Reddit Earnings Beat, Raises Third Quarter Revenue Outlook
Reddit earnings topped forecasts as management raised third-quarter revenue guidance, saying advertising growth and AI ad tools attracted marketers.
KEY TAKEAWAYS
- Reddit reported Q2 revenue up 61% year over year and a profit of $253 million.
- Management raised Q3 revenue guidance above Wall Street estimates, citing ad-stack improvements and AI ad products.
- Company said AI-powered advertising reduced advertiser friction and improved campaign economics for marketers.
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Reddit, Inc. (NYSE: RDDT) reported second-quarter 2026 results for the period ended June 30, 2026, in a press release on July 30. Sales rose 61.0% year over year, driven by advertising growth and user expansion, leading to a profit of $253 million. Management raised Q3 revenue guidance above Wall Street estimates, citing momentum from user growth, improvements to its advertising platform, and new AI-powered ad products.
Earnings Beat and Raised Outlook
Reddit’s second-quarter revenue significantly exceeded prior guidance and consensus forecasts, with sales up 61.0% year over year. The company posted a profit of $253 million, reflecting gains in advertising revenue and an expanding user base. Before the report, management had forecast Q2 revenue between $715 million and $725 million and adjusted EBITDA of $285 million to $295 million. Consensus estimates clustered near $730 million to $745 million in revenue and non-GAAP earnings per share of $0.97 to $0.99.
Alongside the earnings release, Reddit directed investors to a Q2 shareholder letter and supplemental materials for further details. Management issued Q3 revenue guidance above Wall Street estimates, attributing the outlook to continued user growth and enhancements in its advertising stack.
AI Advertising Drives Growth
Reddit emphasized AI-powered advertising and data products as key drivers of demand. The company highlighted automation in its ad platform as improving advertiser efficiency. On July 10, Reddit launched a beta version of “Reddit Community Intelligence,” an AI-powered ad creative generator designed to tailor campaigns to specific communities and reduce barriers for small and medium-size advertisers.
Third-party data showed advertisers using Reddit’s AI tools achieved a 17.0% reduction in cost per action and a 25.0% increase in conversions. Agency feedback indicated Reddit continued to gain market share in social-media advertising during the quarter, supported by its expanding AI-enabled self-service tools.
Analysts view the quarter and product rollout as reinforcing models projecting sustained high revenue growth and a path to materially higher profitability. One analyst projects Reddit could reach roughly 50.0% EBITDA margins and exceed 30.0% annual revenue growth through the mid-2020s.
