Reddit, Inc.
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Item 1. Business
Our Mission
Our mission is to empower communities and make their knowledge accessible to everyone.
We built Reddit with the belief that communities unlock the power of human creativity and create a sense of belonging and empowerment for their members. Our over 100,000 active communities have channeled the power of human creativity to grow Reddit since our founding. We believe the world needs community more than ever, and that this represents our greatest opportunity to further enrich the lives of everyone in the world.
Overview: The Power of Reddit’s Communities
Reddit is a global, digital city where anyone in the world can join a community to learn from one another, engage in authentic conversations, explore passions, research new hobbies, exchange goods and services, create new communities and experiences, share a few laughs, and find belonging. People are diverse and have multiple interests. Just like in a city, where citizens are part of multiple sub-communities, on Reddit, users often belong to multiple communities. At Reddit, users can dive into anything, and if a community does not already exist around a particular topic, they can create one. In the three months ended December 31, 2025, an average of 121.4 million daily active uniques (“DAUq”) around the world came together on Reddit – continuously adding to our longstanding and constantly evolving human archive of information. They come together to share the rhythm of their daily discoveries, ask questions and receive advice, and search for a breadth of perspectives and knowledge not accessible anywhere else. Built on shared interests, passion, and trust, Reddit has a community for everyone.
Communities on Reddit are organized based on specific interests and are called subreddits. Within subreddits, Redditors engage in active and in-depth conversations by sharing experiences, submitting links, uploading images and videos, and replying to one another in comment threads on any topic. Subreddits are denoted by an “r/” before their names: r/ explainlikeimfive helps people learn anything with child-friendly explanations; r/ lgbt helps people find their identity; and r/ BeyondTheBump helps people transition from pregnancy to parenthood. Redditors invest time to shape their communities, share their experiences, send support and supplies when someone is down on their luck, and even code scripts and develop tools to advance their communities.
Similar to how cities are made from cement and steel, but are really built by their citizens, Reddit is made from code and algorithms, but is really built by our users. It is a place where human ingenuity and creativity thrive. We empower users to participate and to shape Reddit by sharing content, upvoting or downvoting, and commenting. In addition, Redditors themselves not only create and build communities, but they also moderate these communities as volunteers to help keep them safe, vibrant, and true to themselves. Like cities, we design tools that give communities what they need to make their communities their own and evolve over time, rebuilding and reshaping by adapting to new technologies and reflecting new cultural trends. Newly created subreddits create a sense of belonging for their members, spurring the creation of more new subreddits to continue the cycle. In this way, Reddit’s community ecosystem grows and expands with the interests and passions of our users, keeping Reddit on trend and resilient to fading fads.
Reddit’s community ecosystem is organically built upon shared interests, passions, and trust rather than friends, celebrities, and their followers. This distinction results in a unique sense of belonging, privacy, and authenticity for our users. We do not require that users disclose their identities on Reddit, freeing them from having to perform and the associated pressures to always appear perfect. As a result, users come to Reddit for fundamentally distinct purposes, with each adding incremental value to our entire community. Redditors are free to be vulnerable or ask questions they would not be able to ask anywhere else.
Powerful Platform Built Around Context and User Interest
As more content online is synthesized, summarized, and sanitized by artificial intelligence (“AI”), Reddit stands out for its honesty and subjectivity. People want multiple viewpoints and lived experiences. This is why Reddit is synonymous with product and service recommendations. For advertisers, we provide access to a unique and highly engaged audience where our trusted, passionate communities drive recommendations on brands and buying decisions. Our users often have high intent – they are searching on Reddit for answers or recommendations that they can trust, and these users can benefit from the conversations and contextual ads that are displayed on Reddit.
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A Valuable Source of Conversational Data and Knowledge
Over time, Reddit has evolved to become one of the internet’s largest corpuses of information, with over two billion posts and over 22 billion comments through December 31, 2025. Platforms like Reddit, where people discuss every aspect of life—from the trivial to the transformative—are the backbone of building AI and training large language models (“LLMs”). That's why Reddit is often cited as one of the most sourced and cited domains in AI across all models. Human conversation is not being replaced by AI; instead, it is becoming more important. AI does not invent knowledge—it learns from us. From real people, sharing real perspectives. You can’t have artificial intelligence without actual intelligence. Furthermore, we use internally built and trained models to improve many aspects of Reddit. For example, Reddit Community Intelligence blends AI-driven efficiency with real user perspectives, enabling product solutions like Reddit Insights, our AI-powered social listening tool, and Conversation Summary Add-ons, which leverages AI to surface positive Reddit conversations directly below ads.
