Reddit Announces Third Quarter 2025 Results
SAN FRANCISCO--( BUSINESS WIRE)--Reddit, Inc. (NYSE: RDDT) today announced financial results for the quarter ended September 30, 2025. Reddit’s complete financial results and management commentary can be found in its shareholder letter on Reddit’s Investor Relations website at https://investor.redditinc.com.
“Reddit provides something rare on the Internet,” said Steve Huffman, Reddit Co-Founder and CEO. “444 million people come here each week for authentic conversations they can’t find anywhere else, and increasingly, for engagement with brands, institutions and publishers.”
Third Quarter 2025 Financial Highlights
Three months ended
September 30,
(in millions, except percentages and per share amounts; unaudited)
2025
2024
% Change
Revenue
$
585
$
348
68
%
U.S.
$
480
$
288
67
%
International
$
105
$
60
74
%
GAAP gross margin
91.0
%
90.1
%
Net income
$
163
$
30
Net margin
27.8
%
8.6
%
Net income per share
Basic
$
0.87
$
0.18
Diluted
$
0.80
$
0.16
Adjusted EBITDA*
$
236
$
94
Adjusted EBITDA margin*
40.3
%
27.0
%
Net cash provided by (used in) operating activities
$
185
$
72
Free Cash Flow*
$
183
$
70
Cash, cash equivalents, and marketable securities
$
2,226
*The definitions of Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow can be found in the Use of Non-GAAP Financial Measures section of this release. A reconciliation of non-GAAP financial measures to the most directly comparable U.S. GAAP measure can be found on pages 10-11.
Financial Outlook
The guidance provided below is based on Reddit’s current estimates and is not a guarantee of future performance. This guidance is subject to significant risks and uncertainties that could cause actual results to differ materially, including the risk factors discussed in Reddit’s reports on file with the Securities and Exchange Commission (the “SEC”). Reddit undertakes no duty to update any forward-looking statements or estimates, except as required by applicable law.
As we look ahead, we will share our internal thoughts on revenue and Adjusted EBITDA for the fourth quarter.
In the fourth quarter of 2025, we estimate:
Earnings Conference Call Information and Community Update
Reddit will host a conference call to discuss the results for the third quarter of 2025 on Thursday, October 30, 2025, at 2:00 p.m. PT / 5:00 p.m. ET. A live webcast of the call can be accessed on Reddit’s Investor Relations website at https://investor.redditinc.com and investor relations subreddit, r/RDDT, at https://www.reddit.com/r/RDDT/. A replay of the webcast and transcript will be available on the same websites following the conclusion of the conference call.
Reddit will solicit questions from the community in the investor relations subreddit, r/RDDT, at https://www.reddit.com/r/RDDT/ on Thursday, October 30, 2025, after the market closes, and post responses following the earnings call at Reddit’s Investor Relations website at https://investor.redditinc.com and r/RDDT at https://www.reddit.com/r/RDDT/.
Reddit uses the investor relations page on its website https://investor.redditinc.com, as well as the subreddits r/RDDT and r/reddit, available at https://www.reddit.com/r/RDDT/ and https://www.reddit.com/r/reddit/, respectively, as means of disclosing material non-public information and for complying with its disclosure obligation under Regulation FD.
Notes
1 The definitions of Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow can be found in the Use of Non-GAAP Financial Measures section of this release. A reconciliation of non-GAAP financial measures to the most directly comparable U.S. GAAP measure can be found on pages 10-11.
2 We have not provided a reconciliation to the forward-looking U.S. GAAP equivalent measures for our non-GAAP guidance due to uncertainty regarding, and the potential variability of, reconciling items. Therefore, a reconciliation of these non-GAAP guidance measures to their corresponding U.S. GAAP guidance measures is not available without unreasonable effort.
About Reddit
Reddit is a community of communities. It’s built on shared interests, passion, and trust, and is home to the most open and authentic conversations on the internet. Every day, Reddit users submit, vote, and comment on the topics they care most about. With 100,000+ active communities and 116 million daily active unique visitors, Reddit is one of the internet’s largest sources of information. For more information, visit www.redditinc.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Reddit's future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as "may," "will," "should," "expects," "plans," "anticipates," "going to," "could," "intends," "target," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these words or other similar terms or expressions that concern Reddit's expectations, strategy, priorities, plans or intentions. Forward-looking statements in this release include, but are not limited to, statements regarding Reddit’s future financial and operating performance and GAAP and non-GAAP guidance. Reddit's expectations and beliefs regarding these matters may not materialize, and actual results in future periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected, including those more fully described under the caption “Risk Factors” and elsewhere in documents that Reddit files with the SEC from time to time, including Reddit’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025, which is being filed with the SEC at or around the date hereof. The forward-looking statements in this release are based on information available to Reddit as of the date hereof, and Reddit undertakes no obligation to update any forward-looking statements, except as required by law.
