Reddit, Inc.
RDDT · NYSE
Next quarter
Expected to report Feb 4, 2027 — estimated from last year’s reporting date.
Consensus is $1.76 EPS for Dec 2026 across 11 estimates, ranging $1.44 to $2.01.
RDDT Sep 2026
- 6.87%
- -29.22%
- $1.31
- $1.40
- —
- $894.96M
Reported results
- $894.96M
- 91.53%
- $261.59M
- 29.23%
- $283.26M
- $1.40
Highlights
- Revenue and EPS: Q3 revenue rose 53% year over year to $895.0 million and 11% from Q2; diluted EPS of $1.40 beat the $1.31 consensus by 6.87%.
- Advertising monetization: Ad revenue grew 54% to $847.0 million, with ad prices up about 34% and impressions delivered up about 15%; other revenue increased 35% to $48.0 million.
- Profitability: Net income rose 74% year over year to $283.3 million and 12% sequentially; Adjusted EBITDA increased 70% to $402.3 million, with margin expanding to 44.9% from 40.3%.
- Users and geography: DAUq increased 12% year over year to 130.3 million and WAUq rose 16% to 515.2 million, with international DAUq up 24% while U.S. DAUq declined 2%.
- U.S. engagement pressure: Global DAUq was flat sequentially as U.S. DAUq fell 5%, offsetting 3% growth internationally; Reddit attributed the pressure predominantly to third-party search changes.
- Cash generation: Operating cash flow was $363.8 million and free cash flow was $362.6 million, both roughly double year-ago levels; cash, equivalents and marketable securities totaled $3.03 billion.
- Q4 outlook and capital returns: Reddit guided to revenue of $1.00–$1.03 billion and Adjusted EBITDA of $480–$510 million; it repurchased about 670,000 shares for $100 million during Q3.
Analysis
Reddit delivered a strong growth and margin quarter: revenue of $895.0 million increased 53% year over year and 11% sequentially, while diluted EPS of $1.40 exceeded the $1.31 consensus by 6.87%. Net income reached $283.3 million, up 74% from $162.7 million a year ago and 12% from Q2’s $252.8 million. Operating income rose to $261.6 million from $138.5 million a year earlier and $231.7 million last quarter. Adjusted EBITDA grew 70% to $402.3 million, and its margin widened 4.6 percentage points to 44.9%.
The main growth engine remained advertising monetization: ad revenue rose 54% to $847.0 million, driven by roughly 34% higher ad pricing and 15% more impressions. User growth was more uneven. International DAUq rose 24% year over year, but U.S. DAUq declined 2%; sequentially, global DAUq was flat as a 5% U.S. decline offset 3% international growth. Reddit cited third-party search changes as a primary headwind. Cash generation was substantial, with $363.8 million in operating cash flow and $362.6 million in free cash flow. For Q4, the company expects revenue of $1.00–$1.03 billion and Adjusted EBITDA of $480–$510 million.
Advertising monetization
- Ad-led growth: Advertising revenue increased 54% year over year to $847.0 million, accounting for most of total revenue growth; other revenue rose 35% to $48.0 million.
- Pricing and volume: Management attributed ad revenue growth primarily to improved pricing and, to a lesser extent, impression growth. Ad prices increased about 34%, supported by stronger advertiser demand and performance across ad objectives; delivered impressions increased about 15%, aided in part by ad-load optimization and new placements.
- Geographic mix: U.S. revenue increased 50% to $718.9 million, while international revenue grew 67% to $176.1 million. Global ARPU rose 36% to $6.87; U.S. ARPU increased 53% to $13.82 and international ARPU rose 32% to $2.43.
User growth and search
- Reach: Global DAUq grew 12% year over year to 130.3 million and WAUq increased 16% to 515.2 million. International DAUq rose 24% to 79.6 million, while U.S. DAUq fell 2% to 50.7 million; U.S. WAUq was essentially unchanged at 188.5 million.
- Engagement mix: Logged-in DAUq increased 7% year over year to 53.5 million, including 1% growth in the U.S. to 23.4 million and 11% international growth to 30.1 million. Logged-out DAUq grew 17% globally, driven by 33% international growth, while declining 4% in the U.S.
- Search-related headwind: Global DAUq was flat quarter over quarter: international growth of 3% was offset by a 5% U.S. decline. Reddit said gains from marketing and product improvements were offset predominantly by third-party search engine changes, including volatility in referral traffic.
Earnings and margins
- GAAP results: Operating income increased 89% year over year to $261.6 million, from $138.5 million, and rose from $231.7 million in Q2. Net income was $283.3 million versus $162.7 million a year ago and $252.8 million last quarter.
- Operating leverage: Revenue growth outpaced total costs and expenses, which increased 42% year over year to $633.4 million. Gross margin expanded 50 basis points to 91.5%; operating income was 29.2% of revenue, compared with 23.7% a year earlier.
- Adjusted EBITDA: Adjusted EBITDA increased 70% to $402.3 million from $236.0 million, and margin expanded to 44.9% from 40.3%. The measure excludes stock-based compensation and related taxes, which totaled $136.4 million in the quarter, up from $93.6 million a year earlier.
Cash and capital returns
- Cash conversion: Operating cash flow increased 96% year over year to $363.8 million; free cash flow, defined as operating cash flow less property and equipment purchases, rose 98% to $362.6 million. Capital expenditures were $1.2 million.
- Liquidity: Cash, cash equivalents and marketable securities totaled $3.03 billion at September 30, 2026.
- Repurchases: Reddit bought back approximately 670,000 Class A shares for $100 million in Q3, at an average price of $149.81 per share. Fully diluted shares outstanding were 206.3 million, down 0.3% from the prior quarter.
Fourth-quarter outlook
- Guidance: Reddit expects Q4 2026 revenue of $1.00–$1.03 billion and Adjusted EBITDA of $480–$510 million. The company did not provide a reconciliation of its forward-looking non-GAAP EBITDA guidance to GAAP measures.
- Seasonality: The revenue outlook implies sequential growth from Q3’s $895.0 million; Reddit notes that advertising revenue typically benefits from stronger advertiser spending in the fourth quarter.
