Reddit, Inc.

Reddit grew revenue 69.4% to $2.2 billion, and the stock still trades at 100.4 times trailing earnings.

If you own Reddit, you own a very expensive ad business growing like a startup.

rddt

technology large cap updated jan 30, 2026
$231.01
market cap ~$43B · 52-week range $37–$283
xvary composite: 40 / 100 · below average
our overall rating — combines growth, value, risk, and momentum
Start here if you're new
what it is
Reddit runs giant online communities and sells ads and data access around the conversations people cannot stop having.
how it gets paid
Last year Reddit made $2.2B in revenue. U.S. advertising was the main engine at $1.54B, or 70% of sales.
why it's growing
Revenue grew 69.4% last year. Average daily active users rose 19%, to 116 million.
what just happened
Revenue hit $1.5B, up 152% vs. prior year, with EPS of $1.38.
At a glance
B balance sheet — gets the job done, barely
100.4x trailing p/e — you're paying up for this one
26.5% return on capital — every dollar works hard here
$3.50 fy2026 eps est
$5B fy2028 rev est
xvary composite: 40/100 — below average
What they do
Reddit runs giant online communities and sells ads and data access around the conversations people cannot stop having.
Reddit wins because your weirdest interests already live there, in millions of topic-specific communities. It had 116 million daily active users in Q3 2025, up 19% vs. prior year. Network effects (more users create more content) → more answers for your niche question → advertisers and AI buyers have to go where the conversations already are.
technology large-cap digital-advertising ai-data-licensing social-platform
How they make money
$2.2B annual revenue · their business grew +69.4% last year
U.S. advertising
$1.54B
International advertising
$0.44B
Data licensing
$0.13B
Other revenue
$0.09B
The products that matter
performance advertising marketplace
Reddit Ads
$1.8B · 82% of revenue
This segment generated 82% of the company's $2.2B revenue last year and grew 22%. In human-speak: this is still the engine paying the bills.
core revenue
AI training data sales
Data API & Licensing
$400M · 18% of revenue
This segment is $400M based on the revenue mix shown here, and the page references a reported $60M annual Google contract. Small today. Important because the margin profile looks better than ads and the valuation already knows it.
high-margin bet
Key numbers
116M
daily users
That is the audience advertisers pay for. Daily active users → people who show up every day → more ad inventory and better pricing.
69.4%
revenue growth
Reddit is not being priced like a normal ad platform. It is being priced like hypergrowth, and 69.4% is the proof.
28.0%
operating margin
Operating margin → profit after running the business → so what: Reddit is already profitable while still growing fast.
100.4x
trailing p/e
P/E → price versus last year's profit → so what: the market already expects years of strong execution.
Financial health
B
strength
  • balance sheet grade B — adequate — nothing special
  • risk rank 4 — safer than 20% of stocks
  • long-term debt $18M (0% of capital)
  • net profit margin 21.4% — keeps 21 cents of every dollar in revenue
  • return on equity 27% — $0.27 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market

Return history isn't available for RDDT right now.

same standard. no invented return math.

source: institutional data · return history unavailable
What just happened
beat estimates
Revenue hit $1.5B, up 152% vs. prior year, with EPS of $1.38.
The business is getting paid twice: more people showed up, with daily active users up 19% to 116 million in Q3 2025, and average revenue per user climbed over 40%. That is user growth plus better monetization at the same time.
$550M
revenue
$1.38
eps
90%+
gross margin
the number that mattered
Average revenue per user rose over 40% in Q3 2025. That tells you Reddit is not just attracting traffic. It is getting better at charging for it.
source: company earnings report, 2026

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What could go wrong

Reddit's risk stack is unusually specific: ad dependence, premium valuation, and a newer licensing line the market already treats like a second engine.

∘
med
Growth guide step-down meets a 100.4x multiple
Q1 2026 guidance of 52%–54% growth is slower than the 70% growth Reddit just posted. For most companies that would look excellent. For this stock, it is a stress test.
If growth keeps decelerating, the multiple can compress even while the business still looks healthy on paper.
∘
med
Ads still carry the quarter
Advertising generated $1.8B of the $2.2B revenue shown on this page, or 82% of the total. Data licensing gets the narrative premium. Ads still do the heavy lifting.
If ad demand softens, the smaller licensing segment is not yet large enough to absorb the hit.
∘
med
Licensing optimism can outrun licensing proof
The page cites a reported $60M annual Google contract as part of the licensing story. That proves demand exists. It does not prove this becomes broad, durable, and diversified at scale.
If licensing stalls at a handful of headline deals, the stock starts looking like a very expensive ad platform again.
A company can execute well and still disappoint the stock. At 100.4x earnings, Reddit does not get rewarded for good. It gets rewarded for staying exceptional.
source: institutional data · regulatory filings · risk analysis
Pay attention to
next report
Q1 2026 earnings
Expected May 7, 2026. The number that matters is whether revenue lands inside the 52%–54% growth guide and whether management talks about that range like a floor or the new normal.
monetization
ARPU versus user growth
Average revenue per user rose more than 40% while daily active users rose 19% to 116M. If that spread narrows sharply, part of the earnings-scaling story fades.
concentration
Data licensing durability
Watch for updates on major AI contracts. A reported $60M annual deal sounds great until you ask how many deals like that exist and how long they last.
capital return
$1B buyback execution
Repurchase pace tells you whether management sees the stock as actually attractive at current prices or just worth supporting after a big run.
Analyst rankings
risk profile
below average
risk rank 4 — more volatile than most — brace for bigger swings.
source: institutional data
Institutional activity

institutions have been net buying for 3 consecutive quarters — 510 buyers vs. 275 sellers in 3q2025. net buying for 3 quarters.

source: institutional data · 1q2025-3q2025
source: institutional data
Price targets
3-5 year target range
$161 $408
$231 current price
$285 target midpoint · +23% from current · 3-5yr high: $260 (+15% · 3% ann'l return)
source: institutional data · analyst targets

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