Reddit Expands Ad Platform With New Suite: Can the Launch Pay Off?

Reddit RDDT continues to scale its advertising business by turning real-time community engagement into a source of strategic insights for brands. As advertisers seek platforms that combine scale with authenticity, Reddit’s community-led model is gaining momentum across performance and brand campaigns.

RDDT recently launched Community Intelligence, a new suite designed to help marketers monitor live conversations across subreddits, extract trend signals and optimize campaign decisions. The toolset enables advertisers to analyze sentiment, product mentions and emerging topics in real-time, thereby transforming Reddit’s open-conversation network into a dynamic planning engine. The new suite builds on Reddit Pro and supports full-funnel execution — from awareness to conversion. With Community Intelligence, Reddit positions itself as a platform that turns live user experiences into actionable insights, enabling brands to track cultural relevance and act on user-driven demand patterns.

User engagement continues to strengthen on Reddit, acting as a key catalyst for its advertising growth. In the first quarter of 2025, Weekly Active Users reached 401 million, while Daily Active Uniques hit 108 million — both up 31% year over year. The platform’s community-led discussions and open-web visibility are attracting users seeking authentic, experience-driven content across diverse topics.

The growing engagement is driving strong advertiser adoption. In the first quarter of 2025, Reddit reported advertising revenue of $358.6 million — up 61% year over year — and beat the Zacks Consensus Estimate by 5.9%. Performance campaigns accounted for 60% of total ad spend, reflecting growing traction among mid- and lower-funnel advertisers.

As marketers invest in context-aware tools to navigate shifting consumer behavior, Reddit expects Community Intelligence to deepen advertiser traction and support recurring ad-revenue momentum.

RDDT Faces Stiff Competition

Reddit’s advertising business faces stiff competition from Alphabet GOOGL and Meta Platforms META, both of which are expanding their AI-driven advertising capabilities.

Alphabet is strengthening its lead through Google Ads and YouTube, offering large-scale performance marketing across search and video. Alphabet's ecosystem is deeply integrated with user behavior signals, but it lacks Reddit’s community-led format that enables real-time insight from open discussions.

Meta Platforms continues to strengthen its advertising capabilities across Facebook, Instagram and Reels. With tools like Advantage+ and automated delivery, META Platforms enables personalized ad campaigns for global brands. However, unlike Reddit, Meta Platforms does not surface real-time user discussions that help advertisers track community sentiment and emerging trends.

RDDT’s Share Price Performance, Valuation and Estimates

RDDT shares have plunged 18.1% year to date, while the broader Zacks Computer & Technology sector returned 1.6% and the Zacks Internet - Software industry increased 13%.

RDDT’s Performance

Reddit stock is trading at a premium, with a forward 12-month Price/Sales of 11.8X compared with the Computer and Technology sector’s 6.36X. Reddit has a Value Score of F.

RDDT’s Valuation

The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 19 cents per share, unchanged over the past 30 days, implying an improvement from the year-ago quarter’s loss of 6 cents per share.

Reddit Inc. Price and Consensus

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

The consensus mark for Reddit’s fiscal 2025 earnings is pegged at $1.21 per share, which has remained unchanged over the past 30 days. The figure marks an improvement over fiscal 2024’s loss of $3.33 per share.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research