Publishers, Brands, and Companies are Meeting their Audiences on Reddit
As the internet evolves, Reddit communities have continued to provide an essential space for publishers, brands, and companies to connect with their audience and engage in authentic, high-quality conversations. In communities like r/ sonos and r/ fidelityinvestments, companies are providing troubleshooting tips, investment advice, and customer service, and creators and publishers are using our new Ask Me Anything (“AMA”) features to connect with their audience and fans on the platform. We also launched Reddit Pro tools for publishers to help media outlets easily share and track content with users, and early adopters like The Atlantic, The Hill, NBC News, and The Associated Press are able to sync their feeds and automatically import articles, track how their stories are shared, and use AI-powered tools to find the right communities on Reddit. We also rolled out a limited test of verified profiles to help individuals and businesses, who wish to do so, confirm their identifies on Reddit. This feature is designed to help Redditors understand who they are engaging with in moments when verification matters, whether it is an expert or celebrity hosting an AMA, a journalist reporting news, or a brand sharing information.
Why Users Come to Reddit
Conversation and connection are becoming more valuable and rare. In a world increasingly dominated by algorithms and automation, the need for human voices has never been greater. Reddit is what the internet needs most: a place where people can connect on almost any topic and find genuinely useful information.
Open, Growing Archive of Human Knowledge (2005– )
Reddit turned 20 this year. That is two decades of building something special on the internet: a user-powered platform where users bring their honest selves and connect over the topics they care most about—whether popular, niche, or personal. Reddit’s influence and relevance organically grows as users quickly respond to new topics based on real experiences. Topical communities such as r/ law, r /pluribusTV, r/ labubu, r/ kpopdemonhunters, and r/ marvelrivals have had meaningful breakouts as the headlines have evolved. As a result of Reddit’s scale and longevity, our content library is a broad memory of human interest, organically expanding and deepening into more topics. At times, Reddit may be the only place to find the information users are looking for, and users searching for information come to Reddit to discover the conversations taking place there.
Centered on Interests, with Unmatched Breadth and Depth of Human Knowledge
Users come to Reddit to find trusted, human perspectives and participate in communities that share their interests—no matter how niche or mainstream. Time spent on Reddit is guided by personal intention and interests. Breadth of communities and depth of engagement means that Redditors benefit from a trove of knowledge and conversation organized by topic that we believe is unmatched by any other internet platform, covering a wide variety of interests—r/ parenting, r/ NFL, r/ meditation, and r/ solotravel, to name a few.
People-powered Curation for Authentic Interactions and Trusted Content
Our differentiated community approach underlies the interactions on our platform: Reddit is centered around human creativity and belonging. The content found in Reddit communities is curated by people, creating a highly relevant content experience that attracts users to our platform. Every post and comment on Reddit, regardless of the author, starts with one upvote, and must earn its visibility through community members upvoting it and boosting it to the subreddit’s front page. Unlike traditional social media, voting (both up and down) is completely anonymous, encouraging broader Redditor participation. This unique upvoting and downvoting system not only curates the quality and relevance of content, but also determines the prominence of a certain piece of content. We believe community-driven promotion of content leads to greater trust of the content on Reddit.
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Authentic and Trusted Recommendations
Reddit’s community-powered recommendations are a foundational part of why so many users visit Reddit on a daily basis. In a world where consumers are increasingly inundated with product placement and messaging curated by algorithms and automation, people seek answers that only humans can provide. Reddit stands out as a refreshing alternative, offering authentic human recommendations that people can actually trust. We see that trust reflected in the high velocity of people coming to Reddit to find great content and trusted recommendations.
Flexible Canvas for Self- and Community-expression
Every subreddit is a flexible canvas for communities to express themselves through a customizable experience. We give communities the ability to choose the format for conversations in their communities—text, image, video, opinion polls, chatrooms—which enables them to create dynamic and engaging experiences. We give moderators the creative tools to design the look and feel of communities, and we give developers an open application programming interface (“API”) to build bots and create features that shape their communities, meaning what a community envisions for itself drives its unique development.
Conversations flow across Reddit through cross-posting, where a post from one community can be shared into another community to spur new conversation with a different audience.
Layered Moderation, Community Management, and Safety Fosters Trust
We are committed to continuously enhancing our policies and processes to promote the safety of users and moderators, and the health of our platform. Our approach is akin to a democratic city, wherein everyone has the ability to vote and self-organize, follow a set of common rules, and establish community-specific norms. This approach gives Redditors a voice and agency in the process and also means that any content that gains traction on Reddit has been reviewed in context by humans.
