+ Equity grants + Commission
Reddit operates as a global online platform of communities where users post, vote, and discuss content around shared interests. People create and participate in topic-based “subreddits,” and the platform’s upvote/downvote system determines what content rises to visibility. Content flows from user-generated posts, comments, and conversations, while the business model relies on advertising revenue, premium memberships, and virtual goods (Reddit Coins). The platform differentiates itself through its large, diverse communities and explicit voting mechanism that rewards engaging, relevant discussions and fosters authentic interactions. Reddit’s goal is to help people connect through open discussions across a wide range of topics, while monetizing the activity through ads, memberships, and digital goods.
Company Size
5,001-10,000
Company Stage
IPO
Headquarters
San Francisco, California
Founded
2005
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Comprehensive health benefits
Flexible unlimited vacation days & monthly global wellness days
Family planning funds & 4+ months paid parental leave
Personal & professional development funds
Paid volunteer time off
Workspace & home office benefits
Reddit stock has fallen 43% over the past year to around $153, despite strong revenue growth of 61% in Q2 2026 to $805 million. The social media platform is earning more from existing users, with average revenue per unique user up 36% year-over-year, but faces declining search referrals. Daily active users remained flat as gains from product improvements were offset by fewer visitors from search engines. Management expects continued volatility in search traffic and guided Q3 2026 revenue growth to 47-49%, down from 61% in Q2. Reddit is responding by improving its home feed to become a destination site rather than relying on search referrals. New app user retention rose 50% year-over-year, though from a small base. The company's CEO described the feed optimisation as requiring a year of work, with models currently well behind industry standards.
AppLovin and Reddit both operate in digital advertising but serve different markets. AppLovin focuses on mobile gaming marketing tools, whilst Reddit monetises its community-driven platform through ads and AI data licensing. In FY 2025, AppLovin generated nearly $5.5 billion in revenue, up 70% year-on-year, with net income of approximately $3.3 billion and a 60.8% net margin. The company divested its Apps business in June 2025 to focus on higher-margin software. Free cash flow reached nearly $3.9 billion. Reddit posted nearly $2.2 billion in revenue for FY 2025, growing 69.4% annually. The platform achieved its first full-year profit of roughly $529.7 million, yielding a 24.1% net margin, after losing over $484 million the previous year. Daily active users reached 130 million by mid-2026. AppLovin demonstrates stronger profitability metrics, whilst Reddit shows rapid growth from a smaller base.
Reddit's user growth accelerated sharply in August, with average users rising 8% month-on-month, according to data from Piper Sandler cited by Investing.com. This marked the strongest monthly growth rate for the year, reversing a 2% decline in July. International users drove the surge, growing 29.3% year-on-year, up from 19% in July. US users increased 5.2%, though growth in that segment continued to decelerate. The August uptick was primarily driven by Feed users, which added 79 million, whilst Conversation users declined by 1 million. Reddit crossed 500 million weekly active uniques in Q2, rising 24% year-on-year. Revenue grew 61% to $805 million, including an 84% increase in international revenue.
AppLovin and Reddit show distinct revenue growth patterns despite both relying on digital advertising. AppLovin generates revenue through its digital software suite, including AppDiscovery for mobile app marketing, whilst Reddit operates an internet platform for community discussions. For the quarter ended June 30, 2026, AppLovin reported $1.9 billion in revenue with a 78% operating margin. Reddit posted $804.9 million with a 29% operating margin for the same period. AppLovin's quarterly revenue has grown steadily from $835.2 million in Q3 2024 to $1.9 billion in Q2 2026. Reddit's revenue increased from $348.4 million to $804.9 million over the same period, though with more volatility. Both companies experience seasonal patterns, with advertiser spending typically increasing during fourth-quarter holiday shopping periods. Reddit recently joined the S&P 500 index and launched new automated campaign management tools for advertisers.
Reddit stock surged 9.3% to $158.10 following a Baird research note suggesting the market has already priced in the worst outcome for two AI data licensing contracts up for renewal in 2027. However, the note did not address Reddit's more pressing challenge: declining search referrals as AI systems change how users find content. While advertising generated 95% of Reddit's $805 million Q2 revenue, AI Overviews has yet to match traditional search traffic. Reddit holds a $30 billion market capitalisation on $2.78 billion in trailing twelve-month revenue. The company reaches over half a billion weekly users and 130 million daily users, targeting 1 billion daily users globally. The stock trades 42% below its 52-week high of $270.71.