REDDIT Stock Price, News & Analysis

Reddit, Inc. (NYSE: RDDT) operates an internet content and information platform built around online communities and user-generated discussions. Often described as a "community of communities," Reddit is organized into topic-based forums where people submit posts, vote, and comment on subjects they care about. According to company disclosures, Reddit hosts more than 100,000 active communities and has tens of millions of daily active unique visitors, making it one of the internet’s larger sources of information and conversation.

Reddit’s model centers on interest-based communities and open discussion. The company highlights that its platform is built on shared interests, passion, and trust, and that it is home to what it describes as open and authentic conversations on the internet. Users participate by submitting content, voting on posts and comments, and engaging in discussions across a wide range of topics. This activity is organized into specialized communities, which Reddit refers to as interest-based, intent-driven communities.

Reddit generates revenue from multiple sources. In its shareholder communications and earnings releases, the company identifies advertising revenue and other revenue as key categories. Advertising revenue is associated with impressions delivered to users in specific geographies, while other revenue is tied to customers’ billing addresses. In addition, the Polygon description notes that Reddit generates revenue through advertising, Premium Memberships, and data licensing agreements. The company also reports and discusses non-GAAP financial measures such as Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, and Free Cash Flow margin as tools for evaluating its operating performance.

Reddit reports several operating metrics that are specific to its platform. It defines a daily active unique ("DAUq") as a user with a unique identifier who visits a Reddit web page or opens a Reddit application at least once during a 24-hour period. A weekly active unique ("WAUq") is defined as a uniquely identified user who visits Reddit or opens an app at least once during a trailing seven-day period. The company also uses average revenue per unique ("ARPU"), calculated as quarterly revenue in a given geography divided by the average DAUq in that geography. These metrics are presented by geography, including U.S. and international segments.

In its earnings materials for multiple quarters, Reddit emphasizes growth in DAUq, WAUq, revenue, and ARPU across U.S. and international markets. The company discloses logged-in and logged-out DAUq, reflecting engagement from users who are signed in as well as those who access content without logging in. Management commentary in these releases highlights the importance of community-driven conversation, human perspectives, and trusted information as central elements of Reddit’s platform.

Reddit is headquartered in San Francisco, California, and is classified in the Communication Services sector under the Internet Content & Information industry. The company’s Class A common stock trades on the New York Stock Exchange under the ticker symbol RDDT. Reddit has also disclosed that it is set to join the Russell 3000 Index as part of a broad-market index reconstitution, reflecting its inclusion in a widely followed equity benchmark.

In addition to its core platform operations, Reddit maintains a capital structure that includes a revolving credit facility. According to a Form 8-K filing, the company entered into an Amended and Restated Credit and Guarantee Agreement that extends the maturity of its revolving credit facility, sets total commitments at a specified level, maintains a letter of credit sublimit, and modifies financial covenants, including a maximum total leverage ratio. The agreement includes covenants that restrict activities such as incurring additional debt, granting liens, engaging in certain affiliate transactions, selling assets, making investments, paying dividends, and making other restricted payments. The facility is primarily secured by liens on substantially all of the company’s assets, including intellectual property, with provisions for guarantees and collateral to fall away upon the achievement of certain investment grade ratings from two rating agencies.

Reddit’s financial reporting includes consolidated balance sheets, statements of operations, and cash flow information. The company reports cash, cash equivalents, and marketable securities, accounts receivable, property and equipment, operating lease right-of-use assets, intangible assets, goodwill, and other noncurrent assets. On the liabilities side, Reddit reports accounts payable, accrued expenses and other current liabilities, operating lease liabilities, and other noncurrent liabilities. The company also reports stockholders’ equity, including Class A and Class B common stock, additional paid-in capital, accumulated other comprehensive income (loss), and accumulated deficit.

Management uses non-GAAP financial measures to supplement U.S. GAAP results. Adjusted EBITDA is defined as net income (loss) excluding interest income or expense, income tax expense or benefit, depreciation and amortization, stock-based compensation expense and related taxes, other income or expense, and certain other non-recurring or non-cash items. Adjusted EBITDA margin is Adjusted EBITDA divided by revenue. Free Cash Flow is defined as net cash provided by (or used in) operating activities less purchases of property and equipment, and Free Cash Flow margin is Free Cash Flow divided by revenue. Reddit states that these measures are used for evaluating operational performance and strategic planning, while also noting limitations of non-GAAP metrics and encouraging investors to consider them alongside GAAP results.

Reddit’s public communications, including press releases and shareholder letters, emphasize the role of its communities in providing human conversation and knowledge. The company describes its platform as a place where people seek real opinions from real people and where brands, institutions, and publishers increasingly engage with users. Reddit characterizes its communities as a significant corpus of human conversation on the internet, and notes that advertisers can reach users across more than 100,000 authentic interest-based communities.

Business model and revenue sources

According to Reddit’s earnings releases and the Polygon description, the company’s business model is built around monetizing user engagement and content through advertising, Premium Memberships, and data licensing agreements, along with other revenue streams disclosed in its financial statements. Advertising revenue is associated with the geographic location where advertising impressions are delivered, while other revenue is based on customer billing addresses. The company also highlights partnerships that support advertisers, such as expanded third-party measurement capabilities that provide independent analysis on viewability and invalid traffic for campaigns on Reddit.

