NEW YORK, Feb 5, 2026, 16:56 EST
- Projects Q1 revenue between $595 million and $605 million; anticipates adjusted EBITDA in the range of $210 million to $220 million
- Revenue for Q4 surged 70% to $726 million, led by a 75% increase in ad revenue, which hit $690 million
- The board approved its inaugural share buyback plan, authorizing repurchases up to $1 billion
Reddit projected first-quarter revenue beyond Wall Street estimates and greenlit a $1 billion share repurchase on Thursday, counting on a robust holiday-quarter boost in advertising.
The buyback comes from a company that went public in 2024 and is still showing it can convert online buzz into steady revenue. Marketers are cutting budgets in certain spots while demanding ads that produce clear, trackable outcomes.
Reddit’s strategy is straightforward: maintain “human” conversations and monetize its audience without morphing into just another feed.
Reddit’s fourth-quarter revenue jumped 70% to $726 million, fueled by a 75% increase in ad revenue, which hit $690 million. Diluted earnings per share came in at $1.24. The company reported a net income of $252 million and adjusted EBITDA of $327 million, excluding costs like interest and stock-based compensation. CEO Steve Huffman described this as “the next era” for Reddit, highlighting improved execution as the board approved a share buyback program worth up to $1 billion. (Business Wire)
Reddit’s daily active uniques (DAUq) — the number of distinct users opening the app or visiting the site daily — hit an average of 121.4 million this quarter, a 19% jump. Weekly active users climbed 24% to 471.6 million. The company also reported a 42% surge in average revenue per unique user, reaching $5.98, driven by faster growth outside the U.S. CEO Huffman described Reddit as “the most human place on the internet” and revealed plans to introduce bot verification and labeling, following the launch of verified profiles this quarter. (Q4 Capital)
Reddit is pushing new AI tools to advertisers, including features that create Reddit-style ad copy and automatically resize images for its ad slots. It’s also trialing “Max” campaigns that handle bidding and creative decisions on autopilot. According to LSEG data, Reddit’s Q1 revenue forecast came in above consensus, while its Q4 results beat estimates, intensifying its fight for ad dollars against rivals like Meta. “Expectations were already high coming into the quarter, but the results still surprised,” noted Jeremy Goldman, senior director at Emarketer. (Reuters)
The company’s pitch to brands centers on ad placement. Reddit offers spots within discussion threads, allowing marketers to position their ads alongside conversations in niche communities where users exchange advice and recommendations.
A buyback lowers the number of shares outstanding, helping to support earnings per share. However, it also uses up cash that might otherwise go toward product development, safety and moderation efforts, or acquisitions.
The program remains optional, with Reddit reserving the right to pause or halt repurchases whenever it chooses. A sharp drop in ad spending, increased pressure from rival automated ad platforms, or slowing user growth could quickly challenge the current optimistic outlook.
Since its New York debut, Reddit’s stock has swung sharply as investors wrestle with how sustainable its traffic really is versus how much relies on fickle search and social trends. The company has bet heavily on authenticity, pitching it as a key advantage in a digital world increasingly crowded with machine-generated content.
Investors are watching to see if Reddit can sustain growing ad demand as it pushes beyond the U.S. At the same time, its automation tools face a test: can they attract budget from bigger competitors without undermining the platform’s core appeal?
