Reddit (RDDT) risk factors, FY2025 10-K

Risks Related to Our Business

1. 01We face intense competition, and if we fail to grow or retain our user base or maintain user engagement, our business, results of operations, financial condition, and prospects could be adversely affected27% rewritten
2. 02Our business depends on a strong brand and reputation, and if we are unable to maintain and enhance our brand and reputation, our ability to expand our user and advertiser bases will be impaired and our business, results of operations, financial condition, and prospects could be harmed
3. 03Changes in internet search engine algorithms and dynamics could have a negative impact on traffic for our website and, ultimately, our business, results of operations, financial condition, and prospects38% rewritten
4. 04We may not sustain our growth rate, and our results of operations may fluctuate from quarter to quarter, which makes them difficult to predict22% rewritten
5. 05We are in the early stages of monetizing our business and expanding our platform internationally, and there is no assurance that we will be able to scale our business for future growth83% rewritten
6. 06If we do not develop successful new products and services or improve existing products and services, our business will suffer40% rewritten
7. 07Our business relies on an approach to content moderation that, while empowering community-led authenticity, can also result in content on the platform that can be unrelatable, offensive, and that may pose inherent risks
8. 08Our ability to generate revenue depends on the development and availability of tools to accurately measure the effectiveness of advertisements on our platform
9. 09We rely on internal company data, assumptions, and estimates to calculate certain of our key metrics, and real or perceived inaccuracies in such current or historical metrics may harm our reputation and negatively affect our business
10. 10Disruptions or other business interruptions that affect the availability of our platform could adversely impact our operations and overall business
11. 11If we fail to detect attempts to manipulate our platform, including fraudulent activity within our advertising systems, Redditors and our advertisers could lose confidence in us, thereby damaging our reputation and deterring usage of our products and services
12. 12We have explored, and will continue to explore, business opportunities in licensing Reddit content for purposes that do not conflict with our values and the rights of Redditors. We are only in the early stages of these content licensing efforts and we may not be able to grow these efforts into a sustainable business
13. 13We are subject to certain risks as a mission-based company25% rewritten

Risks Related to Human Capital and Culture

1. 14We cannot assure you that we will effectively manage our growth or maintain our corporate culture as we grow31% rewritten
2. 15Our business depends on attracting and retaining high-quality personnel in sales, services, engineering, marketing, finance, and support functions
3. 16We depend on our senior management team and other key employees, and the loss of one or more of these employees could adversely affect our business

Risks Related to Cybersecurity, Information Systems, and Intellectual Property

1. 17Our business, results of operations, financial condition, and prospects may be harmed by our failure to timely and effectively scale and adapt our existing technology and infrastructure
2. 18We anticipate that our ongoing efforts related to data privacy, safety, security, and content review will identify instances of misuse of user data or other undesirable activity by third parties on and off our platform
3. 19Our products and services may contain undetected software errors, bugs, or other vulnerabilities, which could harm our business, results of operations, financial condition, and prospects
4. 20Many of our products and services contain third-party open source software components, and failure to comply with the terms of the underlying open source software licenses could adversely affect our business, results of operations, financial condition, and prospects
5. 21We may be unable to obtain, maintain, protect, defend, or enforce our intellectual property adequately, which could harm our business, results of operations, financial condition, and prospects
6. 22We have and may in the future be subject to claims that we violated certain third-party intellectual property rights, which, even where meritless, can be costly to defend and could adversely affect our business, results of operations, financial condition, and prospects

Risks Related to Governmental Regulation and Litigation

1. 23Our business is subject to increasingly complex and evolving laws, rules, regulations, industry standards, and other legal obligations regarding content, consumer protection, competition, privacy, and other matters42% rewritten
2. 24Redditors and othersNew
3. 25Pending and future litigation could lead us to incur significant costs and adversely affect our business, results of operations, financial condition, and prospects34% rewritten
4. 26We are subject to governmental export controls and economic sanctions laws that could impair our ability to compete in global markets or subject us to liability if we are not in full compliance with applicable laws

Risks Related to Financial and Accounting Matters

1. 27Changes in tax laws or tax rulings could adversely affect our effective tax rates, results of operations, and financial condition
2. 28We may have exposure to greater than anticipated tax liabilities
3. 29Our ability to use net operating loss carryforwards and other tax attributes may be limited due to certain provisions of the Internal Revenue Code or state tax law
4. 30If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired44% rewritten
5. 31Our revolving credit facility contains restrictive and financial covenants that may limit our operational flexibility. If we fail to meet our obligations under the credit facility, our operations may be interrupted and our business, results of operations, financial condition, and prospects could be adversely affected32% rewritten
6. 32We might require additional capital to support business growth, and this capital might not be available on terms favorable to us, or at all
7. 33As part of our business strategy, we have made and intend to make acquisitions to expand our products and services, and grow our business in response to changing technologies, Redditor and advertiser demands, and competitive pressures

Risks Related to Ownership of Our Class A Common Stock

1. 34The market price of our Class A common stock may be volatile, regardless of our underlying business, our results of operations, macroeconomic conditions, or industry fundamentals, and we may not be able to meet investor or analyst expectations25% rewritten
2. 35Interest in our Class A common stock from retail and other individual investors, for reasons unrelated to our underlying business or macroeconomic or industry fundamentals, could result in increased volatility in the market price of our Class A common stock
3. 36We cannot guarantee that our share repurchase program will be fully implemented or that such program will enhance the long-term value of the share price of our Class A common stockNew
4. 37The multi-class structure of our common stock has the effect of concentrating voting control with those stockholders who held our capital stock prior to the listing of our Class A common stock on the NYSE
5. 38If industry or financial analysts do not publish research or reports about our business, or if they issue inaccurate or unfavorable research regarding our Class A common stock, the trading volume and market price of our Class A common stock could decline
6. 39We do not intend to pay dividends in the foreseeable future. As a result, your ability to achieve a return on your investment will depend on appreciation in the market price of our Class A common stock
7. 40Anti-takeover provisions contained in our amended and restated certificate of incorporation and amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt
8. 41These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management
9. 42Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, in each case to the fullest extent permitted by the Delaware General Corporation Law
10. 43Our amended and restated certificate of incorporation provides, that30% rewritten