Reddit reported third‑quarter 2025 results with revenue of $585 million, a 68% year‑over‑year increase, and net income of $163 million, reflecting a 28% net margin. Earnings per share were $0.80, beating the consensus estimate of $0.52 by 55%. Adjusted EBITDA reached $236 million, a 40% margin. Sequentially, revenue grew 17% from the $500 million reported in Q2 2025, and net income rose 36% from the $120 million of the prior quarter.
The company guided fourth‑quarter revenue to $655 million to $665 million and adjusted EBITDA to $275 million to $285 million, both above consensus estimates of $638 million for revenue and $259 million for adjusted EBITDA. The guidance reflects continued momentum from AI‑enhanced advertising tools and data‑licensing deals with large AI firms.
User engagement metrics improved across the board: daily active unique users reached 116 million, up 19% year‑over‑year and 14% from Q2 2025; logged‑in daily active users were 50.2 million, up 14% year‑over‑year; logged‑out users were 65.8 million, up 24% year‑over‑year. Weekly active users totaled 444 million, indicating sustained community activity.
Segment revenue details show advertising revenue at $549 million, up 74% year‑over‑year, and other revenue at $36 million, up 7% year‑over‑year. Gross margin expanded to 91.0%. Geographic breakdowns reveal U.S. revenue of $480 million and international revenue of $105 million, underscoring the company’s global reach.
Management highlighted that the expansion of AI‑enhanced search, including the rollout of the Reddit Answers LLM‑based search product, has driven higher ad demand and improved cost efficiency through third‑party infrastructure partnerships. Data‑licensing agreements with AI companies have contributed to the growth in other revenue streams.
Competitive context shows Reddit remains among the top three U.S. sites, with its unique human‑generated content becoming a valuable resource for AI training. The company’s capital‑light model and focus on international expansion position it well to sustain growth, despite a noted slowdown in logged‑in user growth in the core U.S. market.
The company’s forward‑looking guidance and strong quarterly performance reinforce its strategy of leveraging AI to enhance monetization while deepening advertiser relationships and expanding its international user base.
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