NYSE: RDDT · Interactive Media & Services
Reddit, based in San Francisco, runs a platform of over 100,000 active communities and describes itself as one of the internet’s largest corpuses of authentic, constantly updated human-generated conversation. It had 121.4 million daily active uniques (DAUq, up 19%) and 471.6 million weekly active uniques in Q4 2025. Revenue grew from $804 million (2023) to $2,203 million (2025), 94% from advertising and the rest mainly from content licensing; it turned profitable in 2025 with net income of $530 million. The U.S. provided $1,786 million of revenue. Co-founder and CEO Steve Huffman controls about 75% of voting power, making Reddit a controlled company.
Last updated
Analysis last edited: November 1, 2026 · Financial data fetched: November 1, 2026 09:56 (SEC EDGAR) · Source 10-K filed: February 6, 2026
Built on10-K FY2025 · filed 2026-02-0610-Q (quarter ended 2026-09-30) · filed 2026-10-30Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
01
At a glanceFrom SEC data
Eight headline measures, each placed among the companies covered on this site.
- Revenue growthCAGRSmooths out year-to-year swings into "grew X% a year on average." Makes growth pace comparable across companies of very different sizes.
- 48.9%
- Operating marginOperating marginHow many cents of operating profit are left per dollar of revenue. Reflects pricing power and cost structure.
- 20.1%
- ROIC minus WACCROIC − WACC spreadThe difference between ROIC and WACC. Consistently positive implies value creation; consistently negative implies value destruction.
- -2.0 pts
- Net debt ÷ EBITDAEBITDAOperating income with D&A added back. A rough proxy for cash-generating power that’s less distorted by capital intensity, depreciation method, or financing/tax differences than net income.
- -5.4x
- Cash conversionOperating CF ÷ net income (cash conversion)How much of reported profit shows up as actual cash. 1x or higher means profit is backed by cash.
- 1.30x
- Dividend raisesDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year).
- —
- P/E todayP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing.
- 19.9x
- Betaβ (beta)How much a stock moves, on average, for a 1% move in the overall market. Above 1 means more volatile than the market, which raises the return shareholders require. This site computes it from about 2.5 years (roughly 130 weeks) of weekly returns, built from Yahoo Finance daily prices, regressed against an S&P 500 ETF (SPY) as the market proxy, then applies the well-known long-run mean-reversion adjustment (0.67 × β + 0.33) as the WACC default.
- 1.98
Higher than 98% of 372 non-financial companies
Average yearly growth over the years shown
Higher than 56% of 311 non-financial companies
Latest fiscal year (FY2025)
Higher than 18% of 311 non-financial companies
Return on capital above (or below) its estimated cost
Higher than 0% of 304 non-financial companies
Below 0 means more cash than debt
Higher than 34% of 349 non-financial companies
Operating cash flow ÷ net income
Years the dividend per share rose, of the last 5
Latest close 2026-11-04; trailing 12 months to 2026-09-30
Above 1 = moves more than the market
Each marker shows where this company sits among the non-financial companies covered on this site, not all listed companies (left = lowest, right = highest). A high position is not automatically good — for net debt ÷ EBITDA, higher means more debt. Details and formulas are in the sections below and in How to read this.
02
Valuation todayFrom SEC data
Price-based measures at the latest close, next to the same measures at the last fiscal year-end.
Share price$103.26close on 2026-11-04
Market cap$19.71B
- P/EP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing. today
- 19.9x
- P/BP/BShare price ÷ book value per share. Below 1x means the market values the company below its accounting net worth. This site uses the closing price nearest the fiscal year-end and highlights sub-1x readings. today
- 6.7x
- EV/EBITDAEV/EBITDAEnterprise value (≈ market cap + interest-bearing debt − cash) as a multiple of EBITDA — roughly, "how many years of EBITDA to buy the whole company." Lower is generally viewed as cheaper, and it’s more comparable than P/E across companies with different debt loads or depreciation policies. This site excludes noncontrolling interests from the EV calculation. today
- 37.6x
- FCF yieldFree cash flow (FCF)Operating CF minus capital expenditures — cash generated by the business after funding its own investment, available for dividends, buybacks, acquisitions, or debt paydown. Acquisitions and securities purchases (also in investing CF) are not subtracted, so FCF can be positive in a year when total investing CF exceeds operating CF. today
- 3.5%
- Dividend yieldDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year). today
- —
At FY2025 year-end: 87.7x
Earnings: trailing 12 months to 2026-09-30
At FY2025 year-end: 15.0x
Book value at FY2025 year-end
At FY2025 year-end: 93.7x
EBITDA for FY2025
At FY2025 year-end: 1.6%
Free cash flow for FY2025
Dividends per share for FY2025
“Today” uses the latest closing price (2026-11-04, Yahoo Finance daily closing prices) and shares outstanding at the last fiscal year-end. The rest of this page — including the financial table and ROIC vs. WACC — uses fiscal year-end prices. These are reference figures, not a judgment of whether the stock is cheap or expensive.
