Item 1. Financial Statements

Reddit, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

			March 31, 2024						December 31, 2023
			(unaudited)
ASSETS
Current assets:
Cash and cash equivalents			$	968,515					$	401,176
Marketable securities			701,835						811,946
Accounts receivable, net			215,307						245,279
Prepaid expenses and other current assets			34,368						21,286
Total current assets			1,920,025						1,479,687
Property and equipment, net			14,385						14,946
Operating lease right-of-use assets, net			22,754						24,008
Intangible assets, net			29,928						32,147
Goodwill			26,299						26,299
Other noncurrent assets			2,505						19,380
Total assets			$	2,015,896					$	1,596,467
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable			$	45,378					$	46,514
Operating lease liabilities			4,383						3,707
Accrued expenses and other current liabilities			106,724						83,349
Total current liabilities			156,485						133,570
Operating lease liabilities, noncurrent			20,835						22,040
Other noncurrent liabilities			276						287
Total liabilities			177,596						155,897
Commitments and contingencies (Note 9)
Convertible preferred stock, par value $0.0001 per share; no and 86,864,781 shares authorized as of March 31, 2024 and December 31, 2023, respectively; no and 73,021,449 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively; aggregate liquidation preference of $0 and $1,847,993 as of March 31, 2024 and December 31, 2023, respectively			—						1,853,492
Stockholders’ equity (deficit):
Preferred stock, par value $0.0001 per share; 100,000,000 and no shares authorized as of March 31, 2024 and December 31, 2023, respectively; no shares issued and outstanding as of March 31, 2024 and December 31, 2023			—						—
Class A common stock, par value $0.0001 per share; 2,000,000,000 and 189,000,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 44,286,735 and 7,099,700 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively			4						—
Class B common stock, par value $0.0001 per share; 140,000,000 and 142,000,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively; 119,059,756 and 53,904,204 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively			12						6
Class C common stock, par value $0.0001 per share; 100,000,000 and no shares authorized as of March 31, 2024 and December 31, 2023, respectively; no shares issued and outstanding as of March 31, 2024 and December 31, 2023			—						—
Additional paid-in capital			3,130,384						302,820
Accumulated other comprehensive income (loss)			(472)						814
Accumulated deficit			(1,291,628)						(716,562)
Total stockholders’ equity (deficit)			1,838,300						(412,922)
Total liabilities, convertible preferred stock, and stockholders’ equity (deficit)			$	2,015,896					$	1,596,467

The accompanying notes are an integral part of these financial statements.

Reddit, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(unaudited)

			Three months ended March 31,
			2024						2023
Revenue			$	242,963					$	163,740
Costs and expenses:
Cost of revenue			27,616						26,863
Research and development			437,030						108,767
Sales and marketing			124,095						57,911
General and administrative			243,477						40,801
Total costs and expenses			832,218						234,342
Income (loss) from operations			(589,255)						(70,602)
Other income (expense), net			14,554						10,724
Income (loss) before income taxes			(574,701)						(59,878)
Income tax expense (benefit)			365						988
Net income (loss)			$	(575,066)					$	(60,866)
Net income (loss) per share attributable to Class A and Class B common stock, basic and diluted (Note 4)			$	(8.19)					$	(1.05)
Weighted-average shares of Class A and Class B common stock used to compute net income (loss) per share attributable to common stockholders, basic and diluted			70,240,492						58,114,745

The accompanying notes are an integral part of these financial statements.

Reddit, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

			Three months ended March 31,
			2024						2023
Net income (loss)			$	(575,066)					$	(60,866)
Other comprehensive income (loss), net of tax:
Unrealized holding gains (losses) on marketable securities			(1,272)						2,495
Change in foreign currency translation adjustment			(14)						—
Net comprehensive income (loss)			$	(576,352)					$	(58,371)

The accompanying notes are an integral part of these financial statements.

