NEW YORK, July 31, 2026, 19:07 EDT
- Reddit ended the session at $140.67, a decline of 20.99%; shares were quoted around $139.90 in after-hours trading.
- International daily active uniques increased by 3.8 million from the previous quarter, while U.S. user numbers declined by 300,000.
- Analytical estimate: Roughly 70% of yearly revenue growth was driven by increased revenue per user.
Shares of Reddit, Inc. NYSE:RDDT fell by 20% on Friday, even as the company surpassed revenue and earnings expectations. U.S. markets had already settled before the cut-off time. For the week, the stock declined 16.6%.
| Market measure | Latest | Comparison |
|---|---|---|
| Regular close | $140.67 | Fell 20.99% Friday |
| After-hours quote, 19:00 EDT | $139.90 | Off 0.55% |
| Five-session change | -16.6% | From July 24 to July 31 |
| Friday volume | 29.9 million | Traded at 6.8 times typical volume |
| Q2 buyback average | $157.57 | Friday’s close 10.7% below |
Data and calculations are derived from publicly available market information and official company statements.
The focus of market worry was not the income statement, but the location of user expansion. U.S. users generate a much higher average revenue per user, known as ARPU.
Daily active uniques, referred to as DAUq, rose by 3.5 million compared with the first quarter. International DAUq climbed by 3.8 million, while U.S. DAUq fell by 300,000. As a result, international markets accounted for 109% of the net increase, with the percentage exceeding 100% due to the decline in U.S. users.
| DAUq and monetization | Q1 2026 | Q2 2026 | Sequential change | Q2 ARPU |
|---|---|---|---|---|
| Global | 126.8 million | 130.3 million | +3.5 million | $6.18 |
| United States | 53.5 million | 53.2 million | -0.3 million | $11.85 |
| International | 73.3 million | 77.1 million | +3.8 million | $2.26 |
Announced quarterly operational figures.
Each international user contributed 19 cents for every dollar of U.S. ARPU. The difference remained substantial, even as international ARPU increased by 31%. International revenue climbed 84%, while U.S. revenue advanced 56%.
Analytical estimate: The revenue rise was primarily fueled by improved monetization rather than user expansion. Applying a user-first framework, around $215 million is linked to increased ARPU, while new users accounted for approximately $90 million.
| Year-over-year revenue bridge | Approximate contribution | Share of modeled increase |
|---|---|---|
| Increase in user numbers at last year’s ARPU | $90 million | 29.5% |
| Growth in ARPU for Q2 users | $215 million | 70.5% |
| Combined modeled growth | $305 million | 100.0% |
Estimates are based on rounded DAUq and ARPU figures as reported. Calculations provide approximate results.
Reliance on search drove the soft U.S. results. CEO Steve Huffman stated referrals were “choppy” and traffic “more volatile later in the quarter.” COO Jen Wong noted that algorithm modifications “more than offset” acquisition initiatives. Reuters
Reddit’s commercial operations remained robust. Advertising revenue climbed 64% to $762 million, accounting for 94.7% of overall sales. The number of advertisers grew by 70%, with smaller and international clients making the largest contribution.
Profit growth outpaced revenue. Net margin increased by 13.5 percentage points. Adjusted EBITDA margin rose 9.2 points, and free cash flow climbed to $261 million.
| Q2 operating measure | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $804.9 million | $499.6 million | +61% |
| Net income | $252.8 million | $89.3 million | +183% |
| Net margin | 31.4% | 17.9% | +13.5 points |
| Adjusted EBITDA | $343 million | $167 million | +106% |
| Adjusted EBITDA margin | 42.6% | 33.4% | +9.2 points |
| Free cash flow | $261 million | $111 million | +135% |
Results as disclosed by the company; adjusted EBITDA and free cash flow refer to non-GAAP metrics.
The management’s outlook for the third quarter surpassed market expectations. The revenue midpoint is 4.3% above the consensus estimate from analysts, while the midpoint for adjusted EBITDA is 5.7% higher. This midpoint suggests an adjusted EBITDA margin of approximately 45.1%.
| Q3 measure | Q2 actual | Company estimate midpoint | Analyst consensus estimate | Midpoint comparison |
|---|---|---|---|---|
| Revenue | $804.9 million | $865 million | $829.1 million | 4.3% higher than consensus |
| Adjusted EBITDA | $343 million | $390 million | $369 million | 5.7% ahead of consensus |
| Adjusted EBITDA margin | 42.6% | 45.1% | — | 2.5 percentage points above Q2 |
Calculation based on the midpoint of company-provided guidance.
Evercore Inc. NYSE:EVR analyst Mark Mahaney described the profit-and-loss figures as “very strong.” However, he noted that U.S. daily user numbers “came in light.” Friday’s closing price stood 10.7% under Reddit’s average share buyback price for Q2. Investor’s Business Daily
Risks: Adjustments to Alphabet Inc. NASDAQ:GOOGL search may continue to reduce referral traffic. Meta Platforms Inc. NASDAQ:META is increasing investment in community-based products. Additionally, weaker growth in overseas markets may limit the impact of new user additions.
Next week features two peer reviews. Snap Inc. NYSE:SNAP is scheduled to release results on Monday, August 3. Pinterest, Inc. NYSE:PINS will report after the market closes on Tuesday. The companies’ advertising and user metrics will indicate if Reddit’s decline was unique to the firm.
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