New York, Feb 6, 2026, 17:57 ET — In after-hours trading
- Reddit shares dropped roughly 7% after hours, following a session marked by sharp swings.
- The company put out a first-quarter revenue outlook that topped expectations, and it’s greenlit a $1 billion share repurchase.
- Ad momentum, user growth, and a renewed effort around AI-driven campaign tools are all in the spotlight for investors right now.
Reddit dropped 7.4% to $139.83 in after-hours trading Friday. Shares were whipsawed, moving between $170.74 and $137.18 through the session. Roughly 22 million shares changed hands.
The two-day roller coaster ended with a drop, after enthusiasm over a fresh buyback plan and optimistic guidance quickly gave way to questions about whether Reddit’s growth goals are ambitious enough—or just “good.”
For investors, it comes down to this: can Reddit convert its user traffic into ad revenue quickly enough to support the lofty valuation it grabbed post-IPO? The real question now is whether future ad growth hinges on better automation rather than hiring more staff.
Reddit logged a 70% surge in fourth-quarter revenue, hitting $726 million as ad revenue soared 75% to $690 million. The company’s daily active uniques, or “DAUq,” climbed 19% to 121.4 million. Net income landed at $252 million. “We’re entering the next era of Reddit,” said co-founder and CEO Steve Huffman. Reddit Investor Relations
Reddit is projecting first-quarter revenue between $595 million and $605 million—comfortably ahead of the $577.2 million Wall Street was looking for, based on LSEG numbers highlighted by Reuters. Adjusted EBITDA guidance also beat the Street, thanks in part to Reddit’s ad platform ramping up its use of AI for building and optimizing campaigns. “Expectations were already high coming into the quarter, but the results still surprised,” Emarketer’s Jeremy Goldman told Reuters. Reuters
Huffman spent part of the earnings call positioning Reddit as a haven away from automated posts, arguing it’s designed for “humans to talk to other humans.” He mentioned ongoing efforts around verified profiles, and said the company intends to introduce both bot verification and labels for AI-generated material. Business Insider
Even so, initial reactions across Wall Street diverged. Truist Securities’ Youssef Squali bumped up his price target, Barron’s said, whereas Cantor Fitzgerald’s Deepak Mathivanan flagged concerns about how quickly users are joining. Barron’s
Reddit’s annual report, filed Feb. 5, bore signatures from that day and detailed results for the fiscal year through Dec. 31, 2025. As of Feb. 4, the filing counted 139.6 million Class A shares and 51.4 million Class B shares outstanding. SEC
Friday ended with the Dow finishing just over 50,000—a first. The S&P 500 and Nasdaq pushed higher too, with money flowing back into heavyweight tech names and chip stocks. Reuters
Reddit bulls face a clear risk: ad demand comes and goes, so any slip in user growth or advertiser budgets can sting a stock that depends on a growth story. Pressure is mounting too, with larger competitors rolling out lookalike automated ad products. And “AI”? It’s a double-edged sword for platforms built on user content.
All eyes now turn to Monday, Feb. 9, as traders look to see if Friday’s late drop spills into the new session. Attention could swing either way: new analyst notes may push the spotlight back onto guidance or redirect it to user growth.