Reddit, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share amounts)

(unaudited)

			Total Convertible Preferred Stock															Common Stock																								Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Accumulated Deficit						Total Stockholders’ Equity (Deficit)
									Class A												Class B
			Shares						Amount									Shares						Amount						Shares						Amount
Balance as of December 31, 2022			73,021,449						$	1,853,492								6,381,936						$	—					51,410,111						$	6					$	250,460					$	(3,792)					$	(625,738)					$	(379,064)
Issuance of common stock upon exercise of stock options, net			—						—									111,488						—						23,926						—						963						—						—						963
Issuance of common stock upon settlement of restricted stock units, net			—						—									221,612						—						—						—						(4,229)						—						—						(4,229)
Stock-based compensation expense			—						—									—						—						—						—						12,480						—						—						12,480
Vesting of early exercised stock options			—						—									—						—						—						—						306						—						—						306
Net income (loss)			—						—									—						—						—						—						—						—						(60,866)						(60,866)
Change in other comprehensive income (loss)			—						—									—						—						—						—						—						2,495						—						2,495
Balance as of March 31, 2023			73,021,449						$	1,853,492								6,715,036						$	—					51,434,037						$	6					$	259,980					$	(1,297)					$	(686,604)					$	(427,915)
			Total Convertible Preferred Stock															Common Stock																								Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Accumulated Deficit						Total Stockholders’ Equity (Deficit)
									Class A												Class B
			Shares						Amount									Shares						Amount						Shares						Amount
Balance as of December 31, 2023			73,021,449						$	1,853,492								7,099,700						$	—					53,904,204						$	6					$	302,820					$	814					$	(716,562)					$	(412,922)
Issuance of common stock upon exercise of stock options, net			—						—									3,141,176						—						805,948						—						23,089						—						—						23,089
Issuance of common stock upon settlement of restricted stock units, net			—						—									6,173,372						1						624,115						—						(202,853)						—						—						(202,852)
Conversion of Class B common stock to Class A common stock			—						—									4,191,943						—						(4,191,943)						—						—						—						—						—
Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering			(73,021,449)						(1,853,492)									5,104,017						1						67,917,432						6						1,853,485						—						—						1,853,492
Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions and other offering costs			—						—									18,576,527						2						—						—						576,266						—						—						576,268
Stock-based compensation expense			—						—									—						—						—						—						577,508						—						—						577,508
Vesting of early exercised stock options			—						—									—						—						—						—						69						—						—						69
Net income (loss)			—						—									—						—						—						—						—						—						(575,066)						(575,066)
Change in other comprehensive income (loss)			—						—									—						—						—						—						—						(1,286)						—						(1,286)
Balance as of March 31, 2024			—						$	—								44,286,735						$	4					119,059,756						$	12					$	3,130,384					$	(472)					$	(1,291,628)					$	1,838,300

The accompanying notes are an integral part of these financial statements.

Reddit, Inc.

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

			Three months ended March 31,
			2024						2023
Cash flows from operating activities
Net income (loss)			$	(575,066)					$	(60,866)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization			3,743						3,338
Non-cash operating lease cost			1,253						3,269
Amortization of premium (accretion of discount) on marketable securities, net			(8,129)						(5,132)
Stock-based compensation			577,508						12,480
Other adjustments			485						16
Changes in operating assets and liabilities:
Accounts receivable			29,987						33,746
Prepaid expenses and other assets			(13,912)						(1,012)
Operating lease right-of-use assets and liabilities			(530)						(871)
Accounts payable			(2,178)						6,706
Accrued expenses and other liabilities			18,903						12,401
Net cash provided by (used in) operating activities			$	32,064					$	4,075
Cash flows from investing activities
Purchases of property and equipment			(2,851)						(356)
Purchases of marketable securities			(135,685)						(262,846)
Maturities of marketable securities			252,655						315,365
Proceeds from sale of marketable securities			—						36,789
Other investing activities			(15)						70
Net cash provided by (used in) investing activities			$	114,104					$	89,022
Cash flows from financing activities
Proceeds from issuance of Class A common stock in initial public offering, net of underwriting discounts and commissions			600,022						—
Proceeds from exercise of employee stock options			23,089						961
Taxes paid related to net share settlement of restricted stock units			(194,737)						(4,229)
Payments of initial public offering costs			(2,753)						(362)
Other financing activities			(4,450)						—
Net cash provided by (used in) financing activities			$	421,171					$	(3,630)
Net increase (decrease) in cash, cash equivalents, and restricted cash			567,339						89,467
Cash, cash equivalents, and restricted cash at the beginning of the period			401,226						435,860
Cash, cash equivalents, and restricted cash at the end of the period			$	968,565					$	525,327
Cash and cash equivalents			968,515						525,277
Restricted cash			50						50
Total cash, cash equivalents, and restricted cash			$	968,565					$	525,327
Supplemental disclosures of cash flow information
Cash paid for income taxes			$	164					$	287
Supplemental disclosure of noncash financing and investing activities:
Conversion of convertible preferred stock to common stock upon initial public offering			$	1,853,492					$	—
Taxes related to net share settlement of restricted stock units not yet paid			$	8,116					$	—
Reclassification of deferred offering costs to additional paid-in capital upon initial public offering			$	23,754					$	—
Operating lease right-of-use assets recognized in exchange for lease liabilities			$	—					$	12,014
Deferred offering costs not yet paid			$	6,022					$	1,703

