Reddit Inc (NYSE:RDDT) is known mostly as a social media company, but Chief Financial Officer Drew Vollero says while the company shares similarities to others in the field, it’s a true "1-of-1."
Reddit’s Unique Position and Strengths
Since going public, Reddit has beaten analyst estimates for revenue and earnings per share in each quarter, showing strong user growth and revenue from advertising and AI partnerships.
That could be why Vollero tells Benzinga the company doesn’t see itself having close competition.
"When we went public, investors looked for comparisons to other social media companies," Vollero tells Benzinga. "But over time, we believe it’s become increasingly clear that Reddit’s platform and financial model are ‘1-of-1’."
Vollero highlights in the interview three key unique strengths that Reddit has that others don’t: engagement, largely unduplicated reach, and commercial intent.
"Those are powerful raw materials and difficult to replicate at scale."
Vollero says social media companies are focused on attention and performance, but Reddit is focused on shared interest and community.
"There really isn’t a product like Reddit, at least nothing at scale that operates as we do."
The Reddit CFO says the company is making product changes to make user experiences better and not because it needs to catch up to others.
"On the ad tech side, we certainly share similar customers, but we are much earlier in our journey than most, so we really compete mostly against ourselves there too."
What’s Next for Reddit
Vollero tells Benzinga the company has a "lot of room to grow."
"Our expectation is that we’ll continue to gain market share as we improve our product, grow users, and deliver better outcomes for advertisers."
Reddit stock is up 21.8% over the last 52 weeks at the time of writing. The gain comes with the company consistently beating analyst estimates.
The company also recently announced a $1 billion share repurchase program earlier this year.
"This decision reflects confidence in the durability of our model and provides a flexible way to return capital without compromising our investment," Vollero tells Benzinga.
Asked about the potential for dividend payouts to shareholders, Vollero said it’s likely the company focuses on using its capital for high-return investments like share buybacks and disciplined M&A opportunities.
Read Also: Reddit CEO Steve Huffman Calls Platform 'Fuel' For AI Growth
Photo: JarTee / Shutterstock
