NEW YORK, July 30, 2026, 5:07 p.m. EDT — With regular U.S. trading closed, after-hours activity continued.
- After the close, Reddit’s stock dropped 9.3% to $161.55. The shares previously ended the session at $178.04.
- Revenue increased by 61% to reach $805 million. The third-quarter midpoint suggests about 48% growth.
- An initial estimate indicates that increased monetization accounted for approximately 65% of revenue growth in the quarter.
Shares of Reddit Inc. NYSE:RDDT fell 9.3% in after-hours trade on Thursday, despite the company reporting earnings that topped expectations and providing upbeat guidance for the third quarter.
The results highlighted an increasing divide between user engagement and revenue generation. U.S. daily active uniques (DAUq) fell compared to the prior period, yet average revenue per user saw a sharp increase.
The midpoint for the third quarter suggests year-over-year revenue growth of about 47.9%, marking an end to Reddit’s streak of eight quarters with growth exceeding 60%.
| Q2 results | Q2 2026 | Q2 2025 | Difference |
|---|---|---|---|
| Total revenue | $804.9 million | $499.6 million | +61% |
| Net earnings | $252.8 million | $89.3 million | +183% |
| 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% |
Adjusted EBITDA and free cash flow are non-GAAP metrics that are defined by the company.
Revenue for the second quarter surpassed analyst expectations by $74.5 million, a rise of 10.2%. Advertising sales increased by 64% to reach $762 million, accounting for almost 95% of overall revenue.
Both prices and ad impressions rose. Diluted earnings were $1.25, compared to $0.45 in the same period last year.
| Operating metric | Q2 2026 | Year-on-year | Q1 2026 | Sequential change |
|---|---|---|---|---|
| Global DAUq | 130.3 million | +18% | 126.8 million | +2.8% |
| U.S. DAUq | 53.2 million | +6% | 53.5 million | -0.6% |
| International DAUq | 77.1 million | +28% | 73.3 million | +5.2% |
| Global ARPU | $6.18 | +36% | $5.23 | +18.2% |
| U.S. ARPU | $11.85 | +51% | $9.63 | +23.1% |
| International ARPU | $2.26 | +31% | $2.02 | +11.9% |
ARPU stands for average revenue per user. Sequential differences are based on rounded numbers from the company.
The sequential comparison showed a notable contrast. Global revenue climbed by 21.3%, while global DAUq saw a rise of just 2.8%.
U.S. DAUq declined by 300,000 compared to the previous quarter, while international DAUq increased by 3.8 million, resulting in overall global growth.
| Initial global revenue growth breakdown | Estimated contribution | Percentage |
|---|---|---|
| Growth in audience | $106.6 million | 35% |
| Increase in ARPU | $198.6 million | 65% |
| Sum of identified growth | $305.1 million | 100% |
This estimate applies a symmetric two-factor breakdown for DAUq and ARPU. Due to rounding of the inputs, there is a $0.2 million variance from the actual $305.3 million rise in reported revenue.
The initial assessment indicates a quarter driven by monetization. This momentum also increases exposure to fluctuations in ad pricing and campaign demand.
Chief Operating Officer Jen Wong reported a 70% year-on-year increase in the number of advertisers. “We continue to onboard a lot more new advertisers onto Reddit,” she said. Reuters
Chief Executive Steve Huffman noted that search referrals had been “choppy” and that traffic had become more unpredictable. However, he stated that the commercial side of the business was still performing well. Reuters
| Q3 company estimates — preliminary | Company range | Midpoint | Analyst consensus or comparison | Midpoint reading |
|---|---|---|---|---|
| Revenue | $860 million-$870 million | $865 million | $829.1 million | Exceeds consensus by 4.3% |
| Adjusted EBITDA | $385 million-$395 million | $390 million | $369 million | Beats consensus by 5.7% |
| Revenue growth | 47.0%-48.7% | 47.9% | Q2 growth: 61% | Growth slows sharply |
| Adjusted EBITDA margin | — | 45.1% | Q2 margin: 42.6% | Sequential rise of 2.5 points |
Guidance reflects management expectations and is not assured. There is no GAAP reconciliation for forward adjusted EBITDA due to uncertainties in reconciling items.
The margin guide provides a balancing perspective. Adjusted EBITDA margin stands at 45.1% at the midpoint, representing a sequential increase of 2.5 percentage points.
Outside pressure continues to be significant. Alphabet’s NASDAQ:GOOGL Google is able to shift referral patterns by adjusting its search algorithms. Meanwhile, Meta Platforms NASDAQ:META is introducing new community-focused offerings.
Key risks include reliance on search, softer U.S. traffic, and ad-cycle fluctuations. After-hours trading volumes are limited and could shift ahead of Friday’s opening bell.
The investor focus is now clearer. Can Reddit maintain premium monetization as traffic gains level off? The Q3 guidance points to margins potentially offsetting the slowdown. The market response indicates investors expect both.
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