The accompanying notes are an integral part of these financial statements.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

1. Description of Business

Description of Business

Reddit, Inc. (“Reddit,” “we,” “our,” or “us”) was incorporated in the state of Delaware. Our mission is to bring community, belonging, and empowerment to everyone in the world. We built Reddit with the belief that communities unlock the power of human creativity and create a sense of belonging and empowerment for their members. We believe the world needs community more than ever, and that this represents our greatest opportunity to further enrich the lives of everyone in the world. We are headquartered in San Francisco, California, and have several offices around the world.

2. Basis of Presentation and Significant Accounting Policies

Basis of Presentation of Unaudited Interim Financial Information

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim financial information. Our consolidated financial statements include the accounts of Reddit, Inc. and our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been omitted. Accordingly, the unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in our final prospectus, dated March 20, 2024, filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended, on March 21, 2024 (“Prospectus”) in connection with our IPO. The unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and reflect, in our opinion, all the adjustments of a normal, recurring nature that are necessary for the fair statement of the Company’s financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results expected for the full year or any other period.

Other than described below, there have been no changes to our significant accounting policies described in the “Notes to the Consolidated Financial Statements” included in our audited consolidated financial statements as of and for the year ended December 31, 2023 included in the Prospectus that have had a material impact on our consolidated financial statements and accompanying notes.

Initial Public Offering

On March 20, 2024, our initial public offering (“IPO”) was declared effective and our Class A common stock began trading on the New York Stock Exchange on March 21, 2024. On March 25, 2024, we completed our IPO in which we issued and sold 18,576,527 shares of Class A common stock, including 3,300,000 shares of Class A common stock pursuant to the underwriters’ exercise in full of their over-allotment option, and excluding 6,723,473 shares of Class A common stock sold in the IPO by certain of our existing stockholders, at a public offering price of $34.00 per share. We received net proceeds of $600.0 million after deducting underwriting discounts and commissions of $31.6 million. In connection with the closing of the IPO, all shares of our then-outstanding convertible preferred stock other than Series F-1 preferred stock automatically converted into an aggregate of 67,917,432 shares of Class B common stock and all then-outstanding shares of Series F-1 preferred stock automatically converted into 5,104,017 shares of Class A common stock. Following the IPO, we have three classes of authorized common stock – Class A common stock, Class B common stock, and Class C common stock.

Certain of our restricted stock units granted to employees included both service-based and performance-based vesting conditions (“Double Trigger RSUs”). The performance condition related to these awards was satisfied upon the effectiveness of the IPO. Upon the effectiveness of the IPO, we recognized $534.7 million of stock-based compensation expense. To meet the related tax withholding requirements, we withheld 4,861,113 shares of the 10,502,390 shares of Class A common stock issued and 723,341 shares of the 1,347,456 shares of Class B common stock issued. Based on the IPO public offering price of $34.00 per share, the tax withholding obligation was $189.9 million.

In connection with our IPO, we amended and restated our certificate of incorporation (“Restated Certificate”) which authorized 2,340,000,000 shares of capital stock, consisting of 2,000,000,000 shares of Class A common stock,

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

140,000,000 shares of Class B common stock, 100,000,000 shares of Class C common stock, and 100,000,000 shares of undesignated preferred stock.

Use of Estimates

The preparation of the unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Management’s estimates are based on historical information available as of the date of the consolidated financial statements and various other assumptions that we believe are reasonable under the circumstances. Actual results could differ materially from those estimates.

Significant estimates relate primarily to determining the fair value of stock-based awards, the fair value of assets and liabilities assumed in business combinations, and the incremental borrowing rate used to determine operating lease right-of-use assets and lease liabilities. On an ongoing basis, management evaluates our estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.

Functional Currency

Generally, the U.S. dollar is the functional currency for our subsidiaries, and therefore, foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at exchange rates at the balance sheet date and foreign currency denominated non-monetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Gains or losses from foreign currency remeasurement and settlements are included in other income (expense), net in the consolidated statements of operations. Net foreign exchange gains and losses were not material for the three months ended March 31, 2024 and 2023.

