New Street Research - REDDIT INC (RDDT) Reddit (RDDT, Neutral, $105 target) What’s driving the spike in ad monetization?

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New Street Research

Dan Salmon

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Reddit (RDDT, Neutral, $105 target) What’s driving the spike in ad monetization?

The most important change to the RDDT investment story this quarter was how upside versus expectations was driven less by user growth (which while still very strong at +47%, finally began to decelerate), and instead by much better-than-expected ad monetization ($3.24 advertising ARPU vs. our $2.74 estimate for 3Q24).

12/11/2024 1 EN

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REDDIT INC

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US75734B1008 New York Stock Exchange United States

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Dan Salmon

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Reddit (RDDT, Neutral, $105 target) First Take: Strong results, but not enough for high expectations

What’s New: In this first take following tonight’s results, we focus on: 1. Performance advertising accelerating, approaching 2/3 of ad revenue 2. Search experience improving, monetization potential building 3. Mid-size clients increasingly in focus for data licensing 4. Operating leverage continues to shine through

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Vermilion Research

Vital Signs: Actionable charts

In this product we rank the most positive and negative domestic stocks, filter the symbols by market-cap and trading volume, and then divide the companies into sectors and groups. We then manually look through charts leadership/changes, bottoms-up/top-down ideas, short-term patterns that may have long-term significance, etc. We believe you will find this product valuable as significant price and relative moves begin in the daily charts.

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Orange (Buy, TP: €15.1, +43%) Q4 24: EBITDA beat, some good EBITDA/FCF guidance; growth undervalued

Orange has reported a good set of results, with Telco EBITDA c+1.2% ahead of consensus, and has lifted FCF guidance for 2025 by c3%, and guided to EBITDA c1% ahead of consensus for FY25.

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Chris Hoare

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KT (Buy, KRW 85,000, +88%) Q4 24 Quick Take: Attractive value play with improving growth and margin outlook

KT reported a decent set of underlying results if excluding the one-off costs related to its early retirement programme which was well flagged earlier. Service revenue also recovered back to growth as Enterprise accelerated even despite the ongoing restructuring of less profitable business

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Chris Hoare

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TIM Brasil (Buy, TP: BRL22, +27%) New R$1bn share buyback plan approved; material improvement to overall shareholder remuneration

TIM Brasil has approved a new share buyback plan, up to R$1bn (US$ 173m), which represents a significant uptick in overall shareholder remuneration. This is another positive development following its new medium term guidance. With a net cash position and 14% 2025 FCFE yield, the stock is a compelling Buy and represents one of our Top Picks in EM with a R$ 22 price target.

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Reddit (RDDT, Neutral, $105 target) What’s driving the spike in ad monetization?

Reddit (RDDT, Neutral, $105 target) First Take: Strong results, but not enough for high expectations

Vital Signs: Actionable charts

Orange (Buy, TP: €15.1, +43%) Q4 24: EBITDA beat, some good EBITDA/FCF guidance; growth undervalued

KT (Buy, KRW 85,000, +88%) Q4 24 Quick Take: Attractive value play with improving growth and margin outlook

TIM Brasil (Buy, TP: BRL22, +27%) New R$1bn share buyback plan approved; material improvement to overall shareholder remuneration

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