Reddit Q4 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise

Reddit RDDT reported fourth-quarter 2025 earnings of $1.24 per share, which beat the Zacks Consensus Estimate by 29.30%. The company reported earnings of 36 cents per share in the year-ago quarter.

Revenues of $725.6 million surpassed the Zacks Consensus Estimate by 8.71%. The reported figure surged 69.7% year over year.

RDDT shares gained 7.60% in the pre-market trading after the company delivered impressive fourth-quarter results.

RDDT’s Q4 Top-Line & Metrics in Detail

For the reported quarter, U.S. revenues (contributing 80% to revenues) surged 67.8% year over year to $583.3 million. International revenues (20% of revenues) soared 77.9% year over year to $142.3 million.

Reddit Inc. Price, Consensus and EPS Surprise

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

Advertising revenues surged 75% year over year to $690 million, and Other revenues increased 8% year over year to $36 million.

Daily Active Uniques (DAUq) jumped 19% year over year to 121.4 million. U.S. DAUq increased 9% year over year to 52.5 million, whereas International DAUq grew 28% year over year to 68.9 million.

Weekly Active Uniques (WAUq) rose 24% year over year to 471.6 million. U.S. WAUq increased 12% year over year to 193.4 million, whereas International WAUq climbed 34% year over year to 278.2 million.

Average revenue per unique (ARPU) increased 42% year over year to $5.98. U.S. ARPU increased 53% year over year to $10.79, whereas International ARPU climbed 38% on a year-over-year basis to $2.31.

RDDT Operating Details

Reddit reported a GAAP gross margin of 91.9%, contracting 70 bps on a year-over-year basis.

Sales and marketing expenses increased 103.5% year over year to $163.9 million. Research and development expenses rose 5.4% year over year to $198.9 million, while General and Administrative expenses decreased 2% year over year to $72.3 million.

Fourth-quarter 2025 adjusted EBITDA was $327 million, up from $154.3 million reported in the year-ago quarter. In the reported quarter, the adjusted EBITDA margin was 45.1%.

RDDT’s Balance Sheet & Cash Flow

As of Dec. 31, 2025, Reddit had cash and cash equivalents, including marketable securities, of $2.47 billion compared with $2.22 billion as of Sept. 30, 2025.

In the fourth quarter, the company generated $269 million in cash from operating activities compared with $185 million in the previous quarter. Reddit reported a free cash flow of $263.6 million compared with $183 million in the previous quarter.

Reddit Initiates Q1 Guidance

For the first quarter of 2026, RDDT expects revenues between $595 million and $605 million. 

RDDT expects adjusted EBITDA between $210 million and $220 million for the first quarter.

Zacks Rank & Stocks to Consider

Currently, Reddit carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the broader Zacks Computer and Technology sector include Arista Networks ANET, Advanced Energy AEIS, and Amkor Technology AMKR. While Amkor Technology sports a Zacks Rank #1 (Strong Buy), Arista Networks and Advanced Energy carry a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Arista Networks have gained 6.1% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12

Shares of Advanced Energy have surged 82.1% in the trailing six-month period. Advanced Energy is slated to report fourth-quarter 2025 results on Feb. 10.

Amkor Technology shares have surged 97.6% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.

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

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