Reddit (NYSE:RDDT) Announces Earnings Results, Beats Expectations By $0.39 EPS

Key Points

• Reddit beat Q1 expectations with $1.01 EPS versus a $0.62 consensus and revenue of $663M (up ~69% YoY), delivering strong profitability (net margin ~24% and >40% adjusted EBITDA margin).
• Ad momentum is driving growth—ad revenue was ~$625M (+74% YoY), active advertisers rose >75% YoY, early results from the Reddit Max beta show lower CPA and higher conversions, and management guided Q2 revenue above Street estimates while positioning Reddit as strategic AI “fuel.”
• Despite the beat, the stock trades at a high valuation (PE ~56) with mixed analyst views and notable insider activity (more shares sold than bought recently), which could limit near-term upside.

Reddit (NYSE:RDDT - Get Free Report) issued its quarterly earnings results on Thursday. The company reported $1.01 EPS for the quarter, topping the consensus estimate of $0.62 by $0.39, FiscalAI reports. The firm had revenue of $663.41 million during the quarter, compared to analyst estimates of $607.20 million. Reddit had a net margin of 24.05% and a return on equity of 20.89%. Reddit's revenue for the quarter was up 69.1% compared to the same quarter last year. During the same quarter in the prior year, the business posted $0.13 earnings per share.

Here are the key takeaways from Reddit's conference call:

• Q1 revenue reached $663 million (+69% YoY) with ad revenue of $625 million (+74% YoY); the company reported >90% gross margins, a 40% adjusted EBITDA margin, record cash flow >$300M and GAAP EPS of $1.01—its seventh consecutive quarter of >60% revenue growth.
• Reddit says it has nearly 500 million weekly users (200M in the U.S.) and is targeting 100 million daily U.S. users, while investing heavily in feed, ML, onboarding and performance to lift frequency and retention, but acknowledges engagement still needs improvement.
• Commercial momentum includes strong early adoption of Reddit Max (beta) with reported ~17% lower CPA and 25% more conversions, active advertisers up >75% YoY, and commerce products (DPAs, Shopify integration) delivering materially higher ROAS for advertisers.
• Reddit framed its two-decades of community conversation as a strategic asset for AI (partnerships with Google/OpenAI), but provided limited detail on current AI licensing economics or exclusivity, leaving the magnitude of near-term AI monetization unclear.

Reddit Price Performance

NYSE RDDT traded down $0.35 on Thursday, reaching $147.40. The company had a trading volume of 8,868,880 shares, compared to its average volume of 3,541,958. Reddit has a 1 year low of $94.89 and a 1 year high of $282.95. The firm has a 50-day moving average of $144.12 and a 200-day moving average of $184.31. The firm has a market capitalization of $28.16 billion, a PE ratio of 56.26, a P/E/G ratio of 1.07 and a beta of 2.40.

Insider Activity

In other news, Director Sarah E. Farrell purchased 43,800 shares of the company's stock in a transaction that occurred on Tuesday, February 10th. The shares were purchased at an average price of $149.52 per share, with a total value of $6,548,976.00. Following the purchase, the director directly owned 43,800 shares of the company's stock, valued at approximately $6,548,976. This represents a ∞ increase in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, CTO Christopher Brian Slowe sold 19,036 shares of the business's stock in a transaction on Monday, February 23rd. The stock was sold at an average price of $144.05, for a total transaction of $2,742,135.80. Following the completion of the transaction, the chief technology officer owned 185,057 shares in the company, valued at $26,657,460.85. This represents a 9.33% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders acquired 61,000 shares of company stock valued at $8,870,815 and sold 298,441 shares valued at $44,170,999. Corporate insiders own 34.25% of the company's stock.

