Russia and Ukraine in the three months ended March 31, 2022, and cultural trends, including video game releases, such as Elden Ring in the three months ended March 31, 2022, and traffic related to r/wallstreetbets in the three months ended March 31, 2021.”
Its market debut, expected in March, will mark the first major tech initial public offering of the year. It’s the first social media IPO since Pinterest went public in 2019.
Reddit first filed a confidential draft of its public offering prospectus with the Securities and Exchange Commission in December 2021.
The social media company, founded in 2005 by technology entrepreneurs Alexis Ohanian and Steve Huffman, has raised about $1.3 billion in funding and has a post valuation of $10 billion, according to deal-tracking service PitchBook.
Publishing giant Condé Nast bought Reddit in 2006 and then spun it out as an independent company in 2011.
Reddit is one of the most-visited websites in the U.S., according to analytics firm Semrush, but it has struggled to build an online advertising business comparable to tech giants like Facebook-parent Meta and Google-parent Alphabet.
It’s also faced challenges with developers and moderators.
In June, several prominent Reddit moderators locked subreddits as part of a blackout to protest the company’s decision to increase the price third-party developers pay to use its application programming interface, or API. At the time, Reddit said the pricing change was necessary because many big tech companies were using data to train large language models.
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