03
What changed since last earningsFrom SEC data
The latest reported quarter against the same quarter a year earlier, the balance sheet against the previous quarter-end, and what management said in its latest earnings release.
Quarter ended Sep 30, 2026.
- Revenue$585M → $895M (vs. a year earlier)↑ +53.0%$585M → $895M (vs. a year earlier)
- Operating margin23.7% → 29.2% (vs. a year earlier)↑ +5.5 pts23.7% → 29.2% (vs. a year earlier)
- Net income$163M → $283M (vs. a year earlier)↑ +74.1%$163M → $283M (vs. a year earlier)
- Diluted EPS$0.80 → $1.40 (vs. a year earlier)↑ +75.0%$0.80 → $1.40 (vs. a year earlier)
- Cash$1.49B → $1.36B (vs. previous quarter-end)↓ −8.7%$1.49B → $1.36B (vs. previous quarter-end)
Source: Form 10-Q ↗ (SEC XBRL). Long-term debt is the tagged long-term debt figure and leaves out short-term borrowings.
From the earnings release of Oct 29, 2026.
Management outlook • Issued
Estimates Q4 revenue of $1,000M–$1,030M. Source sentence
In the fourth quarter of 2026, we estimate: Revenue in the range of $1,000 million to $1,030 million Adjusted EBITDA in the range of $480 million to $510 million4 $1,000M-$1,030M $480M-$510M Q4 ‘26 REVENUE Outlook Q4 ‘26 ADJUSTED EBITDA⁴ Q3 2026 • Letter to Shareholders 11
Key changes
Daily Active Uniques 130.3M, up 12%. Source sentence
Business highlights Daily Active Uniques (“DAUq”) averaged 130.3 million, an increase of 12% year- over-year Weekly Active Uniques (“WAUq”) averaged 515.2 million, an increase of 16% year- over-year U.S.
Search referral traffic down meaningfully in Q3. Source sentence
Our search referral traffic was down meaningfully in Q3, with the decline accelerating later in the quarter.
Written by AI. A line appears only if its figures and direction match the quoted sentence, which an automatic check confirms. Companies' outlooks are their own and may not be met. Read the release ↗
04
Company profileFrom SEC dataShow
- Legal name
- Reddit, Inc.
- Headquarters
- SAN FRANCISCO, CA
- Incorporated in
- Delaware
- Fiscal year end
- 12/31
- Exchange & ticker
- NYSE: RDDT
- Industry
- Interactive Media & Services
- CIK
- 1713445
- Website
- https://www.redditinc.com/ ↗
Workforce (as of FY2025 year-end)
Employees
2,555
Source: Form 10-K (FY2025) cover page and business description
05
Earnings calendarFrom SEC dataShow
When the company reports each quarter: the quarter-end date, the day results were released, and when the 10-Q or 10-K was filed.
Next report
Q4 FY2026
Quarter end: December 2026. In past years, Q4 results were released 36–43 days after quarter end (Feb 5, 2026; Feb 12, 2025). No date has been announced in the sources this site uses.
Reporting pattern
- Fiscal year ends around December 31.
- Reports four times a year: three quarterly reports (10-Q) and an annual report (10-K) for Q4.