A Note About Metrics
We define a daily active unique (“DAUq”) as a user whom we can identify with a unique identifier who has visited a page on the Reddit website, www.reddit.com, or opened a Reddit application at least once during a 24-hour period. Average DAUq for a particular period is calculated by adding the number of DAUq on each day of that period and dividing that sum by the number of days in that period.
We define a weekly active unique (“WAUq”) as a user whom we can identify with a unique identifier who has visited a page on the Reddit website, www.reddit.com, or opened a Reddit application at least once during a trailing seven-day period. Average quarterly WAUq for a particular period is calculated by adding the number of WAUq on each day of that period and dividing that sum by the number of days in that period.
We define average revenue per unique (“ARPU”) as quarterly revenue in a given geography divided by the average DAUq in that geography. For the purposes of calculating ARPU, advertising revenue in a given geography is based on the geographic location in which advertising impressions are delivered, as this approximates revenue based on user activity, while other revenue in a given geography is based on the billing address of the customer.
Use of Non-GAAP Financial Measures
We use certain non-GAAP financial measures to supplement our consolidated financial statements, which are presented in accordance with U.S. GAAP, to evaluate our core operating performance. These non-GAAP financial measures include Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, and Free Cash Flow margin. We use these non-GAAP financial measures to facilitate reviews of our operational performance and as a basis for strategic planning. By excluding certain items that are non-recurring or not reflective of the performance of our normal course of business, we believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance. Accordingly, we believe these non-GAAP financial measures are useful to investors and others because they allow investors to supplement their understanding of our financial trends and evaluate our ongoing and future performance in the same manner as management. However, there are a number of limitations related to the use of non-GAAP financial measures as they reflect the exercise of judgment by our management about which expenses are included or excluded in determining these non-GAAP measures. These non-GAAP measures should be considered in addition to, not as a substitute for or in isolation from, our financial results prepared in accordance with U.S. GAAP. Other companies, including companies in our industry, may calculate these non-GAAP financial measures differently or not at all, which reduces their usefulness as comparative measures.
A reconciliation is provided below for each historical non-GAAP financial measure to the most directly comparable financial measure stated in accordance with U.S. GAAP. Reddit encourages investors to review the related U.S. GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP financial measures, and not to rely on any single financial measure to evaluate Reddit’s business. We have not provided a reconciliation to the forward-looking GAAP equivalent measures for our non-GAAP guidance due to uncertainty regarding, and the potential variability of, reconciling items. Therefore, a reconciliation of these non-GAAP guidance measures to their corresponding GAAP guidance measures is not available without unreasonable effort.
Adjusted EBITDA is defined as net income (loss) excluding interest (income) expense, net, income tax expense (benefit), depreciation and amortization, stock-based compensation expense and related taxes, other (income) expense, net, and certain other non-recurring or non-cash items impacting net income (loss) that we do not consider indicative of our ongoing business performance. Other (income) expense, net consists primarily of realized gains and losses on sales of marketable securities, foreign currency transaction gains and losses, and other income and expense that are not indicative of our core operating performance. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. We consider the exclusion of certain non-recurring or non-cash items in calculating Adjusted EBITDA and Adjusted EBITDA margin to provide a useful measure for investors and others to evaluate our operating results in the same manner as management.
Free Cash Flow represents net cash provided by (used in) operating activities less purchases of property and equipment. Free Cash Flow margin is defined as Free Cash Flow divided by revenue. We believe that Free Cash Flow is useful to investors as a liquidity measure because it measures our ability to generate or use cash. Once our business needs and obligations are met, cash can be used to maintain a strong balance sheet and invest in future growth. Additionally, we believe that Free Cash Flow is an important measure since we use third-party infrastructure partners to host our services and therefore we do not incur significant capital expenditures to support revenue generating activities.
Reddit, Inc.