On January 1, 2024, we changed the functional currency of our U.K. subsidiary, Reddit UK Limited, from the U.S. dollar to the British pound. The change in functional currency is due primarily to the increased exposure to the British pound as our future operating cash flows for our U.K. subsidiary are expected to be in British pounds. We translate the financial statements of the U.K. subsidiary to U.S. dollars at exchange rates at the balance sheet date for assets and liabilities, and monthly average exchange rates for revenues and expenses. Translation gains and losses are recorded in accumulated other comprehensive income (loss) as a component of stockholders' equity (deficit). The change in the functional currency of Reddit UK Limited was accounted for prospectively from January 1, 2024 and did not have a material impact on our consolidated financial statements.

Deferred Offering Costs

Prior to our IPO, deferred offering costs, which consist of direct incremental legal, accounting, consulting, and other fees related to the IPO, were capitalized in other noncurrent assets on the consolidated balance sheets. After the IPO, the deferred offering costs were reclassified into additional paid-in capital as an offset against IPO proceeds. Deferred offering costs included in other noncurrent assets were $16.5 million as of December 31, 2023.

Concentration of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, marketable securities, and accounts receivable. We maintain cash and cash equivalents with several financial institutions. We believe that the financial institutions that hold our cash and cash equivalents are financially sound and, accordingly, minimal credit risks exist with respect to these balances. We maintain investments in U.S. and non-U.S. government securities, investment-grade corporate and government agency securities, certificates of deposit, commercial paper, and money market accounts that carry high credit ratings and accordingly, minimal credit risk exists with respect to these balances.

Emerging Growth Company Status

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

We have elected to irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, we will comply with new or revised accounting standards at the time when adoption of such standards is required for public companies that are non-emerging growth companies.

We will remain an emerging growth company until the earliest of (i) the last day of the first fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which our total annual gross revenue is at least $1.235 billion, or (c) when we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Accounting Pronouncements Not Yet Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires disclosure of incremental segment information on an annual and interim basis. All disclosure requirements of this standard are required for entities with a single reportable segment. This standard is effective for us in the annual period beginning January 1, 2024 and interim periods beginning January 1, 2025, with early adoption permitted. We are currently evaluating the impact the adoption will have on our consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update ASU No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 250-60): Accounting for and Disclosure of Crypto Assets, which requires an entity to measure crypto assets at fair value at each reporting period with changes recognized in net income. This standard also requires additional disclosures about the types of crypto assets held by entities and the changes in those holdings. The standard is effective for us beginning January 1, 2025, with early adoption permitted. We are currently evaluating the impact the adoption will have on our consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an entity to disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. This standard also requires certain disaggregated disclosures related to income from continuing operations, income tax expense, and income taxes paid. The standard is effective for us beginning January 1, 2025, with early adoption permitted. We are currently evaluating the impact the adoption will have on our consolidated financial statements.

3. Revenue

The following table represents our revenue disaggregated by source:

			Three months ended March 31,
			2024						2023
			(in thousands)
Advertising revenue			$	222,682					$	160,080
Other revenue			20,281						3,660
Total revenue			$	242,963					$	163,740

The following table represents our revenue disaggregated by geography based on the billing address of the customer:

			Three months ended March 31,
			2024						2023
			(in thousands)
United States			$	199,803					$	130,641
Rest of world(1)			43,160						33,099
Total revenue			$	242,963					$	163,740

---

(1)Other than the United States, no individual country represented 10% or more of total revenue during the three months ended March 31, 2024 and 2023.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

For the three months ended March 31, 2024 and 2023, revenue recognized from the deferred revenue balance as of December 31, 2023 and 2022 was $5.4 million and $5.0 million, respectively. We will recognize substantially all of the deferred revenue as of December 31, 2023 as revenue in 2024.

As of March 31, 2024, the aggregate amount of remaining performance obligations in contracts with an original expected duration exceeding one year is $188.1 million. This amount consists primarily of long-term data licensing contracts and excludes deferred revenue related to short-term advertising contracts and Reddit Premium subscriptions. We expect to recognize approximately $68.0 million within the next 12 months and the remaining thereafter.

4. Net Income (Loss) per Share

We compute net income (loss) per share of Class A and Class B common stock using the two-class method required for multiple classes of common stock and participating securities. Prior to the IPO, our participating securities included Series A, Series A-1, Series B, Series C, Series D, Series D-1, Series E, Series F, and Series F-1 convertible preferred stock, as the holders of these series of preferred stock were entitled to receive noncumulative dividends subject to certain requirements at an annual rate of 8% of the respective original issue price then in effect in the event that a dividend was paid on common stock.