Communities self-organize and create subreddit-level rules that are tailored to their unique circumstances, and volunteer moderators within the community enforce those rules. We support moderators as community builders and empower them with tools to create and contribute to communities. The result is that each community has its own unique environment in which Redditors can express their genuine perspective and share real experiences while discouraging bad behavior. We backstop this bottoms-up organic moderation engine with our site-wide Reddit Rules, a set of overarching rules and policies that govern all content on Reddit. These rules are intended to be protective, not intrusive. They help protect against harassment, bullying, and violence – especially hate based on identity or vulnerability.
Our Strategy for Growing Users and Engagement
Our strategy is to support the growth and engagement of our communities. We aim to become Redditors’ first choice when they are exploring their passions, searching for human perspective and conversation, or keeping tabs on culture and news. We intend to grow users and engagement through the following initiatives:
•Grow Awareness and Engagement of Reddit. We plan to expand the ways people become aware of Reddit through various strategies depending on the type of use case and user, including machine translation, search engine optimization and partnerships. We have also invested in improving our off-platform presence, by making it easier to share and embed Reddit content on other surfaces and websites. We had an average of 121.4 million DAUq and 471.6 million WAUq in the three months ended December 31, 2025. We believe that there is a significant opportunity to convert many of the users who come to Reddit on a weekly or monthly basis to daily users. We plan to continue to grow engagement by focusing on:
◦Improving Discovery and User Experience. We are focused on delivering immediate value and less friction in the onboarding experience for new users. To that end, we are using AI and LLMs to make onboarding more intuitive, lower barriers to logging in and contributing, and classifying content to help people find their home on Reddit.
◦Customized Content Recommendations. We utilize AI to recommend relevant posts and communities, utilizing factors such as search queries, post topics, and engagement with similar users to enhance both the search and discovery experience. We believe our investments in AI have improved new user onboarding and driven engagement with existing users.
•Reddit as a Search Destination. Reddit is one of the few platforms positioned to become a true search destination. Every week, hundreds of millions of people come to Reddit looking for advice, and we are focused on turning more of that intent into daily users who start their internet search journey on Reddit. In 2025, we began integrating Reddit Answers, our AI-powered conversational search tool, into Reddit’s core search experience and rolling out to non-
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English languages. Our aim is to have a single, great search experience on Reddit. While it is still early, we are seeing good traction. During the three months ended December 31, 2025, over 80 million people searched on Reddit weekly.
•Grow Our International User Base. During the three months ended December 31, 2025, approximately 57% of Redditors visited the platform from outside of the United States. In the three months ended December 31, 2025, over 90% of all Reddit posts created were made in English. We see a massive opportunity to grow in geographies outside of the United States and in languages beyond English. As of December 31, 2025, machine translation is live in 35 languages and approximately one billion posts have been translated in various languages, including Spanish, French, Italian, German, Portuguese, Swedish, Dutch, and Filipino. Additionally, we built a local content framework to identify top interests in each country, which we use to guide partnerships, content and marketing. This approach worked well in India, and now we are applying it to additional markets globally. We have captured increased international momentum, with an average of 68.9 million international DAUq for the three months ended December 31, 2025, representing 28% growth year over year.
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors” and “Note Regarding Forward-Looking Statements.”
Overview of First Quarter 2026 Results
User Metrics
•Daily Active Uniques (“DAUq”) were 126.8 million for the three months ended March 31, 2026, an increase of 17% year-over-year
•Average revenue per unique (“ARPU”) was $5.23 for the three months ended March 31, 2026, an increase of 44% year-over-year
Financial Results
•Revenue was $663.4 million for the three months ended March 31, 2026, an increase of 69% year-over-year
•Gross margin was 91.5% for the three months ended March 31, 2026, as compared to 90.5% in the three months ended March 31, 2025
•Operating expenses were $424.2 million for the three months ended March 31, 2026 as compared to $351.4 million in the three months ended March 31, 2025
•Net income was $204.0 million for the three months ended March 31, 2026, as compared to $26.2 million in the three months ended March 31, 2025
•Adjusted EBITDA was $266.0 million for the three months ended March 31, 2026, as compared to $115.3 million in the three months ended March 31, 2025
•Net cash provided by operating activities was $312.3 million for the three months ended March 31, 2026, as compared to $127.6 million in the three months ended March 31, 2025
•Free Cash Flow was $311.2 million for the three months ended March 31, 2026, as compared to $126.6 million in the three months ended March 31, 2025
•Cash, cash equivalents, and marketable securities were $2.8 billion as of March 31, 2026
Key Financial and Operating Metrics
We review a number of metrics, including the key metrics discussed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.