- Earnings releases came 29–43 days after quarter end over the last 11 quarters.
| Quarter | Quarter ended | Earnings release (8-K) | Report filed (10-Q / 10-K) |
|---|---|---|---|
| Q3 FY2026 | Sep 30, 2026 | Oct 29, 2026 (+29 days) | Oct 30, 2026 10-Q (+30 days) |
| Q2 FY2026 | Jun 30, 2026 | Jul 30, 2026 (+30 days) | Jul 31, 2026 10-Q (+31 days) |
| Q1 FY2026 | Mar 31, 2026 | Apr 30, 2026 (+30 days) | May 1, 2026 10-Q (+31 days) |
| Q4 FY2025 | Dec 31, 2025 | Feb 5, 2026 (+36 days) | Feb 6, 2026 10-K (+37 days) |
| Q3 FY2025 | Sep 30, 2025 | Oct 30, 2025 (+30 days) | Oct 31, 2025 10-Q (+31 days) |
| Q2 FY2025 | Jun 30, 2025 | Jul 31, 2025 (+31 days) | Aug 1, 2025 10-Q (+32 days) |
| Q1 FY2025 | Mar 31, 2025 | May 1, 2025 (+31 days) | May 2, 2025 10-Q (+32 days) |
| Q4 FY2024 | Dec 31, 2024 | Feb 12, 2025 (+43 days) | Feb 13, 2025 10-K (+44 days) |
| Q3 FY2024 | Sep 30, 2024 | Oct 29, 2024 (+29 days) | Oct 30, 2024 10-Q (+30 days) |
| Q2 FY2024 | Jun 30, 2024 | Aug 6, 2024 (+37 days) | Aug 7, 2024 10-Q (+38 days) |
| Q1 FY2024 | Mar 31, 2024 | May 7, 2024 (+37 days) | May 8, 2024 10-Q (+38 days) |
Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. For a quarter whose 10-Q or 10-K isn’t filed yet, the date is the latest Item 2.02 8-K since the previous report, which may be a preliminary or other results-related update. Fiscal years are labeled by the calendar year in which they end.
06
Flagship products & servicesSite analysis
Platform
Reddit communities
Over 100,000 active communities of user-generated conversation.
Advertising
Reddit Ads
Advertising products targeting communities and interests.
Search
Reddit Answers
AI-powered conversational search integrated into Reddit search in 2025.
Business tools
Reddit Pro
Tools for businesses and publishers to build an organic presence.
From the Form 10-K, FY2025.
U.S. and worldwide share of flagship products/services
Reddit does not state a market share in its 10-K.
Reviewed: Form 10-K (FY2025) · Form 10-Q (quarter ended 2026-09-30)
07
Recent strategic focusSite analysis
Recent developments.
Q3 2026 results
Q3 revenue $895.0M (vs $584.9M); net income $283.3M (vs $162.7M); diluted EPS $1.40 (vs $0.80).
Source: Form 10-Q (quarter ended 2026-09-30)
Buyback
$1B Class A share repurchase program authorized February 2026.
Source: Form 10-K (FY2025)
UK ICO penalty
February 2026 penalty notice with a £14.5M fine under UK GDPR; Reddit is appealing.
Source: Form 10-Q (quarter ended 2026-09-30) — Note on Commitments and Contingencies
Capex ÷ D&A (FY2025)
0.42x
Below depreciation — investment is being pared back
formulacapital expenditures ÷ depreciation & amortization
e.g.$7M ÷ $16M = 0.42x
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
R&D-to-revenue ratio (FY2025)
35.6%
formularesearch & development expense ÷ revenue × 100
e.g.$783M ÷ $2,203M × 100 = 35.6%
M&A spend (4-year total)
$59M
Latest year: $0
Cash-flow-statement spending on acquisitions, net of cash acquired
Where the money goes, over time
Unit: $M. Capex went from $6M in FY2022 to $7M in FY2025
- Capex
- R&D
- M&A spend
formulacapital expenditures ÷ depreciation & amortization
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
08
Key figures at a glanceFrom SEC data
FY2022–FY2025, 4 years.
Revenue (FY2025)
$2.2B
As reported in the 10-K
Revenue CAGR (3 years)
+48.9%▲favorable
formula(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
e.g.($2,203M ÷ $667M) ^ (1÷3) − 1 = 48.9%
termsCAGR · ^ (exponent) · Revenue (net sales)
Operating margin (FY2025)
20.1%▲favorable
+45.9pt vs. 3 years ago
formulaoperating income ÷ revenue × 100
e.g.$442M ÷ $2,203M × 100 = 20.1%
ROE (FY2025)
20.9%▲favorable
4-year average: 20.9%
As reported in the 10-K
P/B (FY2025 end)
14.99x
formulafiscal year-end closing price ÷ book value per share
e.g.$229.87 ÷ $15.34 = 14.99x
Period-end (fiscal year-end) value, not today's P/B
EV/EBITDA (FY2025 end)
93.7x
formula(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
e.g.($43,880M + $0M − $954M) ÷ ($442M + $16M) = 93.7x
termsEV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)
Period-end (fiscal year-end) value, not today's multiple
- ▲
Revenue grew +48.9% a year over 3 years (strong growth)
From $667M in FY2022 to $2.2B in FY2025. The annualized rate (CAGR) makes it possible to compare growth pace across companies of different sizes.
