Reddit’s (NYSE:RDDT) Q1 CY2026: Strong Sales, Stock Soars
Online community and discussion platform Reddit (NYSE:RDDT) reported Q1 CY2026 results exceeding the market’s revenue expectations , with sales up 69.1% year on year to $663.4 million. Guidance for next quarter’s revenue was better than expected at $720 million at the midpoint, 1.3% above analysts’ estimates. Its GAAP profit of $1.01 per share was 79.1% above analysts’ consensus estimates. Is now the time to buy Reddit? Find out in our full research report. Reddit (RDDT) Q1 CY2026 Highlights: Revenue: $663.4 million vs analyst estimates of $609.7 million (69.1% year-on-year growth, 8.8% beat) EPS (GAAP): $1.01 vs analyst estimates of $0.56 (79.1% beat) Adjusted EBITDA: $266 million vs analyst estimates of $225.6 million (40.1% margin, 17.9% beat) Revenue Guidance for Q2 CY2026 is $720 million at the midpoint, above analyst estimates of $710.6 million EBITDA guidance for Q2 CY2026 is $290 million at the midpoint, above analyst estimates of $282.8 million Operating Margin: 27.6%, up from 1% in the same quarter last year Free Cash Flow Margin: 46.9%, up from 36.3% in the previous quarter Domestic Daily Active Visitors: 126.8 million, up 76.7 million year on year Market Capitalization: $28.43 billion “Reddit is a one-of-one business powered by deeply engaged communities and authentic human conversation,” said Steve Huffman, Founder and CEO of Reddit. Company Overview Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes. Revenue Growth A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Reddit’s sales grew at an incredible 53.5% compounded annual growth rate over the last three years. Its growth surpassed the average consumer internet company and shows its offerings resonate with customers, a great starting point for our analysis. Reddit Quarterly Revenue This quarter, Reddit reported magnificent year-on-year revenue growth of 69.1%, and its $663.4 million of revenue beat Wall Street’s estimates by 8.8%. Company management is currently guiding for a 44.1% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 34.6% over the next 12 months, a deceleration versus the last three years. Despite the slowdown, this projection is commendable and suggests the market is forecasting success for its products and services. WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it. This is what the early days of Palantir looked like before it became a $437 billion giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE. Domestic Daily Active Visitors User Growth As a social network, Reddit generates revenue growth by increasing its user base and charging advertisers more for the ads each user is shown. Over the last two years, Reddit’s domestic daily active visitors, a key performance metric for the company, increased by 38.8% annually to 126.8 million in the latest quarter. This growth rate is among the fastest of any consumer internet business and indicates its offerings have significant traction. In Q1, Reddit added 76.7 million domestic daily active visitors, leading to 153% year-on-year growth. The quarterly print was higher than its two-year result, suggesting its new initiatives are accelerating user growth. Revenue Per User Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns from the ads shown to its users. ARPU can also be a proxy for how valuable advertisers find Reddit’s audience and its ad-targeting capabilities. Reddit’s ARPU growth has been exceptional over the last two years, averaging 34.8%. Its ability to increase monetization while growing its domestic daily active visitors at an impressive rate reflects the strength of its platform, as its users are spending significantly more than last year. Reddit ARPU This quarter, Reddit’s ARPU clocked in at $5.23. It declined 16.6% year on year, worse than the change in its domestic daily active visitors. Key Takeaways from Reddit’s Q1 Results We were impressed by how significantly Reddit blew past analysts’ revenue and EBITDA expectations this quarter. We were also glad its revenue and EBITDA guidance for next quarter both beat Wall Street's estimates. The stock traded up 8.5% to $161.23 immediately following the results. Reddit put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
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