01—Abstract
Summary
Summary of the 10-Q filed May 1, 2026. Cited figures are marked; the original filing is the authoritative source.
Reddit, Inc. reported first-quarter 2026 revenue of $663.4 milliona, up 69% year-over-year from $392.4 million, with advertising revenue of $624.7 million (up 74%) and other revenue of $38.7 million.
Income from operations was $182.9 millionb versus $3.9 million a year earlier, and net income was $204.0 million, or $1.01 per diluted share, compared with $26.2 million ($0.13 per diluted share) in the prior-year quarter. Adjusted EBITDA was $266.0 million versus $115.3 million, and gross margin was 91.5% versus 90.5%. User metrics grew as well.
Daily Active Uniques (DAUq) were 126.8 million, up 17% year-over-year, and ARPU was $5.23c, up 44%. U.S. ARPU was $9.63 and rest-of-world ARPU was $2.02. Management attributed the DAUq growth to third-party search engine algorithm changes and growth initiatives such as machine translation, marketing, and product improvements.
Ad impressions delivered rose approximately 32% and ad pricing rose approximately 32%. The company will stop reporting logged-in and logged-out DAUq beginning with the quarter ending September 30, 2026. Liquidity remained strong, with $2.8 billiond in cash, cash equivalents, and marketable securities at March 31, 2026, and operating cash flow of $312.3 million, producing Free Cash Flow of $311.2 million.
On February 4, 2026, the board authorized a $1.0 billion Class A share repurchase program, under which 34,690 shares were bought for $5.0 million in the quarter, leaving $995.0 million available. The filing also discloses a securities class action tied to Google Search and AI Overviews, and a UK ICO penalty of GBP £14.5 million that Reddit is appealing. The company states it has a full valuation allowance against U.S. deferred tax assets and that a release within 12 months could produce a significant income tax benefit.
02—Key points
Key Highlights
- Revenue of $663.4 million, up 69% year-over-year; advertising revenue of $624.7 million versus $358.6 million in the prior-year quarter.
- Income from operations of $182.9 million versus $3.9 million; net income of $204.0 million versus $26.2 million.
- Adjusted EBITDA of $266.0 million versus $115.3 million; Free Cash Flow of $311.2 million versus $126.6 million.
- DAUq of 126.8 million, up 17% year-over-year; ARPU of $5.23, up 44%; U.S. ARPU of $9.63 versus $6.27.
- Cash, cash equivalents, and marketable securities totaled $2.8 billion at March 31, 2026; the company has no borrowings disclosed under its $500.0 million revolving credit facility, with $494.6 million available.
- A $1.0 billion Class A share repurchase program was authorized February 4, 2026; $5.0 million was used in the quarter, leaving $995.0 million.
- Legal and regulatory matters include a securities class action over Google Search and AI Overviews impacts and a GBP £14.5 million UK ICO penalty under appeal.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Reddit kept $0.31.
- Revenue$663.4M100.0%
- Cost of revenue−$56.3M8.5%
- Gross profit$607.1M91.5%
- Operating costs−$424.2M63.9%
- Operating income$182.9M27.6%
- Interest, other & tax$21.1M3.2%
- Net income$204.0M30.7%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 1, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $663.41M$392.36M | +69.1% |
| Cost of Revenue | $56.27M$37.09M | +51.7% |
| Gross Profit | $607.14M$355.27M | +70.9% |
| R&D Expenses | $207.25M$191.27M | +8.4% |
| Operating Expenses | $480.50M$388.46M | +23.7% |
| Operating Income | $182.91M$3.90M | +4586.4% |
| Net Income | $203.98M$26.16M | +679.8% |
| EPS (Basic) | $1.07$0.14 | +664.3% |
| EPS (Diluted) | $1.01$0.13 | +676.9% |
| Shares Outstanding (Basic) | 191.52M182.02M | +5.2% |
| Shares Outstanding (Diluted) | 202.52M201.28M | +0.6% |
05—Questions
Frequently Asked Questions
How did Reddit's revenue and profitability change in the first quarter of 2026?
Revenue rose to $663.4 million from $392.4 million, a 69% increase. Income from operations increased to $182.9 million from $3.9 million, and net income rose to $204.0 million from $26.2 million. Gross margin was 91.5% versus 90.5% in the prior-year quarter.
What drove the growth in advertising revenue?
The filing attributes the increase to higher ad impressions delivered, which rose approximately 32%, and higher pricing, which also rose approximately 32%. Management cites ad load optimization, new ad placements, user growth, and higher advertiser demand across the full funnel of ad objectives.
How are user growth and monetization trending?
Average DAUq was 126.8 million, up 17% year-over-year, with U.S. DAUq up 7% and rest-of-world DAUq up 26%. ARPU was $5.23, up 44%, with U.S. ARPU at $9.63 and rest-of-world ARPU at $2.02. Starting with the quarter ending September 30, 2026, the company will stop reporting logged-in and logged-out DAUq.
What is the status of the share repurchase program and the company's liquidity?
The board authorized up to $1.0 billion of Class A share repurchases on February 4, 2026. In the first quarter, Reddit repurchased 34,690 shares for $5.0 million, leaving $995.0 million available. The company held $2.8 billion in cash, cash equivalents, and marketable securities and generated $312.3 million of operating cash flow.
What legal and tax matters could affect future results?
A securities class action filed in June 2025 alleges misleading statements about the impact of Google Search and AI Overviews, and derivative complaints followed. In February 2026, the UK ICO issued a GBP £14.5 million penalty, which Reddit is appealing. Reddit has a full valuation allowance against U.S. federal and state deferred tax assets and believes a significant release may occur within 12 months, which would produce a significant income tax benefit.
06—Continue