A community platform where people gather in more than 100,000 interest-based forums called subreddits to share posts, vote on content, and chat, making it a popular place for news, hobbies, and memes. It earns money from targeted advertising and by licensing its massive archive of user conversations to companies training large language models. Founded in 2005 by college roommates Steve Huffman and Alexis Ohanian, the site was originally meant to be named "Snoo" (slang for "what's new?") — but the domain was already taken, so they settled on Reddit ("read it") and gave the mascot alien the name Snoo instead, after Ohanian doodled it in a notebook during class.
Reddit's Q2 revenue rose 61% to $805M as ad pricing rose 40%, but user growth decelerated to 18%.
Ad pricing drove the quarter, not user growth. rose 61% to $804.9 million and more than doubled to $252.8 million, as a 40% increase in ad pricing and a 17% rise in impressions more than offset a deceleration in Daily Active Uniques growth to 18%. The business is now generating substantial cash, but its user base is expanding more slowly than a year ago.
Key takeaways
rose 61% to $804.9 million, driven primarily by a roughly 40% increase in advertising pricing and a 17% rise in ad impressions, with advertising revenue up 64%.
reached $252.8 million, up from $89.3 million a year ago, and widened to 28.8% from 13.6% as growth outpaced a 30% increase in operating expenses.
Global Daily Active Uniques (DAUq) grew 18% to 130.3 million, a deceleration from 51% growth in the same quarter last year, with U.S. DAUq up only 6% while Rest of World rose 28%.
What changed
DAUq growth decelerated to 18% from 31% a year ago and 19% in Q3 2025, settling the question of whether growth would stabilize near 19% — it has not, and U.S. growth slowed to 6%.
Ad pricing improved roughly 40%, sustaining the pricing recovery that began after the multi-quarter decline halted in FY2024, and confirming that advertiser demand can support growth even as user growth slows.
The logged-out user mix was not disclosed this quarter, leaving open the question of whether the 57% share reported in Q3 2025 has changed and whether monetization of those users is improving.
What to watch
Whether DAUq growth stabilizes near 18% or decelerates further, and whether the 6% U.S. growth rate signals saturation in the company's most monetizable market.
The logged-out user mix and its monetization rate, which was last disclosed at 57% in Q3 2025, to assess whether the company is closing the ARPU gap for these lower-rate users.
The pace of the $1.0 billion program, as a signal of management's capital allocation priorities and confidence in the stock's valuation.
Section summaries
Management's Discussion and Analysis
Revenue surged 61% YoY to $805M in Q2 2026, driven by 40% higher ad pricing and 17% more impressions, lifting net income to $253M.
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Total grew 61% to $804.9M, with advertising revenue up 64% YoY due to a ~40% increase in ad pricing and a ~17% rise in ad impressions.
Global DAUq rose 18% to 130.3M, led by 28% growth in Rest of World, while US DAUq grew 6%.
Average per user (ARPU) rose 36% to $6.18, reflecting the stronger ad pricing, with U.S. ARPU reaching $11.85.
reached $260.7 million, up from $110.8 million a year ago, and the company held $2.8 billion in cash and marketable securities at quarter-end.
Sales and marketing expense rose 62% , continuing the elevated spending trend noted in prior quarters to support growth.
The $1.0 billion program authorized in February 2026 was noted but no repurchase activity was disclosed, leaving the pace of execution as an open question.
The two data licensing agreements that account for substantially all 'other ' were not updated, leaving their renewal and expansion status unresolved amid the evolving AI training market.
Whether the 40% ad pricing increase is sustained, given that pricing gains are now the primary growth driver as user growth decelerates.
ARPU increased 36% to $6.18, with US ARPU reaching $11.85 and Rest of World ARPU at $2.26.
Operating expenses rose 30% to $502.9M, primarily from higher sales and marketing spend (up 62% YoY) and R&D costs (up 18% YoY).
more than doubled to $252.8M, and surged to $260.7M from $110.8M a year ago.
The company held $2.8B in cash and marketable securities, authorized a $1B program, and extended its AWS cloud commitment to $880M through 2029.
This information is set forth under Note 9—Commitments and Contingencies—Legal Matters and Indemnifications to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
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This information is set forth under Note 9—Commitments and Contingencies—Legal Matters and Indemnifications to the consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Reddit faces material risks from user engagement declines, advertiser concentration, AI-driven search changes, and evolving global content regulations.
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A decline in or user engagement, particularly from logged-out or internationally acquired users, could directly reduce advertising and harm the business.
Changes in internet search engine algorithms or AI-generated search features may significantly reduce organic traffic to Reddit, threatening user growth and ad .
The business is highly dependent on advertising, with the top 10 advertisers accounting for 21% of 2025 , and faces intense competition for ad budgets from larger platforms.
Evolving global regulations, including the EU's Digital Services Act and potential designation, impose significant new content moderation, transparency, and compliance costs.
Reliance on volunteer moderators and community-contributed content creates operational risks, as moderator revolts or a decline in content quality could disrupt the platform and deter advertisers.
Content licensing for AI training is a novel, concentrated stream, with substantially all contract value from two partners, and faces legal challenges from unauthorized data scraping.