- ▲
Operating margin improved: -25.8% → 20.1%
How much operating profit is left per $100 of revenue. It moved +45.9 points over 3 years — pricing power, cost control, and product mix all show up here.
- ▲
Equity ratio is 90.4% (a high level of financial stability)
The share of total assets funded by equity rather than debt. 50%+ is often read as low bankruptcy risk, though the right level varies by industry (real estate and leasing run lower, for instance).
- ▼
Free cash flow was positive in 2 of 4 years
Operating cash flow minus capital expenditures: the cash left over after funding the business’s own investment, available for dividends, buybacks, acquisitions, or debt paydown. A negative year can mean heavy investment, or weak core earnings — worth distinguishing.
- ▲
ROE averaged 20.9% over 4 years (latest: 20.9%)
How much profit was generated on shareholders’ equity. Roughly 10%+ is often cited as solid for a U.S. company, though this varies a lot by industry and capital intensity.
09
Business modelSite analysis
Business Model Canvas
The whole company in nine blocks. Left side: how it delivers (partners, activities, resources, costs). Right side: who it serves and how it earns. Every entry comes from the company’s filings shown on this page.
08 · who helps
Key partners
No partners or suppliers named in the filings.
07 · what it does
Key activities
- Advertising products for brands and performance advertisers
- Content licensing
- Reddit Answers AI search and Reddit Pro tools
06 · what it draws on
Key resources
- 2,555 employees (1,981 in the U.S.)
- User-generated content from over 100,000 active communities
- Volunteer moderators
02 · why customers buy
Value propositions
- Communities built around user interests, where people find human perspectives; Reddit sees its content as uniquely valuable for AI licensing.
04 · how it keeps them
Customer relationships
- Daily community participation; brands engage directly in communities such as r/sonos.
03 · how it reaches them
Channels
- Its website and apps; ads sold directly and through channel partners; content licensing deals.
01 · who it serves
Customer segments
- Advertisers of all sizes
- Content licensees
- Users buying products directly
09 · where money goes
Cost structure
FY2025, share of revenue ($2.2B)
- Cost of revenue8.8%
- Research & development35.6%
- Selling, general & administrative12.7%
- Other operating costs22.9%
Operating profit left: 20.1% of revenue. Depreciation & amortization (inside the costs above): $16M. Capital spending: $7M.
Source: Form 10-K income statement and cash-flow statement (SEC XBRL).
05 · how money comes in
Revenue streams
- Revenue $2,203M (2025)
- Advertising $2,062M; other (content licensing, user products) $140M
- U.S. $1,786M; rest of world $417M
Value propositions, channels and customer relationships: Form 10-K (FY2025)
Users create and moderate communities; Reddit sells targeted advertising and licenses its content, including for AI uses.
01 what it draws on
Inputs & resources
- 2,555 employees (1,981 in the U.S.)
- User-generated content from over 100,000 active communities
- Volunteer moderators
02 what it does
Activities
- Advertising products for brands and performance advertisers
- Content licensing
- Reddit Answers AI search and Reddit Pro tools
03 who it serves
Customers
- Advertisers of all sizes
- Content licensees
- Users buying products directly
04 how money comes in
How it earns
- Revenue $2,203M (2025)
- Advertising $2,062M; other (content licensing, user products) $140M
- U.S. $1,786M; rest of world $417M
How the business makes money
- DAUq 121.4M in Q4 2025 (+19%).
- $1B share repurchase authorized February 2026.
- Controlled company (CEO has about 75% voting power).
Government & regulation around the business
Non-market factors from the company’s filings: what governments and regulators fund, buy, set, approve or restrict, and which part of the flow above each one touches.
Reddit must enforce U.S. export laws and sanctions.