Key Operating Metrics by Geography
(in millions, except percentages and ARPU)
(unaudited)
Three months ended
September 30,
Nine months ended
September 30,
2025
2024
% Change
2025
2024
% Change
Revenue: Global
$
585.0
$
348.4
68
%
$
1,477.0
$
872.5
69
%
Revenue: U.S.
$
479.7
$
288.0
67
%
$
1,202.4
$
715.8
68
%
Revenue: International
$
105.3
$
60.4
74
%
$
274.6
$
156.7
75
%
Three months ended
September 30,
2025
2024
% Change
DAUq: Global
116.0
97.2
19
%
DAUq: U.S.
51.6
48.2
7
%
DAUq: International
64.4
49.0
31
%
Logged-in DAUq: Global
50.2
44.1
14
%
Logged-in DAUq: U.S.
23.1
21.5
7
%
Logged-in DAUq: International
27.1
22.7
19
%
Logged-out DAUq: Global
65.8
53.1
24
%
Logged-out DAUq: U.S.
28.5
26.7
7
%
Logged-out DAUq: International
37.3
26.3
42
%
WAUq: Global
443.8
365.4
21
%
WAUq: U.S.
187.8
178.0
6
%
WAUq: International
256.0
187.4
37
%
ARPU: Global
$
5.04
$
3.58
41
%
ARPU: U.S.
$
9.04
$
5.88
54
%
ARPU: International
$
1.84
$
1.32
39
%
Reddit, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
September 30,
2025
December 31,
2024
Assets
Current assets
Cash and cash equivalents
$
911,653
$
562,092
Marketable securities
1,314,170
1,278,717
Accounts receivable, net
487,634
349,534
Prepaid expenses and other current assets
56,122
33,058
Total current assets
2,769,579
2,223,401
Property and equipment, net
12,936
12,652
Operating lease right-of-use assets, net
22,469
23,249
Intangible assets, net
18,000
25,424
Goodwill
42,174
42,174
Other noncurrent assets
11,218
9,695
Total assets
$
2,876,376
$
2,336,595
Liabilities and stockholders’ equity (deficit)
Current liabilities
Accounts payable
$
73,053
$
45,423
Operating lease liabilities
6,872
6,137
Accrued expenses and other current liabilities
148,400
124,464
Total current liabilities
228,325
176,024
Operating lease liabilities, noncurrent
18,162
20,565
Other noncurrent liabilities
19,226
9,257
Total liabilities
265,713
205,846
Commitments and contingencies
Stockholders’ equity (deficit):
Preferred stock
—
—
Class A common stock
14
12
Class B common stock
5
5
Class C common stock
—
—
Additional paid-in capital
3,529,552
3,331,546
Accumulated other comprehensive income (loss)
3,812
24
Accumulated deficit
(922,720
)
(1,200,838
)
Total stockholders’ equity (deficit)
2,610,663
2,130,749
Total liabilities and stockholders’ equity (deficit)
$
2,876,376
$
2,336,595
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
Three months ended
September 30,
Nine months ended
September 30,
2025
2024
2025
2024
Revenue
$
584,911
$
348,351
$
1,476,899
$
872,498
Costs and expenses:
Cost of revenue
52,509
34,633
135,498
91,750
Research and development
196,379
166,701
584,260
746,508
Sales and marketing
128,707
74,510
340,011
270,063
General and administrative
68,774
65,653
206,974
377,617
Total costs and expenses
446,369
341,497
1,266,743
1,485,938
Income (loss) from operations
138,542
6,854
210,156
(613,440
)
Other income (expense), net
22,035
22,968
63,716
58,246
Income (loss) before income taxes
160,577
29,822
273,872
(555,194
)
Income tax expense (benefit)
(2,086
)
(31
)
(4,246
)
118
Net income (loss)
$
162,663
$
29,853
$
278,118
$
(555,312
)
Net income (loss) per share attributable to Class A and Class B common stock
Basic
$
0.87
$
0.18
$
1.50
$
(4.12
)
Diluted
$
0.80
$
0.16
$
1.38
$
(4.12
)
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders
Basic
188,041,632
169,169,922
185,178,360
134,723,892
Diluted
202,727,809
192,322,916
201,659,094
134,723,892
Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Three months ended
September 30,
Nine months ended
September 30,
2025
2024
2025
2024
Cash flows from operating activities
Net income (loss)
$
162,663
$
29,853
$
278,118
$
(555,312