Trends in User Metrics
Daily Active Unique. We define a daily active unique (“DAUq”) as a user whom we can identify with a unique identifier who has visited a page on the Reddit website, www.reddit.com, or opened a Reddit application at least once during a 24-hour period. We calculate average DAUq for a particular period by adding the number of DAUq on each day of that period and dividing that sum by the number of days in that period. DAUq is shown globally and also broken out by the United States and the rest of the world because these markets have different characteristics. Most notably, we are more advanced in engagement and monetization in the United States than in the rest of the world. We measure DAUq because we believe that this metric helps management and investors understand usage of and engagement with our platform. DAUq is the primary metric by which we measure the scale of our active user base.
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DAUq includes visits from those who have logged in to a registered account as well as those who have not logged in to—or do not have—a registered account. Visitors that come to Reddit from search engines are generally not logged in and originate from both desktop and mobile web. Currently, monetization of these users is mainly through conversation pages and feed ads.
During the three months ended December 31, 2023, we deployed further advances in our process used to identify and address activity by users and visitors, including web crawlers and scrapers. As we identify automated agents, we remove them from our DAUq count prospectively and do not recalculate DAUq for prior periods if we assess such impact to be immaterial. As we have continued to improve our capabilities to identify suspicious traffic, we have not seen this methodology materially impact trends in DAUq from quarter to quarter. Year-over-year and quarter-over-quarter activity can also fluctuate due to various internal and external factors.
Historically we monitored logged-in DAUq, which we define as a user whom we can identify with a unique identifier who has visited a page on the Reddit website, www.reddit.com, or opened a Reddit application at least once during a 24-hour period and was logged in to a registered account. We measured logged-in DAUq because these users tend to have higher engagement and spend more time on our platform compared to users who are not logged in to a registered account. However, as our business has scaled and our product strategy has evolved, our focus has shifted to delivering immediate value for all users and enabling them to engage with content on Reddit, regardless of whether they are logged in or logged out. As a result, management primarily uses total DAUq and DAUq by geography for managing the business and for evaluating our core operating performance. Therefore, beginning in the quarter ended September 30, 2026, we will no longer report logged-in and logged-out DAUq.
Quarterly Average DAUq
(in millions)
| Total DAUq YoY Growth: | 51% | 47% | 39% | 31% | 21% | 19% | 19% | 17% | ||||||||||||||||||
| Logged-in DAUq YoY Growth: | 31% | 27% | 27% | 23% | 17% | 14% | 10% | 7% |
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| Total DAUq YoY Growth: | 59% | 51% | 32% | 21% | 11% | 7% | 9% | 7% | Total DAUq YoY Growth: | 44% | 44% | 46% | 41% | 32% | 31% | 28% | 26% | ||||||||||||||||||||||||||||||||||||||
| Logged-in DAUq YoY Growth: | 32% | 29% | 24% | 19% | 12% | 7% | 5% | 1% | Logged-in DAUq YoY Growth: | 30% | 26% | 29% | 27% | 22% | 19% | 14% | 12% | ||||||||||||||||||||||||||||||||||||||
We assess both year-over-year and quarter-over-quarter growth of DAUq in each period.
In the three months ended March 31, 2026, global DAUq grew 17% compared to the prior year period, driven by 7% growth in DAUq in the United States and 26% growth in DAUq in the rest of world. Global DAUq grew 4% compared to the prior quarter period, driven by 2% growth in DAUq in the United States and 6% growth in DAUq in the rest of world. The growth in global DAUq in the three months ended March 31, 2026, compared to the prior year and prior quarter periods, was primarily driven by the combination of third-party search engine algorithm changes and continued traction from our growth initiatives, particularly in machine translation, marketing, and product improvements.
Weekly Active Unique. We define a weekly active unique (“WAUq”) as a user whom we can identify with a unique identifier who has visited a page on the Reddit website, www.reddit.com, or opened a Reddit application at least once during a trailing seven-day period. We calculate average quarterly WAUq for a particular period by adding the number of WAUq on each day of that period and dividing that sum by the number of days in that period. We measure WAUq because we believe that this metric helps management and investors understand the reach of our platform.
During the three months ended December 31, 2023, we deployed further advances in our process used to identify and address activity by users and visitors, including web crawlers and scrapers. As we identify automated agents, we remove them from our WAUq count prospectively and do not recalculate WAUq for prior periods if we assess such impact to be immaterial. As we have continued to improve our capabilities to identify suspicious traffic, we have not seen this methodology materially impact trends in WAUq from quarter to quarter.
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Quarterly Average WAUq
(in millions)
| WAUq YoY Growth: | 57% | 53% | 42% | 31% | 22% | 21% | 24% | 23% | ||||||||||||||||||
| DAUq/WAUq: | 27% | 27% | 27% | 27% | 27% | 26% | 26% | 26% |
WAUq YoY Growth: | 68% | 58% | 31% | 18% | 8% | 6% | 12% | 10% | WAUq YoY Growth: | 48% | 48% | 52% | 44% | 35% | 37% | 34% | 33% |
In the three months ended March 31, 2026, global WAUq grew 23% compared to the prior year period, driven by 10% growth in WAUq in the United States and 33% growth in WAUq in the rest of world. For the three months ended March 31, 2026, the proportion of DAUq to WAUq was 26%.
