As seen below, most of the growth was again ARPU driven, as user growth was again lackluster (much more on this later). Encouragingly, this is not solely coming from higher ad load, which has a finite ceiling and a direct trade-off with consumer experience quality. Ad pricing growth was also very strong, as RDDT gets better at offering buyers the right product with the right targeting at the right time. It’s hard to do at massive scale in real time as users interact, but Reddit is now moving from novice to experienced veteran in this regard.

One more quick note. Leadership pointed to Meta ARPU being a lot higher than Reddit’s ($17.72 vs. $6.87) as evidence of the ARPU runway remaining very long. I think that's probably true in terms of a lot of runway remaining, but I don't think using Meta as the comparison is the best idea. Meta is a generational, once-in-a-lifetime company that has built a network effect and consumer habit that everyone in its space is envious of. They also have several massive apps that contribute to revenue per person. Not just one. This is not the company to compare financial trends to when deciding where they can go from here.

RDDT trades for 10x forward EPS. EPS is expected to grow by 70% this year, 26% next year and 22% the year after that. It looks very cheap, but I also think there’s real risk to forward estimates if they can’t fix the stubborn user growth issue that has now plagued them for a few quarters.