Reddit (NYSE:RDDT) Releases Quarterly Earnings Results, Beats Expectations By $0.28 EPS

Reddit (NYSE:RDDT) announced its quarterly earnings data on Thursday. The company reported $1.24 EPS for the quarter, topping the consensus estimate of $0.96 by $0.28, Zacks reports. Reddit had a net margin of 18.33% and a return on equity of 14.94%. The company had revenue of $725.61 million during the quarter, compared to the consensus estimate of $665.80 million. During the same quarter last year, the firm posted $0.36 EPS. The company’s quarterly revenue was up 69.7% on a year-over-year basis.

Here are the key takeaways from Reddit’s conference call:

• Breakout financial year: Reddit reported 2025 revenue of $2.2 billion (+69% YoY), delivered $530 million in full-year net income, and generated strong margins and cash flow (Q4 free cash flow $264M; adjusted EBITDA margin ~38%).
• Ad business momentum: Q4 ad revenue grew 75% YoY to $690M with active advertisers up >75% YoY, strong lower-funnel performance (conversion volumes doubled) and Reddit Max beta showing a ~17% CPA reduction and 27% conversion lift.
• User and product progress: Engagement is rising (Q4 DAU 121M, WAU 471M) and search/Reddit Answers use expanded (weekly searchers ~80M; Answers queries ~15M), while product priorities for 2026 focus on onboarding, personalization and unified search — the company will phase out logged-in vs logged-out reporting in H2 2026.
• Capital allocation and guidance: Board authorized a $1 billion share repurchase program, cash ended near $2.5B with a >$1B cash target, and Q1 2026 guidance targets ~$595–605M revenue (~53% YoY) with adjusted EBITDA $210–220M.

Reddit Price Performance

RDDT opened at $152.99 on Friday. Reddit has a fifty-two week low of $79.75 and a fifty-two week high of $282.95. The firm has a market capitalization of $28.99 billion, a P/E ratio of 87.92, a PEG ratio of 1.06 and a beta of 2.17. The company’s 50-day moving average is $222.78 and its 200 day moving average is $214.72.

Insiders Place Their Bets

In other Reddit news, CFO Andrew Vollero sold 3,674 shares of the stock in a transaction dated Tuesday, January 13th. The shares were sold at an average price of $261.21, for a total value of $959,685.54. Following the completion of the sale, the chief financial officer owned 251,644 shares in the company, valued at approximately $65,731,929.24. This trade represents a 1.44% decrease in their position. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, insider Benjamin Seong Lee sold 3,320 shares of the company’s stock in a transaction that occurred on Friday, January 9th. The shares were sold at an average price of $260.22, for a total value of $863,930.40. Following the completion of the transaction, the insider directly owned 62,608 shares of the company’s stock, valued at approximately $16,291,853.76. This represents a 5.04% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 523,511 shares of company stock worth $114,237,285 in the last ninety days. 34.25% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Reddit

Institutional investors have recently bought and sold shares of the company. Geneos Wealth Management Inc. increased its position in Reddit by 344.6% in the first quarter. Geneos Wealth Management Inc. now owns 369 shares of the company’s stock worth $39,000 after buying an additional 286 shares during the last quarter. Quarry LP grew its stake in shares of Reddit by 69.4% during the 3rd quarter. Quarry LP now owns 703 shares of the company’s stock worth $162,000 after acquiring an additional 288 shares during the period. Glenmede Investment Management LP bought a new position in shares of Reddit during the 3rd quarter worth $206,000. Tcfg Wealth Management LLC purchased a new stake in Reddit in the 3rd quarter worth about $218,000. Finally, Apexium Financial LP bought a new stake in Reddit in the 3rd quarter valued at about $235,000.

Wall Street Analysts Forecast Growth

RDDT has been the topic of several research reports. Weiss Ratings reiterated a “hold (c-)” rating on shares of Reddit in a report on Monday, December 29th. Argus set a $300.00 target price on Reddit in a research report on Friday, January 9th. Raymond James Financial reiterated a “strong-buy” rating and issued a $250.00 price target (up previously from $225.00) on shares of Reddit in a report on Monday, October 20th. China Renaissance began coverage on Reddit in a research note on Tuesday, December 9th. They issued a “buy” rating and a $300.00 price objective for the company. Finally, Piper Sandler reaffirmed an “overweight” rating on shares of Reddit in a research report on Monday, December 1st. Two research analysts have rated the stock with a Strong Buy rating, sixteen have given a Buy rating, eleven have given a Hold rating and one has given a Sell rating to the company’s stock. According to MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and an average target price of $245.36.

Key Reddit News

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q4 beat — Reddit reported $1.24 EPS and $725.6M revenue, topping consensus and showing margin improvement, which supports higher valuation multiple and investor confidence. Reddit Inc. (RDDT) Tops Q4 Earnings and Revenue Estimates
• Positive Sentiment: Raised near-term revenue outlook — management guided Q1 revenue ~$595–605M, above Street estimates, and forecast that AI enhancements are already lifting ad demand. That beat/guide combo drove strong after-hours buying. Reddit forecasts revenue above estimates as AI fuels ad sales
• Positive Sentiment: $1B share buyback — Reddit announced a $1 billion repurchase program, which reduces float and signals capital-return confidence, a material near-term support for the stock. Reddit Reports Fourth Quarter and Full Year 2025 Results; Announces $1 Billion Share Repurchase Program
• Neutral Sentiment: AI search opportunity — management flagged an AI-powered search product as a large long-term revenue opportunity, but it’s not yet monetized; positive upside but with execution and timing risk. Reddit looks to AI search as its next big opportunity
• Neutral Sentiment: Analyst mix and bull narratives — some bullish write-ups and varied analyst opinions (consensus “Moderate Buy” and mixed ratings) mean upside is tied to continued execution on ad monetization and AI. Reddit, Inc. (RDDT): A Bull Case Theory
• Negative Sentiment: CEO insider selling — CEO Steve Huffman sold several blocks of shares in recent months (most recently ~18,000 shares), which has previously pressured sentiment and contributed to pre-earnings weakness. SEC Form 4 — Insider Selling
• Negative Sentiment: Pre-earnings pullback — the stock had a notable pullback ahead of results amid sell-side caution and reporting of insider sales; that increases volatility risk if future execution slips. Reddit Stock Extends Pullback Ahead of Earnings

About Reddit

Reddit is an online social news aggregation, discussion and content-sharing platform organized around user-created communities called “subreddits,” each focused on a particular topic or interest. Registered users submit links, text posts, images and video, and community members vote and comment to surface popular content. The site is accessed via its web platform and mobile apps for iOS and Android, and it supports live events such as Ask Me Anything (AMA) sessions and community-driven discussions.

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit is headquartered in San Francisco and serves a global audience with particularly large user bases in the United States and other English-speaking markets.