Can Reddit's International Expansion Drive More Upside in the Stock?

Reddit’s RDDT international momentum is emerging as a key growth catalyst, with the company executing a multi-pronged expansion strategy across languages, regions and advertiser access. In the second quarter of 2025, international Daily Active Uniques (DAUq) jumped 32% year over year to 60.1 million, outpacing the 11% growth in the United States. DAUq. International revenues surged 71.7% to $91 million, yet contributed just 18% to total revenue, despite over half of Reddit’s audience now being based outside the United States. This imbalance presents a clear opportunity for revenue acceleration as adoption deepens across emerging geographies.

Reddit’s machine translation now supports 23 languages and is expected to continue reducing friction for users in non-English-speaking regions while preserving the platform’s community-driven model. Priority markets like France, Spain and Brazil, which drove over half of the recent quarter’s international DAUq growth, are likely to benefit further from localized onboarding, targeted community-building and expanded moderator support.

As of the second quarter, Reddit’s international Average Revenue Per User (ARPU) stood at $1.73, significantly below the U.S. ARPU of $7.87, suggesting a long runway for revenue growth. Reddit plans to increase global marketing spend through the second half of 2025 to support brand awareness and user acquisition across priority markets.

The Zacks Consensus Estimate for third-quarter international revenues is pegged at $106.6 million. The consensus mark for International DAUq is pegged at 62 million, while the consensus mark for Weekly Active Uniques (WAUq) is pegged at 244.1 million, suggesting continued momentum. As Reddit scales its global reach, international markets are expected to contribute more meaningfully to overall revenue growth.

RDDT Faces Stiff Competition

Reddit’s international expansion competes with Meta Platforms META and Snap SNAP, which follow different global strategies. Meta Platforms scales through WhatsApp and Instagram, using visual content to bypass language barriers. Snap emphasizes AR and localized content to engage younger users, especially in Europe and India.

While both Meta Platforms and Snap face cultural adaptation challenges, Reddit’s discussion-driven model may gain an edge in markets where community knowledge-sharing and topical depth matter more than curated visuals.

Reddit’s Share Price Performance, Valuation and Estimates

Reddit shares have jumped 34.3% year to date, while the broader Zacks Computer & Technology sector and the Internet Software industry increased 12.6% and 18.6%, respectively.

RDDT's YTD Price Performance

Reddit stock is trading at a premium, with a forward 12-month Price/Sales of 16.51X compared with the industry’s 5.64X. RDDT has a Value Score of F.

RDDT's Valuation

The Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at 49 cents per share, up by 17 cents over the past 30 days, implying a significant improvement from the year-ago quarter’s earnings of 16 cents per share.

Reddit Inc. Price and Consensus

Reddit Inc. price-consensus-chart | Reddit Inc. Quote

Reddit currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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