Trends in Monetization Metrics
We monetize our business primarily through advertising on our mobile applications and website. In the three months ended March 31, 2026, we recorded revenue of $663.4 million, as compared to revenue of $392.4 million for the three months ended March 31, 2025, representing an increase of 69% compared to the prior year period.
ARPU. We define average revenue per unique (“ARPU”) as quarterly revenue in a given geography divided by the average DAUq in that geography. For the purposes of calculating ARPU, advertising revenue in a given geography is based on the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity, while other revenue in a given geography is based on the billing address of the customer. This differs from the presentation of our revenue by geography in the notes to our consolidated financial statements included elsewhere in the Quarterly Report on Form 10-Q, where both advertising revenue and other revenue are based on the billing address of the customer.
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We present ARPU globally and also broken out on a United States and rest of world basis because we currently monetize users in the United States and the rest of the world at different rates. We measure ARPU because we believe that this metric helps our management and investors assess the extent to which we are monetizing our DAUq. Monetization of new users is generally at a lower rate than existing users and as such, ARPU tends to grow at a lower rate than revenue in periods of strong DAUq growth. Additionally, logged-out users typically have lower engagement and spend less time on our platform compared to users who are logged in to a registered account, and therefore, logged-in users generally contribute significantly more to ARPU than logged-out users due to the lower monetization opportunity of logged-out users. Our ARPU reflects the seasonality of our advertising revenue, with the fourth quarter typically being the strongest quarter of each year, especially in the United States, our most developed geography. United States ARPU is higher primarily due to the relative size and maturity of the U.S. digital advertising market, a dynamic we expect will continue for the foreseeable future.
Quarterly ARPU
(in dollars)
| YoY Growth: | 2% | 14% | 23% | 23% | 47% | 41% | 42% | 44% |
| YoY Growth: | (5)% | 12% | 28% | 31% | 59% | 54% | 53% | 54% | YoY Growth: | 17% | 16% | 25% | 22% | 40% | 39% | 38% | 51% | ||||||||||||||||||||||||||||||||||||||
During the three months ended March 31, 2026, ARPU was $5.23, an increase of 44% compared to $3.63 for the prior year period, United States ARPU was $9.63, compared to $6.27 for the prior year period, and rest of world ARPU was $2.02, compared to $1.34 for the prior year period. The increase in global ARPU compared to the prior year period was due primarily to an increase in advertising revenue driven by an increase in ad impressions delivered and an increase in pricing. During the three months ended March 31, 2026, ad impressions delivered increased by approximately 32% compared to the prior year period driven in part by ad load optimization and improvements, including new ad placements, and by increases in the number of users and user engagement. During the three months ended March 31, 2026, the price of ads increased by approximately
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32% compared to the prior year period driven by higher advertiser demand and performance across the full funnel of ad objectives.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures to supplement our consolidated financial statements, which are presented in accordance with U.S. GAAP, to evaluate our core operating performance. These non-GAAP financial measures include Adjusted EBITDA and Free Cash Flow. We use these non-GAAP financial measures to facilitate reviews of our operational performance and as a basis for strategic planning. By excluding certain items that are non-recurring or not reflective of the performance of our normal course of business, we believe that Adjusted EBITDA and Free Cash Flow provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow investors to supplement their understanding of our financial trends and evaluate our ongoing and future performance in the same manner as management. However, there are a number of limitations related to the use of non-GAAP financial measures as they reflect the exercise of judgment by our management about which expenses are included or excluded in determining these non-GAAP measures. These non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.
Adjusted EBITDA
Adjusted EBITDA is defined as net income excluding interest (income) expense, net, income tax expense (benefit), depreciation and amortization, stock-based compensation expense and related taxes, other (income) expense, net, and certain other non-recurring or non-cash items impacting net income that we do not consider indicative of our ongoing business performance. Other (income) expense, net consists primarily of realized gains and losses on sales of marketable securities, foreign currency transaction gains and losses, and other income and expense that are not indicative of our core operating performance. We consider the exclusion of certain non-recurring or non-cash items in calculating Adjusted EBITDA to provide a useful measure for investors and others to evaluate our operating results in the same manner as management.
