Reddit (RDDT) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue surged 69% year-over-year to $663–$663.4 million, driven by strong advertising growth and user engagement initiatives.

• Net income reached $204 million, a significant increase from the prior year, with diluted EPS up 677% to $1.01.

• Daily Active Uniques (DAUq) grew 17% year-over-year to 126.8 million, with global ARPU up 44% to $5.23.

• Adjusted EBITDA margin was 40%–40.1%, with adjusted EBITDA up 131% to $266 million and record free cash flow exceeding $311 million.

• Cash, cash equivalents, and marketable securities totaled $2.8 billion at quarter end.

Financial highlights

• Advertising revenue rose 74% year-over-year, with U.S. revenue up 67% to $525.6–$526 million and international revenue up 76% to $137.9–$138 million.

• Gross margin improved to 91.5%, up 97 basis points year-over-year.

• Operating cash flow was $312–$312.3 million, up 145% year-over-year; free cash flow margin was 46.9%.

• CapEx remained low at $1 million (0.2% of revenue); stock-based compensation was $68.3–$79 million, down sequentially.

• Net income margin was 30.7%–30.8% for Q1 2026.

Outlook and guidance

• Q2 2026 revenue expected between $715 million and $725 million, representing 43%–45% year-over-year growth.

• Q2 adjusted EBITDA projected at $285 million–$295 million, with a margin of 40% at midpoint.

• Management expects continued investment in international growth, product innovation, and AI integration.

• Stock-based compensation expense anticipated to rise in Q2 due to annual stock refresh grants.

• Guidance subject to significant risks and uncertainties, including those detailed in SEC filings.