)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization
3,900
3,969
11,797
11,482
Non-cash operating lease cost
1,537
1,453
4,519
4,041
Amortization of premium (accretion of discount) on marketable securities, net
(6,779
)
(12,393
)
(22,354
)
(31,884
)
Stock-based compensation expense
83,518
74,758
258,002
716,532
Other adjustments
709
(4,665
)
668
(4,039
)
Changes in operating assets and liabilities:
Accounts receivable
(80,997
)
(44,108
)
(138,754
)
(38,914
)
Prepaid expenses and other assets
2,934
8,416
(23,424
)
(11,766
)
Operating lease right-of-use assets and liabilities
(2,038
)
(1,378
)
(5,407
)
(2,688
)
Accounts payable
7,995
442
26,940
16,484
Accrued expenses and other liabilities
11,717
15,275
33,963
28,135
Net cash provided by (used in) operating activities
$
185,159
$
71,622
$
424,068
$
132,071
Cash flows from investing activities
Purchases of property and equipment
(2,058
)
(1,353
)
(3,542
)
(5,406
)
Purchases of marketable securities
(544,101
)
(428,225
)
(1,605,404
)
(1,425,737
)
Maturities of marketable securities
563,460
447,302
1,581,054
1,043,361
Proceeds from sale of marketable securities
—
—
12,372
—
Cash paid for acquisitions, net of cash acquired
—
(17,137
)
—
(17,137
)
Other investing activities
(788
)
7,356
2,455
7,329
Net cash provided by (used in) investing activities
$
16,513
$
7,943
$
(13,065
)
$
(397,590
)
Cash flows from financing activities
Proceeds from issuance of Class A common stock in initial public offering, net of underwriting discounts and commissions
—
—
—
600,022
Proceeds from exercise of employee stock options
6,013
38,001
20,500
62,933
Taxes paid related to net share settlement of restricted stock units
(28,595
)
(65,800
)
(80,495
)
(268,106
)
Payments of initial public offering costs
—
(2,162
)
—
(8,500
)
Other financing activities
(1,497
)
(1,661
)
(1,497
)
(6,111
)
Net cash provided by (used in) financing activities
$
(24,079
)
$
(31,622
)
$
(61,492
)
$
380,238
Net increase (decrease) in cash, cash equivalents, and restricted cash
177,593
47,943
349,511
114,719
Cash, cash equivalents, and restricted cash at the beginning of the period
734,060
468,002
562,142
401,226
Cash, cash equivalents, and restricted cash at the end of the period
$
911,653
$
515,945
$
911,653
$
515,945
Cash and cash equivalents
911,653
515,895
911,653
515,895
Restricted cash
—
50
—
50
Total cash, cash equivalents, and restricted cash
$
911,653
$
515,945
$
911,653
$
515,945
Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin
(in thousands, except percentages)
(unaudited)
Three months ended
September 30,
Nine months ended
September 30,
2025
2024
2025
2024
Net income (loss)
$
162,663
$
29,853
$
278,118
$
(555,312
)
Add (deduct):
Interest (income) expense, net
(22,305
)
(21,155
)
(63,775
)
(57,543
)
Income tax expense (benefit)
(2,086
)
(31
)
(4,246
)
118
Depreciation and amortization
3,900
3,969
11,797
11,482
Stock-based compensation expense and related taxes
93,565
83,326
296,074
745,635
Other (income) expense, net
270
(1,813
)
59
(703
)
Adjusted EBITDA
$
236,007
$
94,149
$
518,027
$
143,677
Net margin
27.8
%
8.6
%
18.8
%
(63.6
)%
Adjusted EBITDA margin
40.3
%
27.0
%
35.1
%
16.5
%
Reddit, Inc.
Reconciliation of Free Cash Flow and Free Cash Flow Margin
(in thousands, except percentages)
(unaudited)
Three months ended
September 30,
Nine months ended
September 30,
2025
2024
2025
2024
Net cash provided by (used in) operating activities
$
185,159
$
71,622
$
424,068
$
132,071
Less:
Purchases of property and equipment
(2,058
)
(1,353
)
(3,542
)
(5,406
)
Free Cash Flow
$
183,101
$
70,269
$
420,526
$
126,665
Operating cash flow margin
31.7
%
20.6
%
28.7
%
15.1
%
Free Cash Flow margin
31.3
%
20.2
%
28.5
%
14.5
%