The following table presents a reconciliation of our net income, the most directly comparable financial measure presented in accordance with U.S. GAAP, to Adjusted EBITDA:
| Three months ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Reconciliation of Adjusted EBITDA: | |||||||||||||||||||
| Net income | $ | 203,981 | $ | 26,158 | |||||||||||||||
| Add (deduct): | |||||||||||||||||||
| Interest (income) expense, net | (23,885) | (20,414) | |||||||||||||||||
| Income tax expense (benefit) | 1,747 | (1,721) | |||||||||||||||||
Depreciation and amortization(1) | 4,210 | 3,963 | |||||||||||||||||
Stock-based compensation expense and related taxes(2) | 78,848 | 107,405 | |||||||||||||||||
| Other (income) expense, net | 1,069 | (120) | |||||||||||||||||
| Adjusted EBITDA | $ | 265,970 | $ | 115,271 | |||||||||||||||
(1)Includes depreciation and amortization as follows:
| Three months ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Research and development | $ | 2,639 | $ | 2,540 | |||||||||||||||
| Sales and marketing | 1,342 | 1,202 | |||||||||||||||||
| General and administrative | 229 | 221 | |||||||||||||||||
| Depreciation and amortization | $ | 4,210 | $ | 3,963 | |||||||||||||||
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(2)Includes stock-based compensation expense and related taxes as follows:
| Three months ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Cost of revenue | $ | 145 | $ | 217 | |||||||||||||||
| Research and development | 49,672 | 65,187 | |||||||||||||||||
| Sales and marketing | 7,137 | 14,220 | |||||||||||||||||
| General and administrative | 21,894 | 27,781 | |||||||||||||||||
| Stock-based compensation expense and related taxes | $ | 78,848 | $ | 107,405 | |||||||||||||||
Free Cash Flow
Free Cash Flow represents net cash provided by (used in) operating activities less purchases of property and equipment. We believe that Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Additionally, we believe that Free Cash Flow is an important measure since we use third-party infrastructure partners to host our services and therefore we do not incur significant capital expenditures to support revenue generating activities.
The following table presents a reconciliation of net cash provided by (used in) operating activities, the most directly comparable financial measure calculated in accordance with U.S. GAAP, to Free Cash Flow:
| Three months ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Reconciliation of Free Cash Flow: | |||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 312,253 | $ | 127,578 | |||||||||||||||
| Less: | |||||||||||||||||||
| Purchases of property and equipment | (1,090) | (979) | |||||||||||||||||
| Free Cash Flow | $ | 311,163 | $ | 126,599 | |||||||||||||||
Results of Operations
The following table summarizes our historical consolidated statements of operations data for the periods indicated:
| Three months ended March 31, | |||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 663,411 | $ | 392,361 | $ | 271,050 | 69 | % | |||||||||||||||||||||||||||||||
| Net income | 203,981 | 26,158 | 177,823 | NM | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA(1) | 265,970 | 115,271 | 150,699 | 131 | % | ||||||||||||||||||||||||||||||||||
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NM - Not meaningful
(1)See “Non-GAAP Financial Measures—Adjusted EBITDA” for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Components of Results of Operations
Revenue
We generate a majority of our revenue through the sale of advertising on our mobile applications and website. We recognize revenue only after transferring control of promised goods or services to customers, which occurs when a user clicks on an ad contracted on a cost per click (“CPC”) basis, views an ad contracted on a cost per thousand impressions (“CPM”) basis, views a video ad contracted on a cost per view (“CPV”) basis, or on a fixed fee basis, based upon ad delivery over the service period, which is typically less than 30 days in duration.
We also generate revenue from content licensing and products sold directly to users. In our content licensing arrangements, we provide customers with the right to access content from our platform over the contractual period. We recognize content
26
licensing revenue as our content partners consume and benefit from their use of the licensed content, which is generally ratably over the license period. Revenue from other products sold directly to users, including Reddit Premium and Reddit Gold, was not material for the periods presented.
Cost of Revenue
Cost of revenue consists primarily of payments to third parties for the cost of hosting and supporting our mobile applications and website. In addition, cost of revenue includes expenses directly associated with the delivery of our advertising and other services, including advertising targeting and measurement services, credit card and other transaction processing fees, and payments to our content partners. Cost of revenue also consists of employee-related costs, including salaries, benefits, and stock-based compensation.
Research and Development Expenses
Research and development expenses consist primarily of employee-related costs including salaries, benefits, and stock-based compensation for engineers and other employees engaged in the research, design, and development of new and existing products. Research and development expenses also include hosting costs associated with internal research and development activities, as well as professional services, allocated facilities, and other supporting overhead costs.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of employee-related costs including salaries, benefits, and stock-based compensation for employees engaged in sales, sales support, business and brand development, marketing, and customer service functions. Sales commissions are expensed as incurred in sales and marketing expenses as the expected period of benefit is one year or less. Sales and marketing expenses also include costs incurred for advertising, marketing, and other promotional expenditures, as well as professional services, allocated facilities, and other supporting overhead costs.
