Reddit (NYSE:RDDT) Releases Quarterly Earnings Results, Beats Estimates By $0.39 EPS

Reddit (NYSE:RDDT) issued its quarterly earnings data on Thursday. The company reported $1.01 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.62 by $0.39, FiscalAI reports. The business had revenue of $663.41 million during the quarter, compared to analyst estimates of $607.74 million. Reddit had a return on equity of 20.89% and a net margin of 24.05%.Reddit’s quarterly revenue was up 69.1% compared to the same quarter last year. During the same period in the previous year, the firm earned $0.13 EPS.

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

• Q1 revenue reached $663 million (+69% YoY) with ad revenue of $625 million (+74% YoY); the company reported >90% gross margins, a 40% adjusted EBITDA margin, record cash flow >$300M and GAAP EPS of $1.01—its seventh consecutive quarter of >60% revenue growth.
• Reddit says it has nearly 500 million weekly users (200M in the U.S.) and is targeting 100 million daily U.S. users, while investing heavily in feed, ML, onboarding and performance to lift frequency and retention, but acknowledges engagement still needs improvement.
• Commercial momentum includes strong early adoption of Reddit Max (beta) with reported ~17% lower CPA and 25% more conversions, active advertisers up >75% YoY, and commerce products (DPAs, Shopify integration) delivering materially higher ROAS for advertisers.
• Reddit framed its two-decades of community conversation as a strategic asset for AI (partnerships with Google/OpenAI), but provided limited detail on current AI licensing economics or exclusivity, leaving the magnitude of near-term AI monetization unclear.

Reddit Trading Up 13.1%

Shares of Reddit stock traded up $19.30 on Friday, reaching $166.53. 14,146,564 shares of the company were exchanged, compared to its average volume of 5,296,557. Reddit has a one year low of $94.89 and a one year high of $282.95. The company has a market capitalization of $31.81 billion, a price-to-earnings ratio of 63.56, a PEG ratio of 1.07 and a beta of 2.40. The company has a 50-day moving average of $144.12 and a 200 day moving average of $184.31.

Insider Buying and Selling

In related news, Director Sarah E. Farrell acquired 10,500 shares of the company’s stock in a transaction dated Friday, March 13th. The shares were bought at an average price of $132.26 per share, for a total transaction of $1,388,730.00. Following the purchase, the director directly owned 61,000 shares in the company, valued at approximately $8,067,860. This trade represents a 20.79% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, COO Jennifer L. Wong sold 39,167 shares of the company’s stock in a transaction that occurred on Thursday, April 16th. The stock was sold at an average price of $161.47, for a total value of $6,324,295.49. Following the sale, the chief operating officer owned 1,088,451 shares in the company, valued at approximately $175,752,182.97. This represents a 3.47% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last quarter, insiders have purchased 61,000 shares of company stock worth $8,870,815 and have sold 280,441 shares worth $40,873,759. Corporate insiders own 34.25% of the company’s stock.

Institutional Investors Weigh In On Reddit

A number of institutional investors and hedge funds have recently made changes to their positions in RDDT. Invesco Ltd. raised its stake in shares of Reddit by 419.0% during the 3rd quarter. Invesco Ltd. now owns 1,487,941 shares of the company’s stock worth $342,212,000 after purchasing an additional 1,201,237 shares in the last quarter. State Street Corp increased its holdings in shares of Reddit by 138.5% during the 2nd quarter. State Street Corp now owns 2,030,139 shares of the company’s stock worth $305,678,000 after acquiring an additional 1,178,890 shares during the last quarter. Wellington Management Group LLP increased its holdings in shares of Reddit by 125.4% during the 4th quarter. Wellington Management Group LLP now owns 1,224,045 shares of the company’s stock worth $281,371,000 after acquiring an additional 681,076 shares during the last quarter. AQR Capital Management LLC acquired a new position in shares of Reddit during the 2nd quarter worth approximately $80,052,000. Finally, Bank of America Corp DE increased its holdings in shares of Reddit by 38.4% during the 3rd quarter. Bank of America Corp DE now owns 1,724,560 shares of the company’s stock worth $396,632,000 after acquiring an additional 478,095 shares during the last quarter.

Wall Street Analyst Weigh In

Several equities research analysts have commented on RDDT shares. Wall Street Zen cut Reddit from a “buy” rating to a “hold” rating in a research note on Wednesday, April 8th. Raymond James Financial set a $180.00 target price on Reddit in a research note on Friday. Roth Mkm boosted their target price on Reddit from $210.00 to $215.00 and gave the company a “neutral” rating in a research note on Friday, January 30th. Deutsche Bank Aktiengesellschaft restated a “buy” rating and issued a $285.00 target price on shares of Reddit in a research note on Tuesday, January 20th. Finally, Cantor Fitzgerald boosted their target price on Reddit from $170.00 to $180.00 and gave the company a “neutral” rating in a research note on Friday. One research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and eleven have given a Hold rating to the stock. According to MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $228.61.

Key Stories Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q1 earnings and revenue beat — Reddit reported EPS of $1.01 (vs. ~$0.62 est.) and revenue of about $663M, a ~69% year‑over‑year jump; ad revenue rose sharply, underscoring improving monetization. Zacks: Reddit Q1 Earnings Beat
• Positive Sentiment: Upbeat near-term guidance — management gave Q2 revenue guidance (~$715M–$725M) above Street expectations, signaling continued ad demand momentum. Reuters: Reddit expects revenue above estimates
• Positive Sentiment: AI-driven ad products & search improvements gaining traction — exec commentary and coverage point to rising advertiser adoption of lower‑funnel, AI-enhanced ad tools and a ~30% YoY increase in weekly search usage, both supporting higher yield per user. Reuters: AI-driven ad growth fuels outlook TechCrunch: People are finally using Reddit’s search
• Positive Sentiment: Analyst support — several firms reaffirmed or raised targets (e.g., Piper Sandler raised its PT to $215; Needham reaffirmed buy with $300 PT; DA Davidson reaffirmed buy at $200), adding buy‑side validation. TickerReport / coverage on Piper Sandler
• Neutral Sentiment: Unusual options activity — traders purchased ~80,316 call options (about +88% vs. typical daily call volume), indicating speculative bullish positioning but not guaranteeing directional follow‑through.
• Neutral Sentiment: Cantor Fitzgerald raised its price target (to $180) but left a neutral rating — a mixed signal: higher target but not a bullish rating change. Benzinga: Cantor Fitzgerald update
• Negative Sentiment: Some analyst conflict and target trimming — Citizens Jmp reduced its target from $250 to $240 (still bullish stance), reflecting differing views on longer‑term upside and leaving room for skepticism about sustainability. Benzinga: Citizens Jmp update

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.