Reddit delivered another quarter of rapid revenue growth and expanding profitability in the second quarter of 2026, as stronger advertising demand and higher monetization significantly outpaced growth in its user base.
Revenue increased 61% to $804.9 million from $499.6 million. The result marked Reddit’s eighth consecutive quarter of revenue growth exceeding 60%.
Advertising revenue increased 64% to $762 million and represented approximately 95% of total revenue.
Other revenue, which includes data licensing and additional commercial products, increased 24% to $43 million.
Reddit’s adjusted EBITDA more than doubled to $342.8 million from $166.7 million.
Adjusted EBITDA margin expanded to 42.6% from 33.4%, representing an improvement of 920 basis points.
The margin expansion indicates that Reddit converted a substantial portion of its incremental revenue into profit despite continued investments in engineering, advertising sales, and platform development.
Operating income increased to $231.7 million from $67.7 million, representing growth of approximately 242%.
Revenue grew by approximately $305.3 million, while total costs and expenses increased by $141.3 million.
Research and development expense increased 18% to $231.3 million.
Sales and marketing expense increased 62% to $195.9 million, approximately matching the company’s revenue growth rate. General and administrative expense increased 10% to $75.7 million.
Reddit maintained a GAAP gross margin of 91.3%, compared with 90.8% in the prior-year quarter.
The company’s high gross margin reflects its use of third-party infrastructure providers and comparatively low capital requirements.
Net income increased 183% to $252.8 million from $89.3 million.
Net margin expanded to 31.4% from 17.9%, while diluted earnings per share increased to $1.25 from $0.45.
Reddit generated those financial gains while continuing to expand its global audience.
Daily active uniques increased 18% to 130.3 million, while weekly active uniques increased 24% to 514.6 million, crossing half a billion for the first time.
Revenue therefore grew more than three times as quickly as daily active users.
Average revenue per unique increased 36% to $6.18 from $4.53, demonstrating that improved monetization contributed more to the revenue increase than audience growth alone.
U.S. revenue increased 56% to $638.1 million, while U.S. daily active uniques increased only 6% to 53.2 million.
U.S. average revenue per unique surged 51% to $11.85 from $7.87.
International revenue grew even faster, increasing 84% to $166.8 million.
International daily active uniques increased 28% to 77.1 million, while international average revenue per unique rose 31% to $2.26.
Despite the faster growth, international monetization remained substantially below the United States. U.S. average revenue per unique was more than five times the international figure.
This difference provides Reddit with a significant long-term opportunity if it can continue improving international advertising tools, advertiser demand, measurement, and market coverage.
Logged-out users remained the largest and fastest-growing portion of the audience.
Global logged-out daily active uniques increased 27% to 77.7 million and represented nearly 60% of the total daily audience.
Logged-in daily active uniques increased by a more modest 7% to 52.6 million.
International logged-out daily active uniques increased 41% to 47.6 million, accounting for most of Reddit’s overall user growth.
The performance illustrates the importance of people reaching Reddit posts through search engines, external links, artificial intelligence tools, and other discovery channels without signing into an account.
Reddit also said it crossed $1 million in revenue per employee.
The productivity milestone, combined with eight consecutive quarters of revenue growth above 60%, demonstrates the company’s ability to expand without increasing its workforce and operating infrastructure at the same rate as revenue.
Cash generation increased alongside profitability.
Operating cash flow rose 135% to $261.9 million from $111.3 million.
Free cash flow increased to $260.7 million from $110.8 million, producing a free cash flow margin of 32.4%.
Reddit generated nearly identical operating and free cash flow because it spent only approximately $1.1 million on property and equipment during the quarter.
The low capital intensity allows the company to convert a large percentage of its operating cash flow into cash available for acquisitions, investments, and capital returns.
Reddit ended June with approximately $2.79 billion in cash, cash equivalents, and marketable securities.
Cash and cash equivalents increased to approximately $1.49 billion from $953.6 million at the end of 2025.
The company repurchased 1.5 million shares for $234.6 million during the quarter at an average price of $157.57 per share.
However, fully diluted shares outstanding still increased 0.2% to 207 million, indicating that equity compensation and other potential share issuance offset most of the repurchase activity.
For the third quarter, Reddit expects revenue of between $860 million and $870 million.
Adjusted EBITDA is projected to range from $385 million to $395 million. At the midpoints, the outlook implies an adjusted EBITDA margin of approximately 45.1%, representing further expansion from the second quarter.
Reddit’s second-quarter results show that the company is no longer relying primarily on audience growth to drive its financial performance.
Higher advertising revenue per user, improving international monetization, high gross margins, and modest capital requirements are allowing earnings and cash flow to grow substantially faster than the audience.
KEY QUOTES:
“In an increasingly automated web, the value of real human perspective has never been higher.”
“Crossing $1 million in revenue per employee shows the strength of our community model and the value we deliver to advertisers.”
Steve Huffman, Founder And Chief Executive Officer Of Reddit
