Reddit delivered quarterly results that exceeded Wall Street’s expectations, with the market responding positively to broad-based revenue growth and improving profitability. Management attributed the outperformance to ongoing investments in machine learning-driven ad formats and product enhancements, particularly around user onboarding and search integration. CEO Steven Huffman emphasized that “streamlining onboarding does improve retention,” and credited improved feed relevancy and search capabilities for driving user engagement and monetization. COO Jennifer Wong highlighted that the advertising business saw substantial gains across all verticals, with performance ads and shopping formats contributing meaningfully to growth.
Is now the time to buy RDDT? Find out in our full research report (it’s free).
Reddit (RDDT) Q4 CY2025 Highlights:
- Revenue: $725.6 million vs analyst estimates of $667.5 million (69.7% year-on-year growth, 8.7% beat)
- EPS (GAAP): $1.24 vs analyst estimates of $0.93 (33.1% beat)
- Adjusted EBITDA: $327 million vs analyst estimates of $286.5 million (45.1% margin, 14.1% beat)
- Revenue Guidance for Q1 CY2026 is $600 million at the midpoint, above analyst estimates of $575.2 million
- EBITDA guidance for Q1 CY2026 is $215 million at the midpoint, above analyst estimates of $204.9 million
- Operating Margin: 31.9%, up from 12.4% in the same quarter last year
- Domestic Daily Active Visitors: 52.5 million, up 4.5 million year on year
- Market Capitalization: $26.61 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Reddit’s Q4 Earnings Call
- Ron Josey (Citi) inquired about early results from revamped onboarding and integrated search; CEO Steven Huffman described improvements in retention and shared that unified search drove substantial query growth, while COO Jennifer Wong outlined ongoing conversion of advertisers to Reddit Max, noting productivity and performance gains are expected as adoption scales.
- Benjamin Black (Deutsche Bank) asked about the impact of AI-generated content on engagement and the potential for agentic commerce; Huffman responded that transparency and labeling AI-generated interactions is critical, while Wong emphasized Reddit’s strength in trusted recommendations for high-intent shopping decisions.
- Thomas Champion (Piper Sandler) questioned monetization prospects for logged-out users and the removal of reporting distinctions; Wong explained that ad value per impression is similar regardless of login status, with increased engagement seen as the primary driver for greater monetization.
- Justin Post (Bank of America) pressed for details on AI partnerships with Google and OpenAI, as well as bot-related user impacts; Huffman said these partnerships are evolving into deeper product collaborations, and reiterated that the company’s approach to labeling and removing bots remains vigilant to preserve user trust.
- Josh Beck (Raymond James) explored headroom in large advertiser wallet share and asked about quarterly outlook assumptions; Wong noted substantial opportunity to deepen relationships with enterprise clients across brands and geographies, while Vollero confirmed that guidance reflects similar momentum and seasonality patterns as prior quarters.
Catalysts in Upcoming Quarters
Looking ahead, our analysts will watch (1) the pace of adoption for AI-powered ad tools like Reddit Max and new shopping ad formats; (2) continued integration of search and user personalization features to drive engagement and retention; and (3) the effectiveness of the company’s capital allocation strategy, including the impact of the $1 billion share repurchase program. Monitoring how Reddit navigates the challenges of AI-generated content and scales its advertiser ecosystem will also be critical to assessing future performance.
Reddit currently trades at $139.31, down from $151.05 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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