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Reddit Q1 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise
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Key Takeaways
RDDT beat Q1 estimates with EPS up 676.9% and revenues rising 69.1% year over year.
Advertising drove growth, with ad revenues climbing 74% and dominating the total revenue mix.
Strong user growth and higher ARPU boosted monetization, while EBITDA more than doubled.
Reddit (RDDT - Free Report) delivered first-quarter 2026 earnings of $1.01 per share, which increased 676.9% year over year and beat the Zacks Consensus Estimate by 63.43%.
Revenues rose 69.1% from the year-ago quarter to $663.4 million and beat the consensus mark by 8.03%.
RDDT shares gained 13.70% in the pre-market trading after the company delivered impressive first-quarter results.
RDDT’s Q1 Top Line & Metrics in Detail
Geographically, growth stayed strong in both core markets. For the reported quarter, U.S. revenues (contributing 79% to revenues) surged 67.5% year over year to $526 million. International revenues (21% of revenues) soared 74.7% year over year to $138 million.
Advertising remained the engine of growth. Ad revenues climbed 74% year over year to $625 million, accounting for the vast majority of the top-line expansion. Other revenues increased 15% year over year to $39 million.
The quarter reflected strong monetization and scaling efficiency, with Daily Active Uniques averaging 126.8 million, up 17% year over year. U.S. DAUq increased 7% year over year to 53.5 million, whereas International DAUq grew 26% year over year to 73.3 million.
Reddit’s Engagement Trends Support Monetization Tailwinds
Weekly Active Uniques averaged 493.1 million, up 23% year over year. Growth was stronger internationally, where WAUq rose 33% to 296.6 million compared with a 10% increase in the United States to 196.5 million.
Average revenue per unique also moved higher. Global ARPU increased 44% year over year to $5.23, with U.S. ARPU up 54% to $9.63 and international ARPU rising 51% to $2.02, signaling improving monetization intensity across regions.
RDDT’s Expense Profile Keeps Margins Elevated
RDDT maintained very high gross profitability. Reddit reported a GAAP gross margin of 91.5%, expanding 100 bps on a year-over-year basis.
Operating expenses increased with continued investment. Sales and marketing expenses increased 67% year over year to $151.5 million. Research and development expenses rose 8.4% year over year to $207.2 million, while General and Administrative expenses decreased 5.6% year over year to $65.5 million.
First-quarter 2026 adjusted EBITDA was $266 million, up from $115 million reported in the year-ago quarter. In the reported quarter, the adjusted EBITDA margin was 40.1%.
RDDT’s Balance Sheet & Cash Flow
As of March 31, 2025, Reddit had cash and cash equivalents, including marketable securities, of $2.77 billion compared with $2.47 billion as of Dec. 31, 2025.
Operating cash flow increased to $312.3 million, and free cash flow reached $311.2 million. In the reported quarter, the free cash flow margin was 46.9%.
RDDT’s Q2 Outlook Remains Supportive
For the second quarter of 2026, management expects revenues to be in the range of $715 million to $725 million and adjusted EBITDA between $285 million and $295 million.
Shares of Analog Devices have gained 48.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Shares of Advanced Energy have surged 83.5% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results on May 4.
Arista Networks shares have gained 32% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.
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Reddit Q1 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise
Key Takeaways
Reddit (RDDT - Free Report) delivered first-quarter 2026 earnings of $1.01 per share, which increased 676.9% year over year and beat the Zacks Consensus Estimate by 63.43%.
Revenues rose 69.1% from the year-ago quarter to $663.4 million and beat the consensus mark by 8.03%.
RDDT shares gained 13.70% in the pre-market trading after the company delivered impressive first-quarter results.
RDDT’s Q1 Top Line & Metrics in Detail
Geographically, growth stayed strong in both core markets. For the reported quarter, U.S. revenues (contributing 79% to revenues) surged 67.5% year over year to $526 million. International revenues (21% of revenues) soared 74.7% year over year to $138 million.
Reddit Inc. Price, Consensus and EPS Surprise
Reddit Inc. price-consensus-eps-surprise-chart | Reddit Inc. Quote
Advertising remained the engine of growth. Ad revenues climbed 74% year over year to $625 million, accounting for the vast majority of the top-line expansion. Other revenues increased 15% year over year to $39 million.
The quarter reflected strong monetization and scaling efficiency, with Daily Active Uniques averaging 126.8 million, up 17% year over year. U.S. DAUq increased 7% year over year to 53.5 million, whereas International DAUq grew 26% year over year to 73.3 million.
Reddit’s Engagement Trends Support Monetization Tailwinds
Weekly Active Uniques averaged 493.1 million, up 23% year over year. Growth was stronger internationally, where WAUq rose 33% to 296.6 million compared with a 10% increase in the United States to 196.5 million.
Average revenue per unique also moved higher. Global ARPU increased 44% year over year to $5.23, with U.S. ARPU up 54% to $9.63 and international ARPU rising 51% to $2.02, signaling improving monetization intensity across regions.
RDDT’s Expense Profile Keeps Margins Elevated
RDDT maintained very high gross profitability. Reddit reported a GAAP gross margin of 91.5%, expanding 100 bps on a year-over-year basis.
Operating expenses increased with continued investment. Sales and marketing expenses increased 67% year over year to $151.5 million. Research and development expenses rose 8.4% year over year to $207.2 million, while General and Administrative expenses decreased 5.6% year over year to $65.5 million.
First-quarter 2026 adjusted EBITDA was $266 million, up from $115 million reported in the year-ago quarter. In the reported quarter, the adjusted EBITDA margin was 40.1%.
RDDT’s Balance Sheet & Cash Flow
As of March 31, 2025, Reddit had cash and cash equivalents, including marketable securities, of $2.77 billion compared with $2.47 billion as of Dec. 31, 2025.
Operating cash flow increased to $312.3 million, and free cash flow reached $311.2 million. In the reported quarter, the free cash flow margin was 46.9%.
RDDT’s Q2 Outlook Remains Supportive
For the second quarter of 2026, management expects revenues to be in the range of $715 million to $725 million and adjusted EBITDA between $285 million and $295 million.
RDDT Zacks Rank & Other Stocks to Consider
Reddit currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector include Analog Devices (ADI - Free Report) , Advanced Energy (AEIS - Free Report) and Arista Networks (ANET - Free Report) , each currently carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Analog Devices have gained 48.3% in the year-to-date period. Analog Devices is set to report the second quarter of fiscal 2026 results on May 20.
Shares of Advanced Energy have surged 83.5% in the year-to-date period. Advanced Energy is slated to report first-quarter 2026 results on May 4.
Arista Networks shares have gained 32% in the year-to-date period. Arista Networks is set to report first-quarter 2026 results on May 5.