Institutional Trading of Reddit

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Geneos Wealth Management Inc. boosted its holdings in Reddit by 344.6% in the first quarter. Geneos Wealth Management Inc. now owns 369 shares of the company's stock valued at $39,000 after purchasing an additional 286 shares during the last quarter. Summit Securities Group LLC purchased a new stake in Reddit during the 4th quarter worth approximately $46,000. Towarzystwo Funduszy Inwestycyjnych PZU SA raised its position in shares of Reddit by 214.3% in the 4th quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA now owns 220 shares of the company's stock valued at $51,000 after purchasing an additional 150 shares in the last quarter. GW&K Investment Management LLC raised its position in shares of Reddit by 76.2% in the 4th quarter. GW&K Investment Management LLC now owns 229 shares of the company's stock valued at $53,000 after purchasing an additional 99 shares in the last quarter. Finally, Itau Unibanco Holding S.A. purchased a new position in shares of Reddit during the 4th quarter valued at approximately $66,000.

Reddit News Roundup

Here are the key news stories impacting Reddit this week:

• Positive Sentiment: Q1 results beat expectations — Reddit posted $1.01 EPS vs. a $0.62 consensus and revenue of $663.4M above estimates; the beat signals stronger monetization and margin improvement. Reddit Inc. (RDDT) Beats Q1 Earnings and Revenue Estimates
• Positive Sentiment: Ad revenue and profitability surged — ad sales jumped ~74% to ~$625M and Reddit reported a $204M profit, showing the ad recovery is translating to the bottom line. Reddit First-Quarter Profit, Sales Surge
• Positive Sentiment: Q2 revenue guide above Street — management gave revenue guidance ($715M–$725M) above consensus, reinforcing confidence that AI-powered ad tools and product changes will sustain ad growth. Reddit expects revenue above estimates as AI tools fuel ad growth
• Positive Sentiment: CEO frames Reddit as strategic AI input — Steve Huffman called Reddit “the fuel” for AI, positioning the company as a valuable data partner and suggesting upside from AI-driven ad products without large model costs. Reddit's CEO calls his company 'the fuel' for artificial intelligence
• Neutral Sentiment: Company releases official shareholder letter and press release summarizing results and commentary for investors — useful for digging into segment details and management tone. Reddit Reports First Quarter 2026 Results
• Neutral Sentiment: Deep-dive metric analysis pieces are out (Zacks) that compare key KPIs and year-ago figures — helpful for modeling sustainability but not immediate catalysts. Reddit Inc. (RDDT) Reports Q1 Earnings: What Key Metrics Have to Say
• Negative Sentiment: Valuation and mixed analyst views could cap near-term upside — RDDT trades at a high P/E and some analysts remain conflicted on the name, which can lead to profit-taking even after strong results. Analysts Conflicted on These Communication Services Names: Reddit Inc Class A (RDDT) and Warner Bros (WBD)

Analyst Upgrades and Downgrades

A number of analysts have recently commented on the company. Deutsche Bank Aktiengesellschaft restated a "buy" rating and set a $285.00 price objective on shares of Reddit in a report on Tuesday, January 20th. Oppenheimer reduced their target price on Reddit from $300.00 to $250.00 and set an "outperform" rating on the stock in a report on Friday, February 6th. Citigroup began coverage on Reddit in a research report on Tuesday, April 21st. They set a "buy" rating for the company. The Goldman Sachs Group dropped their price target on Reddit from $206.00 to $180.00 and set a "neutral" rating for the company in a research note on Tuesday, April 14th. Finally, Piper Sandler reaffirmed an "overweight" rating and issued a $205.00 price objective (down from $290.00) on shares of Reddit in a research note on Friday, February 6th. One investment analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating and eleven have assigned a Hold rating to the company. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $229.79.

Reddit Company Profile

Reddit is an online social news aggregation, discussion and content-sharing platform organized around user-created communities called "subreddits," each focused on a particular topic or interest. Registered users submit links, text posts, images and video, and community members vote and comment to surface popular content. The site is accessed via its web platform and mobile apps for iOS and Android, and it supports live events such as Ask Me Anything (AMA) sessions and community-driven discussions.

Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit is headquartered in San Francisco and serves a global audience with particularly large user bases in the United States and other English-speaking markets.

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