In connection with our IPO, our Series A, Series A-1, Series B, Series C, Series D, Series D-1, Series E, and Series F preferred stock converted on a one-to-one basis into 67,917,432 shares of Class B common stock, and our Series F-1 preferred stock converted on a one-to-one basis into 5,104,017 shares of Class A common stock. These shares are weighted in the denominator of net loss per share for Class A and Class B common stock for the portion of the time outstanding subsequent to our IPO.

The holders of Series A, Series A-1, Series B, Series C, Series D, Series D-1, Series E, Series F, and Series F-1 convertible preferred stock did not have a contractual obligation to share in our losses. As such, our net losses for the three months ended March 31, 2023 were not allocated to these participating securities.

The following table presents the calculation of basic and diluted net income (loss) per share attributable to common stock:

			March 31, 2024
			Class A						Class B						Consolidated
			(in thousands, except share and per share data)
Numerator:
Net income (loss) attributable to common stockholders			$	(92,094)					$	(482,972)					$	(575,066)
Denominator:
Basic weighted-average common shares outstanding			11,248,688						58,991,804						70,240,492
Diluted weighted-average common shares outstanding			11,248,688						58,991,804						70,240,492
Basic and diluted income (loss) per share attributable to common stockholders:			$	(8.19)					$	(8.19)					$	(8.19)

			March 31, 2023
			Class A						Class B						Consolidated
			(in thousands, except share and per share data)
Numerator:
Net income (loss) attributable to common stockholders			$	(7,015)					$	(53,851)					$	(60,866)
Denominator:
Basic weighted-average common shares outstanding			6,698,085						51,416,661						58,114,745
Diluted weighted-average common shares outstanding			6,698,085						51,416,661						58,114,745
Basic and diluted income (loss) per share attributable to common stockholders:			$	(1.05)					$	(1.05)					$	(1.05)

As of March 31, 2024 and 2023, basic and diluted shares were the same as there were no securities that were dilutive.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

The following outstanding potentially dilutive shares, including stock options that have been exercised prior to vesting, were excluded from the computation of diluted net income (loss) per share attributable to common stock for the periods presented because the impact of including them would have been anti-dilutive.

			March 31, 2024
			Class A						Class B						Consolidated
Stock options			19,365,137						6,418,074						25,783,211
Unvested RSUs & RSAs			14,758,638						1,372,694						16,131,332
			34,123,775						7,790,768						41,914,543

			March 31, 2023
			Class A						Class B						Consolidated
Stock options			15,882,441						8,204,871						24,087,312
Unvested RSUs & RSAs			15,223,756						4,362,661						19,586,417
Preferred shares			5,104,017						67,917,432						73,021,449
			36,210,214						80,484,964						116,695,178

5. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

• Level 1: Quoted market prices in active markets for identical assets or liabilities

• Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data

• Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets

We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. There were no transfers between levels during the periods presented.

The following table sets forth our financial assets that are measured at fair value on a recurring basis:

									March 31, 2024
			Fair value hierarchy level						Cost or amortized cost						Gross unrealized gains						Gross unrealized losses						Fair value
									(in thousands)
Cash equivalents:
Money market funds			Level 1						$	876,482					$	—					$	—					$	876,482
Commercial paper			Level 2						18,114						—						(11)						18,103
Marketable securities:
U.S. treasury securities			Level 1						392,660						136						(436)						392,360
U.S. agency bonds			Level 2						45,111						17						(77)						45,051
Non-U.S. government securities			Level 2						4,880						—						(1)						4,879
Corporate bonds			Level 2						92,194						113						(159)						92,148
Commercial paper			Level 2						167,437						28						(68)						167,397
Total									$	1,596,878					$	294					$	(752)					$	1,596,420

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

									December 31, 2023
			Fair value hierarchy level						Cost or amortized cost						Gross unrealized gains						Gross unrealized losses						Fair value
									(in thousands)
Cash equivalents:
Money market funds			Level 1						$	345,555					$	—					$	—					$	345,555
Commercial paper			Level 2						9,994						—						(9)						9,985
Marketable securities:
U.S. treasury securities			Level 1						426,734						697						(188)						427,243
U.S. agency bonds			Level 2						77,535						13						(34)						77,514
Non-U.S. government securities			Level 2						21,723						10						(27)						21,706
Corporate bonds			Level 2						94,725						310						(81)						94,954
Certificates of deposit			Level 2						2,810						—						(1)						2,809
Commercial paper			Level 2						187,596						148						(24)						187,720
Total									$	1,166,672					$	1,178					$	(364)					$	1,167,486

Gross unrealized gains (losses) within accumulated other comprehensive income (loss) were immaterial as of March 31, 2024 and December 31, 2023. There were no impairment charges due to credit losses during the three months ended March 31, 2024 and 2023.

