Reddit (NYSE:RDDT) Announces Quarterly Earnings Results

Reddit (NYSE:RDDT) released its quarterly earnings results on Thursday. The company reported $1.24 EPS for the quarter, topping analysts’ consensus estimates of $0.96 by $0.28, Zacks reports. The business had revenue of $725.61 million during the quarter, compared to analysts’ expectations of $665.80 million. Reddit had a net margin of 24.05% and a return on equity of 22.03%. The business’s quarterly revenue was up 69.7% compared to the same quarter last year. During the same quarter in the previous year, the company earned $0.36 EPS.

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 Trading Down 7.8%

NYSE RDDT traded down $11.78 on Friday, hitting $139.27. The company’s stock had a trading volume of 22,016,851 shares, compared to its average volume of 5,184,237. The firm has a market cap of $26.39 billion, a P/E ratio of 53.16, a PEG ratio of 1.05 and a beta of 2.17. Reddit has a 52-week low of $79.75 and a 52-week high of $282.95. The company’s 50-day simple moving average is $221.22 and its 200 day simple moving average is $214.67.

Key Headlines Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Strong Q4 results and raised guidance — Reddit reported Q4 EPS and revenue above estimates and forecast Q1 revenue above Street expectations, a key reason the stock rallied after the print. Reddit forecasts revenue above estimates as AI fuels ad sales
• Positive Sentiment: $1 billion share buyback announced — management authorized a sizable repurchase program that should support EPS and reduce float over time. Reddit Reports Fourth Quarter and Full Year 2025 Results; Announces $1 Billion Share Repurchase Program
• Positive Sentiment: Analysts reacting — several firms raised price targets and reaffirmed buy ratings after the quarter, signaling continued bullish institutional views. These Analysts Revise Their Forecasts On Reddit Following Q4 Results
• Neutral Sentiment: AI and product roadmap could drive longer-term ad monetization — management highlighted AI search and ad tools as growth drivers, but monetization timelines remain multi-quarter. Reddit looks to AI search as its next big opportunity
• Neutral Sentiment: M&A appetite announced — Reddit told analysts it’s scouting adtech and other buys that either scale across Reddit or grow users; strategic but uncertain near-term impact. Reddit says it’s looking for more acquisitions in adtech and elsewhere
• Negative Sentiment: CEO insider selling reported — recent disclosure of a multi-million-dollar sale by the CEO has been cited as a near-term selling catalyst. Insider Selling: Reddit (NYSE:RDDT) CEO Sells $3,297,240.00 in Stock
• Negative Sentiment: Transparency change: company plans to stop disclosing logged‑in vs. logged‑out user counts in 2026 — investors may view that as reduced visibility into engagement trends. Reddit (RDDT) plans to stop disclosing logged-in and logged-out user numbers in 2026
• Negative Sentiment: Valuation and profit-taking — after the post-earnings jump, some investors appear to be locking in gains amid divergent DCF/valuation views and very high intraday volume, pressuring the share price. Reddit (RDDT) Valuation Check As Shares Lag And DCF Views Sharply Diverge

Insider Buying and Selling

In related news, insider Benjamin Seong Lee sold 3,320 shares of Reddit stock in a transaction 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 sale, the insider owned 62,608 shares in the company, valued at $16,291,853.76. The trade was a 5.04% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this link. Also, COO Jennifer L. Wong sold 27,159 shares of the company’s stock in a transaction on Tuesday, January 20th. The stock was sold at an average price of $225.73, for a total transaction of $6,130,601.07. Following the completion of the transaction, the chief operating officer owned 1,157,369 shares of the company’s stock, valued at $261,252,904.37. This trade represents a 2.29% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 523,511 shares of company stock valued at $114,237,285 over the last three months. Insiders own 34.25% of the company’s stock.

Hedge Funds Weigh In On Reddit

Several large investors have recently made changes to their positions in the business. CIBC Bancorp USA Inc. purchased a new stake in Reddit during the 3rd quarter valued at $857,000. Wilmington Savings Fund Society FSB lifted its stake in Reddit by 22.0% during the 3rd quarter. Wilmington Savings Fund Society FSB now owns 1,850 shares of the company’s stock valued at $425,000 after acquiring an additional 333 shares during the period. Captrust Financial Advisors boosted its holdings in shares of Reddit by 32.4% during the 3rd quarter. Captrust Financial Advisors now owns 8,075 shares of the company’s stock valued at $1,857,000 after acquiring an additional 1,976 shares during the last quarter. Danske Bank A S bought a new stake in shares of Reddit in the third quarter worth approximately $10,741,000. Finally, Advisory Services Network LLC raised its holdings in shares of Reddit by 192.1% during the third quarter. Advisory Services Network LLC now owns 15,516 shares of the company’s stock valued at $3,569,000 after purchasing an additional 10,204 shares during the last quarter.

Analysts Set New Price Targets

RDDT has been the subject of several research reports. Guggenheim upped their target price on shares of Reddit from $245.00 to $255.00 and gave the stock a “buy” rating in a research report on Friday. Truist Financial upped their price objective on Reddit from $270.00 to $275.00 and gave the stock a “buy” rating in a report on Friday. Cantor Fitzgerald decreased their price objective on Reddit from $240.00 to $170.00 and set a “neutral” rating on the stock in a report on Friday. Evercore reiterated an “outperform” rating and set a $290.00 price target on shares of Reddit in a research report on Friday. Finally, Oppenheimer lowered their price objective on shares of Reddit from $300.00 to $250.00 and set an “outperform” rating for the company in a report on Friday. One equities research analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, eleven have given a Hold rating and one has given a Sell rating to the company. According to MarketBeat, Reddit presently has an average rating of “Moderate Buy” and a consensus target price of $241.31.

Reddit Company Profile

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.