Published Fri, Feb 6, 2026 · 06:30 AM
REDDIT forecast first-quarter revenue above analysts’ estimates on Thursday (Feb 5), as artificial intelligence-powered enhancements to its ad platform help the social media platform draw more marketers.
Shares of the company rose around 2 per cent in extended trading after it also announced its first share repurchase programme of up to US$1 billion, citing strong profitability and cash generation.
Reddit allows ad placement directly within subreddit discussion threads, driving advertiser spending on the platform as brands aim to reach highly engaged and niche communities that discuss topics relevant to their products and services.
Its ad platform uses AI to enhance campaign creation and management, with features including an AI copywriter that generates Reddit-specific ad copy and an image auto-crop tool for required aspect ratios on the platform.
The first-quarter revenue is expected to be between US$595 million and US$605 million, above analysts’ average estimate of US$577.2 million, according to data compiled by LSEG.
Its forecast of adjusted earnings before interest, taxes, depreciation and amortisation of US$210 million to US$220 million was above estimates of US$202.9 million.
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“Expectations were already high coming into the quarter, but the results still surprised by showing how tightly product momentum, advertiser demand, and user engagement are now reinforcing one another,” said Emarketer senior director Jeremy Goldman.
Reddit is ratcheting up competition with Meta by rolling out AI-powered Max campaigns in beta, which automate ad campaigns by adjusting bids to hit target cost-per-result as well as dynamically selecting headlines and creatives.
Facebook-owner Meta and Snapchat-parent Snap also reported upbeat fourth-quarter revenue.
Reddit’s fourth-quarter revenue rose 70 per cent to US$726 million, beating estimates of US$665.4 million. Its earnings per share of US$1.24 also exceeded estimates of 94 cents.
Daily active unique visitors rose 19 per cent, to 121.4 million in the quarter ended Dec 31, while its global average revenue per user increased by 42 per cent. REUTERS
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