Reddit’s use of third-party measurement and reporting tools, as described in partnership announcements, is intended to give advertisers transparency into campaign performance, content adjacency, and brand safety and suitability. These tools can provide content-level insights and reporting on metrics such as viewability and invalid traffic across Reddit’s feed, conversation, and takeover placements. Reddit also references its own user and brand safety investments, which include human moderators, AI-driven moderation tools, brand safety content detection, and customizable brand suitability controls.

Key operating metrics and geographic breakdown

Reddit discloses key operating metrics by geography, including revenue, DAUq, WAUq, and ARPU for global, U.S., and international segments. Earnings materials provide tables that show revenue growth rates, changes in DAUq and WAUq, and ARPU trends over time. The company reports logged-in and logged-out DAUq to distinguish between engagement from registered users and visitors who are not logged in. These metrics are used by management and investors to evaluate user engagement, monetization per user, and geographic performance.

Reddit’s financial highlights across multiple quarters show year-over-year growth in revenue and DAUq, along with expansion in gross margin and changes in net income or loss. The company also reports Adjusted EBITDA and Free Cash Flow, along with their respective margins, and provides reconciliations of these non-GAAP measures to the most directly comparable GAAP measures in its earnings materials.

Capital structure and credit facility

In its Form 8-K filing related to the Amended and Restated Credit and Guarantee Agreement, Reddit describes a revolving credit facility with total commitments, a letter of credit sublimit, and financial covenants. The agreement extends the maturity date of the revolving credit facility, adjusts total commitments, maintains the letter of credit sublimit, removes certain credit spread adjustments applicable to interest rate calculations, and transitions to a maximum total leverage ratio after a specified date. Covenants in the agreement restrict various corporate actions, and the facility is secured by liens on substantially all of Reddit’s assets, including intellectual property, with provisions for the fall away of guarantees and collateral upon the achievement of specified investment grade ratings.

Index inclusion and market presence

Reddit has announced that it is set to join the Russell 3000 Index as part of a reconstitution of the Russell indexes. The company notes that it debuted on public markets under the symbol RDDT and describes itself as one of the most visited websites in the world, with more than 100,000 communities and a large corpus of human conversation. Inclusion in the Russell 3000 Index places Reddit within a broad-market benchmark used by investment managers and institutional investors.

FAQs about Reddit, Inc. (RDDT)

• What does Reddit, Inc. do?
  Reddit, Inc. operates an online platform organized into communities where users submit, vote, and comment on content related to their interests. The company describes Reddit as a community of communities built on shared interests, passion, and trust, and as a source of open and authentic conversations on the internet.
• How does Reddit generate revenue?
  According to the company’s financial disclosures and the Polygon description, Reddit generates revenue primarily through advertising, Premium Memberships, data licensing agreements, and other revenue reported in its financial statements. Advertising revenue is based on the geographic location where ad impressions are delivered, while other revenue is tied to customer billing addresses.
• What are DAUq and WAUq on Reddit?
  Reddit defines a daily active unique (DAUq) as a user with a unique identifier who visits a Reddit web page or opens a Reddit application at least once during a 24-hour period. A weekly active unique (WAUq) is a uniquely identified user who visits Reddit or opens an app at least once during a trailing seven-day period. The company reports these metrics to show user engagement.
• What is ARPU for Reddit?
  Average revenue per unique (ARPU) is defined by Reddit as quarterly revenue in a given geography divided by the average DAUq in that geography. For ARPU calculations, advertising revenue is allocated based on where ad impressions are delivered, and other revenue is based on the customer’s billing address.
• On which exchange does Reddit trade and what is its ticker?
  Reddit’s Class A common stock trades on the New York Stock Exchange under the ticker symbol RDDT, as indicated in the company’s press releases and filings.
• In which sector and industry is Reddit classified?
  Reddit is classified in the Communication Services sector and the Internet Content & Information industry.
• Where is Reddit headquartered?
  Regulatory filings list Reddit’s principal executive offices in San Francisco, California.
• What non-GAAP financial measures does Reddit use?
  Reddit reports non-GAAP measures including Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, and Free Cash Flow margin. Adjusted EBITDA excludes items such as interest, income taxes, depreciation and amortization, stock-based compensation, certain other income or expense, and other non-recurring or non-cash items. Free Cash Flow is defined as net cash provided by (or used in) operating activities less purchases of property and equipment.
• What is Reddit’s revolving credit facility?
  According to a Form 8-K, Reddit entered into an Amended and Restated Credit and Guarantee Agreement that governs its revolving credit facility. The agreement extends the facility’s maturity date, sets total commitments and a letter of credit sublimit, removes certain credit spread adjustments, and introduces or modifies financial covenants, including a maximum total leverage ratio. The facility is primarily secured by liens on substantially all of Reddit’s assets, including intellectual property.
• Is Reddit included in any major stock indexes?
  Reddit has announced that it is set to be added to the Russell 3000 Index as part of a reconstitution of the Russell indexes. This inclusion reflects its presence in a broad-market benchmark used by many investment managers and institutional investors.