General and Administrative Expenses
General and administrative expenses consist primarily of employee-related costs including salaries, benefits, and stock-based compensation for certain executives as well as employees engaged in finance, legal, human resources, information technology, and other administrative teams. General and administrative expenses also include costs incurred for professional services, non-income based taxes, insurance, allocated facilities, and other supporting overhead costs.
Other Income (Expense), Net
Other income (expense), net, consists primarily of interest income, interest expense, realized gains and losses on sales of marketable securities, and foreign currency transaction gains and losses.
Income Tax Expense (Benefit)
We are subject to income taxes in the United States and foreign jurisdictions. Our income tax provision represents the income tax expense or benefit associated with our operations based on the tax laws of the jurisdictions in which we operate. The foreign jurisdictions where we operate have different statutory tax rates than the United States. Additionally, certain of our foreign earnings may also be taxable in the United States. Accordingly, our effective tax rates will vary depending on the relative proportion of foreign to domestic income, use of foreign tax credits, changes in the valuation of our deferred tax assets and liabilities, and changes in tax laws.
We have a full valuation allowance against our United States federal and state deferred tax assets and will continue to maintain it until there is sufficient evidence to support the future utilization of these assets. Given our recent history of generating net income in the United States, we believe that there is a reasonable possibility that sufficient positive evidence may become available within the next 12 months to allow us to release a significant portion of the valuation allowance in the United States. The reversal would result in a significant income tax benefit in the period when we release it. However, the exact timing and amount of the valuation allowance release are subject to change based on a number of factors, including but not limited to, the level of profitability (income before income taxes adjusted for permanent differences) that we are able to accurately forecast, as well as the amount of our tax deductible stock-based compensation, which is dependent upon our publicly traded share price, and macroeconomic conditions, among other factors.
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Discussion of Results of Operations
The following table sets forth our consolidated statements of operations data for the periods indicated:
| Three months ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| (in thousands) | |||||||||||||||||||
| Consolidated Statements of Operations Data: | |||||||||||||||||||
| Revenue | $ | 663,411 | $ | 392,361 | |||||||||||||||
Costs and expenses: | |||||||||||||||||||
| Cost of revenue | 56,267 | 37,089 | |||||||||||||||||
| Research and development | 207,246 | 191,271 | |||||||||||||||||
| Sales and marketing | 151,472 | 90,685 | |||||||||||||||||
| General and administrative | 65,514 | 69,413 | |||||||||||||||||
| Total costs and expenses | 480,499 | 388,458 | |||||||||||||||||
| Income (loss) from operations | 182,912 | 3,903 | |||||||||||||||||
| Other income (expense), net | 22,816 | 20,534 | |||||||||||||||||
| Income (loss) before income taxes | 205,728 | 24,437 | |||||||||||||||||
| Income tax expense (benefit) | 1,747 | (1,721) | |||||||||||||||||
| Net income | $ | 203,981 | $ | 26,158 | |||||||||||||||
Adjusted EBITDA(1) | $ | 265,970 | $ | 115,271 | |||||||||||||||
| Net cash provided by (used in) operating activities | $ | 312,253 | $ | 127,578 | |||||||||||||||
Free Cash Flow(2) | $ | 311,163 | $ | 126,599 | |||||||||||||||
_________________
(1)See “Non-GAAP Financial Measures—Adjusted EBITDA” for more information and for a reconciliation of Adjusted EBITDA to net income, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
(2)See “Non-GAAP Financial Measures—Free Cash Flow” for more information and for a reconciliation of Free Cash Flow to net cash provided by (used in) operating activities, the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
The following table sets forth our consolidated statements of operations data expressed as a percentage of revenue for the periods indicated:
| Three months ended March 31, | |||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||
| (unaudited) | |||||||||||||||||||
| Consolidated Statements of Operations Data: | |||||||||||||||||||
| Revenue | 100 | % | 100 | % | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Cost of revenue | 8 | 9 | |||||||||||||||||
| Research and development | 31 | 49 | |||||||||||||||||
| Sales and marketing | 23 | 23 | |||||||||||||||||
| General and administrative | 10 | 18 | |||||||||||||||||
| Total costs and expenses | 72 | 99 | |||||||||||||||||
| Income (loss) from operations | 28 | 1 | |||||||||||||||||
| Other income (expense), net | 3 | 5 | |||||||||||||||||
| Income (loss) before income taxes | 31 | 6 | |||||||||||||||||
| Income tax expense (benefit) | 0 | 0 | |||||||||||||||||
| Net income | 31 | % | 6 | % | |||||||||||||||
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Three months ended March 31, 2026 and 2025
Revenue
| Three months ended March 31, | |||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 663,411 | $ | 392,361 | $ | 271,050 | 69 | % | |||||||||||||||||||||||||||||||||
| United States | 525,561 | 313,852 | 211,709 | 67 | % | ||||||||||||||||||||||||||||||||||||
| Rest of world | 137,850 | 78,509 | 59,341 | 76 | % | ||||||||||||||||||||||||||||||||||||
Revenue for the three months ended March 31, 2026 increased by $271.1 million, or 69%, compared to the prior year period. The growth in revenue was due primarily to an increase in advertising revenue of $266.0 million, or 74%, as compared to the prior year period driven by an increase in impressions delivered and an increase in pricing. During the three months ended March 31, 2026, ad impressions delivered increased by approximately 32% compared to the prior year period driven in part by ad load optimization and improvements, including new ad placements, and by increases in the number of users and user engagement. For more information regarding increases in the number of users, see “—Key Financial and Operating Metrics—Trends in User Metrics.” During the three months ended March 31, 2026, the price of ads increased by approximately 32% compared to the prior year period driven by higher advertiser demand and performance across the full funnel of ad objectives.