As of March 31, 2024, the amortized cost of marketable securities with maturities less than one year was $550.3 million. The amortized cost of marketable securities with maturities between one and five years was $152.0 million.

6. Balance Sheet Components

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

			March 31, 2024						December 31, 2023
			(in thousands)
Prepaid expenses			$	18,098					$	11,930
Other receivables			11,656						4,695
Interest receivable			2,852						3,071
Other			1,762						1,590
Total prepaid expenses and other current assets			$	34,368					$	21,286

Property and Equipment, Net

Property and equipment, net consisted of the following:

			March 31, 2024						December 31, 2023
			(in thousands)
Computer equipment, furniture, and fixtures			$	15,023					$	14,136
Leasehold improvements			7,643						7,597
Total property and equipment			22,666						21,733
Less: accumulated depreciation			(8,281)						(6,787)
Total property and equipment, net			$	14,385					$	14,946

Depreciation expense was $1.5 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

			March 31, 2024						December 31, 2023
			(in thousands)
Accrued compensation and benefits			$	55,212					$	37,964
Deferred revenue			8,468						7,250
Accrued expenses			31,034						26,740
Revenue share payable and other			4,290						2,549
Holdback liability from acquisitions			1,661						6,111
Other			6,059						2,735
Total accrued expenses and other current liabilities			$	106,724					$	83,349

7. Goodwill and Intangible Assets

Goodwill

The carrying amount of goodwill was $26.3 million as of December 31, 2023. There was no change in the carrying amount of goodwill during the three months ended March 31, 2024.

Acquired Intangible Assets

Acquired intangible assets consisted of the following:

			March 31, 2024
			Gross carrying value						Accumulated amortization						Net carrying value						Weighted-average remaining useful life (years)
			(in thousands, except year data)
Developed technology			$	43,160					$	15,093					$	28,067					3.3
Other intangible assets			600						567						33						0.1
Total acquired intangible assets			$	43,760					$	15,660					$	28,100

			December 31, 2023
			Gross carrying value						Accumulated amortization						Net carrying value						Weighted-average remaining useful life (years)
			(in thousands, except year data)
Developed technology			$	43,160					$	12,973					$	30,187					3.6
Other intangible assets			600						467						133						0.3
Total acquired intangible assets			$	43,760					$	13,440					$	30,320

Amortization expense was $2.2 million and $2.3 million for the three months ended March 31, 2024 and 2023, respectively.

Cryptocurrency

The net carrying value of our cryptocurrencies, which consisted primarily of Bitcoin and Ether, as well as all related cryptocurrency activity, was immaterial for the periods presented.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

8. Debt

Revolving Line of Credit

On October 8, 2021, we entered into a five-year, $750.0 million, revolving loan and standby letter of credit facility agreement (“Revolving Credit Facility”) of which $100.0 million can be issued as letters of credit. As of March 31, 2024, we have issued two letters of credit, one of which is denominated in a foreign currency, for an aggregate of $4.9 million, which reduced the letter of credit borrowings available under the Revolving Credit Facility to $95.1 million. The aggregate available balance under the Revolving Credit Facility was $745.1 million as of March 31, 2024.

On May 23, 2023, we amended the terms of the Revolving Credit Facility to replace LIBOR with Term SOFR as the interest rate benchmark. Under the amended terms of the Revolving Credit Facility, borrowings can be either ABR Loans, Term Benchmark Loans, or SONIA Loans. Outstanding ABR Loans bear interest at a rate equal to the greatest of (A) the Prime Rate, (B) the NYFRB Rate plus 0.5%, (C) the Adjusted Term SOFR Rate plus 1.0%, or (D) 1.0% (each as defined in the amended Revolving Credit Facility), in each case plus 0.25%. Outstanding Term Benchmark Loans bear interest at the Adjusted Term SOFR Rate, the Adjusted EURIBOR Rate, the Adjusted AUD Rate, or the Adjusted CDOR Rate (each as defined in the amended Revolving Credit Facility), as applicable, in each case, plus 1.25%. Outstanding SONIA Loans bear interest at a rate equal to the Adjusted Daily Simple SONIA (as such term is defined in the amended Revolving Credit Facility) plus 1.25%. We are required to pay a quarterly commitment fee that accrues at 0.15% per annum on the unused portion of the aggregate commitments under the credit facility.

