Reddit beats Q4 revenue estimates on strength in ad sales
Overview
Online community platform's Q4 revenue rose 70% yr/yr, beating analyst expectations
Net income for Q4 was $252 mln, exceeding analyst estimates
Company announced $1 bln share repurchase program
Outlook
Reddit expects Q1 2026 revenue between $595 mln and $605 mln
Company forecasts Q1 2026 adjusted EBITDA between $210 mln and $220 mln
Reddit focuses on global expansion and product innovation for future growth
Result Drivers
AD REVENUE GROWTH - Q4 ad revenue increased 75% yr/yr to $690 mln, contributing significantly to total revenue growth
DAILY ACTIVE UNIQUES - DAUq increased 19% yr/yr to 121.4 mln, indicating strong user engagement
GLOBAL EXPANSION - CEO Steve Huffman emphasized global expansion and product innovation as central to Reddit's growth strategy
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q4 Revenue | Beat | $726 mln | $665.44 mln (23 Analysts) |
Q4 Net Income | Beat | $252 mln | $193.23 mln (18 Analysts) |
Q4 Adjusted EBITDA | Beat | $327 mln | $286.09 mln (23 Analysts) |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 19 "strong buy" or "buy", 9 "hold" and 1 "sell" or "strong sell"
The average consensus recommendation for the online services peer group is "buy"
Wall Street's median 12-month price target for Reddit Inc is $250.00, about 63.7% above its February 4 closing price of $152.69
The stock recently traded at 41 times the next 12-month earnings vs. a P/E of 60 three months ago
Press Release: ID:nBw4b24LQa
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