We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Reddit Benefits From Strong User Growth: A Sign for More Upside?
Read MoreHide Full Article
Key Takeaways
Reddit's daily active users jumped 21% year over year to 110 million in Q2 2025.
Enhanced search tools, including Reddit Answers, drove sharp engagement and platform use.
Localization in 23 languages and new profile features strengthened Reddit's global reach.
Reddit (RDDT - Free Report) is benefiting from strong user growth, which signals potential for further upside in its business performance and market position. In the second quarter of 2025, Reddit reported a 21% year-over-year increase in daily active users, reaching 110 million globally. This growth is driven by strategic product enhancements, targeted marketing initiatives and international expansion.
Reddit’s focus on search functionality is also playing a significant role in user growth. The platform’s core search product now boasts 70 million weekly users, while Reddit Answers, its AI-powered search tool, has grown to 6 million users in the second quarter of 2025, up from 1 million in the first quarter. By integrating search more deeply into the user experience and making it a key feature, Reddit is positioning itself as a true search destination, catering to both scrollers and seekers.
International expansion further contributed to user growth. With machine translation now available in 23 languages, Reddit is unlocking access to millions of users across Asia, Europe, and Latin America. Localization efforts, combined with focused marketing campaigns like the brand initiative in France, are helping Reddit attract and retain users in non-English-speaking markets.
Expanding portfolio has been noteworthy. In June 2025, Reddit rolled out new profile customization features, allowing users to curate their profiles via a “Content and activity” setting, choose visibility of posts and comments on a subreddit-by-subreddit basis, hide NSFW content and follower counts, and view a refreshed activity summary, all accessible under a unified “Curate your profile” section.
RDDT Faces Stiff Competition
RDDT is facing stiff competition from competitors like Pinterest (PINS - Free Report) and Snap (SNAP - Free Report) , which are also expanding into advertising to compete in the rapidly growing digital ad market.
Pinterest is benefiting from solid user engagement across all regions. In the second quarter of 2025, Pinterest witnessed 11% year-over-year growth in global monthly active users to 578 million, which is an all-time record.
Snapchat continues to evolve as a visual-first social media platform with strong traction among Gen Z users. In the second quarter of 2025, Snapchat’s global community reached 469 million daily active users (DAU), up 8.6% year over year. Snapchat added 9 million DAU on a quarter-over-quarter basis.
RDDT’s Share Price Performance, Valuation, and Estimates
RDDT’s shares have gained 22.9% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 21.6% and the Internet - Software industry’s appreciation of 17.1%.
RDDT Stock's Performance
Image Source: Zacks Investment Research
RDDT shares are overvalued, with a forward 12-month Price/Sales of 14.36X compared with the Computer & Technology sector’s 6.83X. RDDT has a Value Score of F.
Price/Sales (F12M)
Image Source: Zacks Investment Research
The consensus mark for 2025 earnings is pegged at $1.87 per share, which has increased by a penny in the past 30 days. This suggests 156.16% year-over-year growth.
Image: Bigstock
Reddit Benefits From Strong User Growth: A Sign for More Upside?
Key Takeaways
Reddit (RDDT - Free Report) is benefiting from strong user growth, which signals potential for further upside in its business performance and market position. In the second quarter of 2025, Reddit reported a 21% year-over-year increase in daily active users, reaching 110 million globally. This growth is driven by strategic product enhancements, targeted marketing initiatives and international expansion.
Reddit’s focus on search functionality is also playing a significant role in user growth. The platform’s core search product now boasts 70 million weekly users, while Reddit Answers, its AI-powered search tool, has grown to 6 million users in the second quarter of 2025, up from 1 million in the first quarter. By integrating search more deeply into the user experience and making it a key feature, Reddit is positioning itself as a true search destination, catering to both scrollers and seekers.
International expansion further contributed to user growth. With machine translation now available in 23 languages, Reddit is unlocking access to millions of users across Asia, Europe, and Latin America. Localization efforts, combined with focused marketing campaigns like the brand initiative in France, are helping Reddit attract and retain users in non-English-speaking markets.
Expanding portfolio has been noteworthy. In June 2025, Reddit rolled out new profile customization features, allowing users to curate their profiles via a “Content and activity” setting, choose visibility of posts and comments on a subreddit-by-subreddit basis, hide NSFW content and follower counts, and view a refreshed activity summary, all accessible under a unified “Curate your profile” section.
RDDT Faces Stiff Competition
RDDT is facing stiff competition from competitors like Pinterest (PINS - Free Report) and Snap (SNAP - Free Report) , which are also expanding into advertising to compete in the rapidly growing digital ad market.
Pinterest is benefiting from solid user engagement across all regions. In the second quarter of 2025, Pinterest witnessed 11% year-over-year growth in global monthly active users to 578 million, which is an all-time record.
Snapchat continues to evolve as a visual-first social media platform with strong traction among Gen Z users. In the second quarter of 2025, Snapchat’s global community reached 469 million daily active users (DAU), up 8.6% year over year. Snapchat added 9 million DAU on a quarter-over-quarter basis.
RDDT’s Share Price Performance, Valuation, and Estimates
RDDT’s shares have gained 22.9% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 21.6% and the Internet - Software industry’s appreciation of 17.1%.
RDDT Stock's Performance
Image Source: Zacks Investment Research
RDDT shares are overvalued, with a forward 12-month Price/Sales of 14.36X compared with the Computer & Technology sector’s 6.83X. RDDT has a Value Score of F.
Price/Sales (F12M)
Image Source: Zacks Investment Research
The consensus mark for 2025 earnings is pegged at $1.87 per share, which has increased by a penny in the past 30 days. This suggests 156.16% year-over-year growth.
Reddit Inc. Price and Consensus
Reddit Inc. price-consensus-chart | Reddit Inc. Quote
RDDT currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.