The Revolving Credit Facility contains customary conditions on our borrowing, including events of default and covenants. Covenants include restrictions on our and certain of our subsidiaries’ ability to incur indebtedness, grant liens, make distributions to holders of our preferred and common stock, make investments, or engage in transactions with our affiliates, and require us to maintain a minimum liquidity. The obligations under the Revolving Credit Facility are secured by liens on substantially all of our assets, including intellectual property assets. We were in compliance with all covenants as of March 31, 2024.

9. Commitments and Contingencies

Purchase Obligations

We enter into contracts with non-cancellable purchase obligations, primarily related to third-party cloud infrastructure agreements under which we are granted access to certain cloud services. During the three months ended March 31, 2024, there were no material changes outside the normal course of business to the purchase obligations as disclosed in the audited consolidated financial statements as of and for the year ended December 31, 2023 included in the Prospectus.

Legal Matters and Indemnifications

Please refer to the “Notes to the Consolidated Financial Statements” included in the audited consolidated financial statements as of and for the year ended December 31, 2023 included in the Prospectus for details on legal proceedings and indemnifications. There were no material changes to legal matters or indemnifications for the three months ended March 31, 2024.

10. Stockholders' Equity (Deficit)

Class A, Class B, and Class C Common Stock

We have three classes of authorized common stock, Class A, Class B, and Class C common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share. Shares of Class B common stock may be converted to Class A common stock at any time at the option of the stockholder. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock (i) upon any transfer, except for certain permitted transfers set forth in the Restated Certificate, including transfers to family members, certain trusts for estate planning purposes, entities under common control with or controlled by such holder of our Class B common stock, and with respect to Advance Magazine Publishers Inc., any Advance Entity (as defined in the Restated Certificate), or (ii) upon the first date on which the aggregate number of outstanding shares of Class B common stock ceases to represent at least 7.5% of the aggregate number of then-outstanding shares of our Class A and Class B common stock. Once converted into Class A common stock, the Class B common stock will not be reissued.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

In connection with our IPO, the Restated Certificate became effective, which authorized 100,000,000 shares of Class C common stock. Each holder of Class C common stock is entitled to no votes per share. We have no current plans to issue any Class C common stock.

Preferred Stock

Immediately prior to the completion of our IPO, all of our then-outstanding shares of convertible preferred stock were automatically converted into 5,104,017 shares and 67,917,432 shares of our Class A and Class B common stock, respectively.

In connection with our IPO, the Restated Certificate became effective, which authorized 100,000,000 shares of undesignated preferred stock with a par value of $0.0001 per share. Our board of directors has the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, of each series of preferred stock.

Common Stock Reserved for Issuance

In February 2024, our board of directors adopted the 2024 Incentive Award Plan (the “2024 Plan”), which became effective in connection with the IPO. Under the 2024 Plan, 31,747,592 shares of our Class A common stock were reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, RSU awards, performance bonus awards, performance stock unit awards, dividend equivalents, or other stock or cash based awards. The 2024 Plan also includes shares of our Class A common stock that remained available for grant of future awards under the at the time the 2024 Plan became effective. Following the effective date of our IPO, the number of shares reserved for issuance under the 2024 Plan will increase by an annual increase on the first day of each fiscal year beginning in 2025 and ending in 2034, equal to the lesser of (A) 5% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding year and (B) such smaller number of shares of stock as determined by our board of directors; provided, however, that no more than 185,735,952 shares of stock may be issued upon the exercise of incentive stock options.

We have reserved the following shares of common stock, on an as-converted basis, for future issuance:

			March 31, 2024						December 31, 2023
Outstanding stock options			25,773,215						29,795,909
Outstanding RSUs			16,058,809						27,627,171
Conversion of outstanding convertible preferred stock			—						73,021,449
Remaining shares reserved for future issuances under the 2017 Plan			—						7,919,000
Remaining shares reserved for future issuances under the 2024 Plan			37,490,765						—
Shares reserved for community impact initiatives and charitable activities			1,337,205						1,337,205
Total shares of common stock reserved			80,659,994						139,700,734

The remaining shares reserved for future issuance under the 2024 and 2017 Plans relate to Class A and Class B common stock.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

11. Stock-Based Compensation

RSUs and RSAs

Our restricted stock units (“RSUs”) and restricted stock awards (“RSAs”) vest based on the terms in the grant agreements and generally vest ratably over one to four years from the vesting commencement date. The following table summarizes the RSU and RSA activity for the three months ended March 31, 2024:

			Service- based RSUs						RSAs												Market and Performance- based RSUs						Total RSUs and RSAs						Weighted- average grant date fair value
Unvested as of December 31, 2023			25,406,057						87,030												1,393,446						26,886,533						$	29.17
Granted			1,636,151						—												—						1,636,151						$	31.55
Vested			(11,309,117)						(14,507)												(678,632)						(12,002,256)						$	31.60
Canceled/Forfeited			(378,307)						—												(10,789)						(389,096)						$	28.49
Unvested as of March 31, 2024			15,354,784						72,523												704,025						16,131,332						$	27.62

As of March 31, 2024, we had RSUs and RSAs outstanding for 16,131,332 common shares, of which 14,758,638 relate to Class A common stock and 1,372,694 relate to Class B common stock. Total unrecognized stock-based compensation expense related to RSUs and RSAs was $279.6 million as of March 31, 2024 and is expected to be recognized over a weighted-average period of 1.69 years.

Stock Options

Stock options vest based on terms in the stock option agreement and generally vest over five years quarterly or four years with 25% of the award vesting one year from the vesting commencement date then ratably over the following three years. The following table summarizes the stock option activity and activity regarding shares available for grant under our equity incentive plans during the three months ended March 31, 2024:

			Outstanding stock options						Weighted- average exercise price						Weighted- average remaining contractual life (years)						Aggregate intrinsic value
			(in thousands, except share, per share, and year data)
Balance as of December 31, 2023			29,795,909						$	17.83					6.00						$	500,472
Exercised			(3,947,124)						5.85
Canceled/Forfeited			(75,570)						6.72
Balance as of March 31, 2024			25,773,215						$	19.70					6.07						$	839,632
Vested as of March 31, 2024			16,840,499						$	7.11					4.21						$	715
Vested and expected to vest as of March 31, 2024			25,773,215						$	19.70					6.07						$	839,632

As of March 31, 2024 we had outstanding stock options for 25,773,215 common shares, of which 19,355,141 relate to Class A common stock and 6,418,074 relate to Class B common stock. Total unrecognized stock-based compensation expense related to stock options was $136.9 million as of March 31, 2024 and is expected to be recognized over a weighted-average period of 4.59 years.

Reddit, Inc.

Notes to the Consolidated Financial Statements

(unaudited)

Stock-Based Compensation

The following table summarizes the components of stock-based compensation expense recognized in the consolidated statements of operations for all periods presented:

			Three months ended March 31,
			2024						2023
			(in thousands)
Cost of revenue			$	258					$	38
Research and development			316,514						7,560
Sales and marketing			60,790						1,697
General and administrative			199,946						3,185
Stock-based compensation			$	577,508					$	12,480

12. Income Taxes

Our provision for income taxes for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, we update the estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, we make a cumulative adjustment in such period. For the three months ended March 31, 2024 and 2023, income tax expense (benefit) was immaterial. We continue to maintain a full valuation allowance on our remaining federal and state deferred tax assets.

13. Related Parties and Related-Party Transactions

Advance Magazine Publishers Inc.

As of March 31, 2024, Advance Magazine Publishers Inc. (“Advance”) held approximately 25% of our outstanding shares of Class A and Class B common stock and is a related party to Reddit as Advance holds more than 10% of the voting power of our outstanding Class A and Class B common stock. Moreover, pursuant to the terms of the Restated Certificate and that certain Governance Agreement, dated as of March 19, 2024, by and among us, Steve Huffman, our Chief Executive Officer and a member of our board of directors, and Advance, Advance has the right to designate two directors for inclusion in the slate of nominees for election as directors at an annual or special meeting of stockholders, to designate one nonvoting observer to the board of directors, and to have one of its designees sit on each committee of the board of directors (other than the audit committee), subject to certain limitations set forth in the Restated Certificate. Additionally, the affirmative vote or written consent of Advance will be required for us to take certain corporate actions. These rights will continue until the first to occur of the following events: (i) a change of control of Advance or Reddit; (ii) Advance and its permitted transferees cease to, in the aggregate, beneficially own at least 5% of the aggregate of the then-outstanding shares of our Class A and Class B common stock; and (iii) (a) Advance and its permitted transferees cease to, in the aggregate, beneficially own at least 50% of the number of outstanding shares of our equity securities held by Advance upon the closing of our IPO, and (b) the then-outstanding shares of our Class B common stock, in the aggregate, represents less than 7.5% of the aggregate of the then-outstanding shares of our Class A and Class B common stock.

We currently sublease office space in New York and Chicago from Advance. Total lease costs and other related expenses for our subleases were immaterial for the three months ended March 31, 2024 and 2023.