(Feb 6): Reddit Inc projected current-quarter sales that surpassed Wall Street’s expectations, a reflection on the company’s growing advertising business just two years in as a publicly traded company.
First-quarter revenue is expected to be US$595 million ($758.13 million) to US$605 million, the social media company said in a statement on Thursday. The average Wall Street estimate was US$577.3 million, according to Bloomberg-compiled data.
San Francisco-based Reddit’s fourth-quarter sales were also strong. The company reported US$726 million in revenue over the holiday period, marking a 70% increase year-on-year, and easily surpassing analysts’ estimates of US$666.7 million. The company saw even stronger sales growth abroad than in the US.
Reddit also announced a US$1 billion share buy-back programme, its first since the company’s early 2024 IPO. The shares rose as much as 12% on Thursday in extended trading after closing at US$151.04 in New York.
Reddit has made quick headway in expanding its advertising business. Last year marked the first in which the platform reported more than US$2 billion in sales — almost triple the company’s revenue two years prior — driven almost entirely by ads. That momentum has given executives confidence to authorise the share repurchase programme, said chief operating officer Jen Wong.
“We have the means to invest in growth, in M&A (mergers and acquisitions) and to do buy-backs,” Wong said in an interview. “I think that’s the power of our financial model and strong financial position.”
See also: Amazon says it will spend US$200 bil this year on AI build-out
Wong said that the company is always looking for deals that will bolster its advertising technology and bring in new machine learning capabilities and talent. “We are a growth company, so we are always looking for talent to help us make our products better,” she said.
Despite the strength of Reddit’s business, investors remain hopeful that the company will continue to diversify its revenue streams by reaching new licensing agreements with artificial intelligence companies seeking to make use of Reddit’s data. The company has already struck such deals with OpenAI and Alphabet Inc’s Google worth hundreds of millions of dollars, and has started discussions on a new potential deal with Google, Bloomberg reported in September.
Wong was reticent when asked about additional deals coming down the pike. “There’s nothing more to share on that front,” she said, noting the company remains focused on its core advertising business.
See also: Traders pile into tech hedges as rout in software stocks deepens
Reddit saw 121.4 million daily active users in the fourth quarter, just slightly ahead of Wall Street’s estimate of 120.2 million. Most of its daily active user growth in 2025 came from outside the US.
“Reddit’s quarter shows a platform growing up fast,” wrote Jeremy Goldman, a senior director at Emarketer. “Advertisers are getting clearer signals, better tools and more intent-rich moments, while users are engaging because the product is becoming more useful, not more intrusive.”
Uploaded by Tham Yek Lee
