What's Happening?
Reddit has reported a substantial increase in revenue, with a 78% year-over-year growth, reaching $500 million in Q2 2025. The company's stock has surged by approximately 70% in 2025, closing at $237.45 on September 23, 2025. Reddit's advertising sales, which constitute 93% of total revenue, increased by 84% year-over-year. The company is in talks with Google to revise their $60 million data-licensing deal, aiming for a dynamic pricing model tied to AI usage. Reddit's user metrics show a 21% increase in daily active uniques, with international growth outpacing the U.S. CEO Steve Huffman emphasizes the company's momentum and focus on global scaling.
Why It's Important?
Reddit's impressive revenue growth and stock performance underscore its strong position in the tech industry, particularly in advertising and AI integration. The company's ability to monetize its platform effectively is reflected in the increased average revenue per user (ARPU) in the U.S. Reddit's negotiations with Google for a revised data-licensing deal highlight its strategic focus on leveraging AI for future growth. The company's expansion into AI-driven tools and partnerships with major tech firms positions it as a key player in the evolving digital landscape. Reddit's inclusion in the Russell 3000 and potential S&P 500 listing further enhance its market profile.
What's Next?
Reddit's Q3 2025 outlook projects continued revenue growth, with expectations of $535-545 million and adjusted EBITDA of $185-195 million. Analysts anticipate a Q3 EPS of around $0.50, indicating sustained profitability. The company's ongoing talks with Google could lead to enhanced AI capabilities and revenue streams. Reddit's strategic initiatives, including the rollout of AI tools and publisher-focused features, aim to boost engagement and monetization. As Reddit scales its operations, both retail and institutional investors are closely monitoring its performance, with many analysts predicting further stock price increases.
