Reddit (NYSE:RDDT) Issues Earnings Results

by · The Cerbat Gem

Reddit (NYSE:RDDT – Get Free Report) released its earnings results on Thursday. The company reported $1.24 earnings per share for the quarter, beating analysts’ consensus estimates of $0.97 by $0.27, Zacks reports. Reddit had a net margin of 18.33% and a return on equity of 14.94%. The firm had revenue of $725.61 million during the quarter, compared to the consensus estimate of $665.80 million.

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

  • Breakout financial year: Reddit reported 2025 revenue of $2.2 billion (+69% YoY), delivered $530 million in full-year net income, and generated strong margins and cash flow (Q4 free cash flow $264M; adjusted EBITDA margin ~38%).
  • Ad business momentum: Q4 ad revenue grew 75% YoY to $690M with active advertisers up >75% YoY, strong lower-funnel performance (conversion volumes doubled) and Reddit Max beta showing a ~17% CPA reduction and 27% conversion lift.
  • User and product progress: Engagement is rising (Q4 DAU 121M, WAU 471M) and search/Reddit Answers use expanded (weekly searchers ~80M; Answers queries ~15M), while product priorities for 2026 focus on onboarding, personalization and unified search — the company will phase out logged-in vs logged-out reporting in H2 2026.
  • Capital allocation and guidance: Board authorized a $1 billion share repurchase program, cash ended near $2.5B with a >$1B cash target, and Q1 2026 guidance targets ~$595–605M revenue (~53% YoY) with adjusted EBITDA $210–220M.

Reddit Stock Performance

Shares of NYSE RDDT traded up $0.30 during midday trading on Thursday, hitting $152.99. 10,923,270 shares of the company traded hands, compared to its average volume of 5,021,763. Reddit has a 12-month low of $79.75 and a 12-month high of $282.95. The firm has a market cap of $28.99 billion, a P/E ratio of 87.92, a P/E/G ratio of 1.15 and a beta of 2.17. The stock has a 50-day moving average price of $223.87 and a 200 day moving average price of $215.15.

Key Stories Impacting Reddit

Here are the key news stories impacting Reddit this week:

  • Positive Sentiment: Q4 results beat — Reddit reported Q4 EPS $1.24 vs. $0.97 consensus and revenue $725.6M vs. $665.8M forecast, showing improved profitability (net margin ~18%). Press Release
  • Positive Sentiment: Q1 revenue guide topped expectations — Reddit guided Q1 revenue to $595M–$605M vs. consensus near ~$579M, signaling continued ad-revenue strength. CNBC: Q1 Guide
  • Positive Sentiment: AI-fueled ad sales cited — Management and coverage highlight AI enhancements to Reddit’s ad platform as a reason advertisers are increasing spend; Reuters notes this helped forecast revenue above estimates and drove a strong after-hours move. Reuters: AI fuels ad sales
  • Positive Sentiment: $1B share repurchase — Reddit announced a $1 billion buyback, a direct capital-return action that supports the share price and signals confidence from the board. BusinessWire: Buyback
  • Neutral Sentiment: Media / analyst attention — Positive coverage (WSJ, CNBC) and commentary from influential voices (e.g., Jim Cramer) add momentum but also raise expectations that will need sustaining. WSJ: Q4 profit
  • Negative Sentiment: Insider selling / pre-earnings pullback — CEO Steve Huffman has sold multiple blocks of shares (most recently ~18,000), which prompted a pre-earnings pullback and remains a near-term investor concern. SEC Form 4 Schaeffers: Pullback

Analyst Ratings Changes

A number of equities research analysts have weighed in on the company. Zacks Research downgraded Reddit from a “strong-buy” rating to a “hold” rating in a report on Friday, December 26th. B. Riley restated a “buy” rating and set a $245.00 price target (up from $235.00) on shares of Reddit in a report on Friday, October 31st. Evercore ISI assumed coverage on Reddit in a report on Monday, January 12th. They issued an “outperform” rating and a $320.00 price target on the stock. Roth Mkm increased their price objective on Reddit from $210.00 to $215.00 and gave the stock a “neutral” rating in a research note on Friday, January 30th. Finally, Bank of America lifted their target price on shares of Reddit from $180.00 to $210.00 and gave the stock a “neutral” rating in a research report on Friday, October 31st. Two analysts have rated the stock with a Strong Buy rating, sixteen have given a Buy rating, eleven have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus price target of $245.36.

View Our Latest Stock Report on Reddit

Insiders Place Their Bets

In related news, CTO Christopher Brian Slowe sold 14,000 shares of the company’s stock in a transaction dated Thursday, January 22nd. The shares were sold at an average price of $212.61, for a total value of $2,976,540.00. Following the transaction, the chief technology officer owned 167,694 shares in the company, valued at $35,653,421.34. The trade was a 7.71% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Benjamin Seong Lee sold 3,320 shares of the firm’s stock in a transaction dated Friday, January 9th. The shares were sold at an average price of $260.22, for a total transaction of $863,930.40. Following the sale, the insider owned 62,608 shares of the company’s stock, valued at approximately $16,291,853.76. This represents a 5.04% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last quarter, insiders have sold 523,511 shares of company stock valued at $114,237,285. Insiders own 34.25% of the company’s stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently modified their holdings of RDDT. Geneos Wealth Management Inc. increased its position in Reddit by 344.6% in the first quarter. Geneos Wealth Management Inc. now owns 369 shares of the company’s stock worth $39,000 after buying an additional 286 shares in the last quarter. Quarry LP boosted its holdings in Reddit by 69.4% in the 3rd quarter. Quarry LP now owns 703 shares of the company’s stock worth $162,000 after buying an additional 288 shares during the period. Glenmede Investment Management LP bought a new stake in Reddit during the third quarter valued at about $206,000. Tcfg Wealth Management LLC purchased a new stake in shares of Reddit during the third quarter worth about $218,000. Finally, Apexium Financial LP purchased a new stake in Reddit during the 3rd quarter valued at approximately $235,000.

Reddit Company Profile

(Get Free Report)

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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