Reddit's Robust Portfolio Fuels Revenue Growth: What's the Path Ahead?

Reddit RDDT is benefiting from its expanding product portfolio, which has significantly contributed to its impressive revenue growth. In the third quarter of 2025, the company reported revenues of $585 million, marking a 68% year-over-year increase, with advertising revenue increasing 74% to $549 million.

Reddit’s focus on enhancing user engagement has been noteworthy. In the third quarter of 2025, the platform’s user base has grown substantially, with daily active users (DAUs) reaching 116 million and weekly active users (WAUs) reaching 444 million, representing approximately 20% year-over-year increases.  

Reddit is benefiting from its strong focus on enhancing user-friendly features, which is driving significant growth in user engagement and ad revenue. Reddit recently announced the beta launch of Max campaigns. This AI-powered automated ad solution optimizes targeting, creative, placements and budget in real time to improve performance and reduce manual effort. 

Using Reddit Community Intelligence, Max campaigns offer unique audience insights, including Top Audience Personas, which help advertisers understand who engages with their campaigns and what content resonates. Early testers experienced up to 27% more conversions and lower costs, showing both efficiency and effectiveness.

RDDT’s expanding portfolio and rising user engagements are expected to drive the company’s top-line growth. For the fourth quarter of 2025, RDDT expects revenues between $655 million and $665 million, representing 53% to 55% year-over-year revenue growth with a midpoint of about 54%.

RDDT Faces Stiff Competition

RDDT is facing stiff competition from competitors like Pinterest PINS and Snap SNAP, which are also expanding their portfolio into advertising to compete in the rapidly growing digital ad market.

Pinterest is expanding its portfolio through acquisitions. In December 2025, Pinterest announced that it had inked a definitive agreement to acquire tvScientific, a firm specializing in a connected TV advertising platform. The buyout will enable Pinterest to bring its advertising business to TV screens, allowing advertisers to compare the impact of TV ads on their marketing campaigns.

Snap’s expanding portfolio has been noteworthy. In December 2025, Snap announced the launch of the Animate It Lens, which leverages Snap’s internally developed AI video generation model to turn user ideas into short, shareable videos in seconds. The feature is available to Lens+ subscribers.

RDDT’s Share Price Performance, Valuation, and Estimates

RDDT’s shares have gained 67.1% in the trailing six-month period, outperforming the broader Zacks Computer & Technology sector’s return of 19.5%. The company has also outperformed the Internet - Software industry’s decline of 7.6%.

RDDT Stock's Performance

RDDT shares are overvalued, with a forward 12-month Price/Sales of 15.14X compared with the Computer & Technology sector’s 7.47X. RDDT has a Value Score of F.

RDDT's Valuation

The Zacks Consensus Estimate for 2025 earnings is pegged at $2.35 per share, unchanged over the past 30 days. This suggests 170.57% year-over-year growth.

Reddit Inc. Price and Consensus

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

Reddit currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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