Revenue in the United States for the three months ended March 31, 2026 increased by $211.7 million, or 67%, compared to the prior year period. Revenue in the rest of world for the three months ended March 31, 2026 increased by $59.3 million, or 76%, compared to the prior year period. Revenue growth for both geographies was driven by the factors described above. The growth in revenue in the rest of world was also due to our focus on, among other factors, internationalization, including through machine translation and improving local content.
Cost of Revenue
| Three months ended March 31, | |||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||||||||
| Cost of revenue | $ | 56,267 | $ | 37,089 | $ | 19,178 | 52 | % | |||||||||||||||||||||||||||||||||
Cost of revenue for the three months ended March 31, 2026 increased by $19.2 million, or 52%, compared to the prior year period. The increase in cost of revenue was primarily attributable to increased hosting usage to support product enhancements and user growth on our platform, partially offset by lower hosting prices.
Research and Development Expenses
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-05-29 | Huffman Steve Ladd indirect | CEO & President | Sell | -18,000 ×8 | $174.13 | -$3,134,316 |
| 2026-05-18 | Wong Jennifer L. | Chief Operating Officer | Sell | -39,167 ×7 | $158.52 | -$6,208,842 |
| 2026-05-15 | Huffman Steve Ladd indirect | CEO & President | Sell | -18,000 ×6 | $157.15 | -$2,828,744 |
| 2026-05-05 | Huffman Steve Ladd indirect | CEO & President | Sell | -18,000 ×9 | $171.80 | -$3,092,449 |
| 2026-04-16 | Wong Jennifer L. | Chief Operating Officer | Sell | -39,167 ×7 | $161.47 | -$6,324,169 |
| 2026-04-15 | Huffman Steve Ladd indirect | CEO & President | Sell | -18,000 ×4 | $158.40 | -$2,851,237 |
| 2026-04-08 | Slowe Christopher Brian | Chief Technology Officer | Sell | -15,500 ×9 | $150.67 | -$2,335,420 |
| 2026-03-31 | Huffman Steve Ladd indirect | CEO & President | Sell | -18,000 ×8 | $132.77 | -$2,389,852 |
| 2026-03-23 | Slowe Christopher Brian | Chief Technology Officer | Sell | -9,500 ×5 | $141.28 | -$1,342,138 |
| 2026-03-18 | Wong Jennifer L. indirect | Chief Operating Officer | Sell | -5,658 ×5 | $143.42 | -$811,448 |
| 2026-03-18 | Wong Jennifer L. | Chief Operating Officer | Sell | -33,507 ×5 | $143.41 | -$4,805,231 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-07-28 10-Q expected by 2026-08-05 (in 43 days)
- ~2026-10-27 10-Q expected by 2026-11-04 (in 134 days)
- ~2027-04-27 10-Q expected by 2027-05-05 (in 316 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-01 10-Q Quarterly Report
- 2026-04-30 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-23 DEF 14A Proxy Statement
- 2026-02-06 10-K Annual Report
- 2026-02-05 8-K Earnings Release; Other Events; Financial Statements and Exhibits
- 2025-10-31 10-Q Quarterly Report
- 2025-10-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-01 10-Q Quarterly Report
- 2025-07-31 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-02 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-05-02 10-Q Quarterly Report
- 2025-05-01 8-K Earnings Release; Financial Statements and Exhibits
- 2025-02-13 10-K Annual Report
- 2025-02-12 8-K Earnings Release; Financial Statements and Exhibits
- 2024-10-30 10-Q Quarterly Report