Reddit (NYSE:RDDT) Posts Earnings Results, Beats Estimates By $0.28 EPS

Reddit (NYSE:RDDT) posted its earnings results on Thursday. The company reported $1.24 earnings per share for the quarter, beating analysts’ consensus estimates 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 business had revenue of $725.61 million for the quarter, compared to analysts’ expectations of $665.80 million. During the same quarter in the previous year, the firm posted $0.36 earnings per share. The firm’s revenue for the quarter 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 Stock Down 1.8%

Shares of NYSE:RDDT traded down $2.78 during midday trading on Friday, reaching $148.27. 8,635,537 shares of the company were exchanged, compared to its average volume of 5,124,364. The stock has a fifty day simple moving average of $222.78 and a two-hundred day simple moving average of $214.72. Reddit has a fifty-two week low of $79.75 and a fifty-two week high of $282.95. The firm has a market cap of $28.10 billion, a PE ratio of 85.14, a P/E/G ratio of 1.06 and a beta of 2.17.

Insider Buying and Selling at Reddit

In other news, CTO Christopher Brian Slowe sold 24,000 shares of the firm’s stock in a transaction dated Monday, November 24th. The stock was sold at an average price of $192.72, for a total value of $4,625,280.00. Following the completion of the transaction, the chief technology officer directly owned 175,694 shares in the company, valued at $33,859,747.68. This trade represents a 12.02% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. Also, COO Jennifer L. Wong sold 63,427 shares of the company’s stock in a transaction on Monday, November 24th. The stock was sold at an average price of $192.72, for a total transaction of $12,223,651.44. Following the transaction, the chief operating officer owned 1,184,528 shares of the company’s stock, valued at $228,282,236.16. This represents a 5.08% 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 valued at $114,237,285 over the last ninety days. 34.25% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Reddit

A number of hedge funds have recently made changes to their positions in RDDT. CIBC Bancorp USA Inc. purchased a new position in Reddit during the third quarter worth $857,000. Wilmington Savings Fund Society FSB increased its stake in shares of 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 last quarter. Captrust Financial Advisors lifted 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 worth $1,857,000 after acquiring an additional 1,976 shares during the period. Danske Bank A S purchased a new stake in Reddit in the third quarter valued at approximately $10,741,000. Finally, Advisory Services Network LLC lifted its holdings in shares of Reddit by 192.1% during the 3rd quarter. Advisory Services Network LLC now owns 15,516 shares of the company’s stock valued at $3,569,000 after acquiring an additional 10,204 shares in the last quarter.

Analysts Set New Price Targets

Several brokerages have recently commented on RDDT. Oppenheimer restated an “outperform” rating and issued a $250.00 target price on shares of Reddit in a research note on Friday. Raymond James Financial reaffirmed a “strong-buy” rating and set a $250.00 price objective (up previously from $225.00) on shares of Reddit in a report on Monday, October 20th. Morgan Stanley set a $240.00 target price on shares of Reddit in a research note on Friday. JPMorgan Chase & Co. increased their price target on Reddit from $190.00 to $227.00 and gave the stock a “neutral” rating in a research report on Friday, October 31st. Finally, Evercore ISI reiterated an “outperform” rating and issued a $290.00 price objective on shares of Reddit in a research report on Friday. One research analyst has rated the stock with a Strong Buy rating, seventeen have given a Buy rating, eleven have issued a Hold rating and one has given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus target price of $235.54.

Key Headlines Impacting Reddit

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q4 beat and strong guidance — Reddit reported Q4 EPS and revenue well above estimates, posted materially higher profits and gave Q1 revenue guidance above Street expectations; management highlighted AI tools boosting ad monetization. Reuters: Reddit forecasts revenue above estimates as AI fuels ad sales
• Positive Sentiment: $1 billion buyback announced — Board approved a $1B share repurchase program, which reduces float and can support EPS and the stock price over time. BusinessWire: Reddit announces $1B repurchase program
• Positive Sentiment: Analyst upgrades and higher price targets — Needham reaffirmed a buy and set a $300 PT; B. Riley raised its PT to $250 and keeps a buy rating, signaling strong sell‑side conviction after the quarter. Benzinga: Needham reaffirms buy TickerReport: B. Riley raises price target
• Positive Sentiment: Longer-term product tailwinds — Management flagged AI-powered search and integrated AI features as a new monetization avenue, which investors see as expanding TAM and advertiser demand. TechCrunch: Reddit looks to AI search
• Neutral Sentiment: Valuation debate persists — Several pieces note divergent DCF views and that shares still trade at a high multiple, underscoring differing analyst assumptions about growth and margins. Yahoo Finance: Valuation check
• Neutral Sentiment: Metrics disclosure change — Reddit plans to stop reporting logged‑in vs logged‑out user counts in 2026; that reduces one public engagement metric and may make future user-trend analysis harder. Shacknews: Reddit discontinues logged-in vs logged-out reporting
• Negative Sentiment: Insider selling pressure — CEO stock sales (~$3.3M) were reported and have been cited as a reason for intraday weakness and recent share pulls, drawing investor attention and short‑term selling. AmericanBankingNews: Insider selling
• Negative Sentiment: Short-term pullback coverage — Some outlets highlighted a pullback ahead of earnings driven by the insider sale and volatility, which can amplify short-term downside despite the strong quarter. Schaeffer’s Research: Pullback ahead of earnings

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.