Trade & export rules
Export controls, sanctions and tariffs
Users circumventing precautions could cause violations of U.S. export laws and sanctions.
Constrains the businessTouches: CustomersSource: Form 10-K (FY2025)
Revenue by segment (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
Advertising
2,062.5 (94%)Other (content licensing, user products)
140 (6%)
Source: Form 10-K (FY2025) Single segment; revenue by type, total $2,202.5M.
10
Where it earnsSite analysis
Many U.S.-listed companies earn most of their revenue outside the U.S. — this breaks down revenue by country/region so it's clear where the business actually makes its money.
Largest market (FY2025)
United States — 81% of revenue
Revenue by country / region (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
United States
1,785.6 (81%)Rest of world
417 (19%)
Source: Form 10-K (FY2025) By customer billing address.
11
Contract structureSite analysisShow
Short-term or spot sales carry different earnings quality than long-term or auto-renewing contracts — this shows how the company actually contracts with its customers.
12
Customers & suppliersSite analysis
Who the company sells to and buys from. Companies rarely name either, so named counterparties come only from the company's own filings and press releases; otherwise this lists the concentration figures the 10-K discloses.
Customers
Advertisers and content licensees.
Named by the company
No customer exceeded 10% of revenue in 2023–2025.
Suppliers
Cloud services providers Amazon Web Services and Google Cloud Platform.
Named by the company
No single supplier is named in the summary.
13
Competitors & peersSite analysis
Competitors the 10-K names, and the peer group the company itself chose in its proxy statement. Nothing here is this site's own pick.
Reddit competes directly with major advertising platforms and publishers.
Competitors named in the 10-K
Advertising
- Alphabet (Google)site ↗
- Meta Platformssite ↗
- Snapsite ↗
- TikToksite ↗
- Pinterestsite ↗
- Xsite ↗
Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.
14
Six years of financialsFrom SEC data
Each chart's axis holds a single unit (never mixing dollars, %, and $/share). The table's per-period header links to the filing the numbers came from.
Revenue over time
Unit: $M
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Profit over time (operating → net)
Unit: $M
- Operating income
- Pretax income
- Net income
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Margins over time
Unit: %
- Operating margin
- Net margin
formulaoperating income ÷ revenue × 100
formulanet income attributable to the company ÷ revenue × 100
Cash flow over time
Unit: $M (below zero = cash went out)
- Operating CF
- Investing CF
- Free CF
formulacash flow from operations − capital expenditures
termsFree cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Financial stability & capital efficiency
Unit: %
- Equity ratio
- ROE
formulatotal equity ÷ total assets × 100 (as reported in the 10-K)
termsStockholders’ equity · Total assets
formulanet income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
termsNet income (attributable to the company) · Stockholders’ equity
Earnings per share (EPS) and dividend per share
Unit: $
- EPS
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
| Line item | FY2022In next year’s 10-K | FY2023In next year’s 10-K | FY202410-K on EDGAR ↗ | FY202510-K on EDGAR ↗ |
|---|---|---|---|---|
| Income statement ($M) | ||||
| Revenue | 667 | 804 | 1,300 | 2,203 |
| Operating income | -172 | -140 | -561 | 442 |
| Pretax income | -158 | -87 | -485 | 529 |
| Net income (attributable) | -159 | -91 | -484 | 530 |
| Revenue growthcalc(this year’s revenue − last year’s revenue) ÷ last year’s revenue × 100 | — | 20.6% | 61.7% | 69.4% |
| Operating margincalcoperating income ÷ revenue × 100 | -25.8% | -17.4% | -43.1% | 20.1% |
| Net margincalcnet income attributable to the company ÷ revenue × 100 | -23.8% | -11.3% | -37.2% | 24.1% |
| Balance sheet ($M) | ||||
| Total assets | — | 1,596 | 2,337 | 3,239 |
| Total equity | -379 | -413 | 2,131 | 2,929 |
| Equity ratio | — | -25.9% | 91.2% | 90.4% |
| ROE | — | — | — | 20.9% |
| Cash flow ($M) | ||||
| Operating CF | -94 | -75 | 222 | 691 |
| Investing CF | -804 | 41 | -441 | -219 |
| Financing CF | -4 | -1 | 380 | -81 |
| Free cash flowcalccash flow from operations − capital expenditures | -100 | -85 | 216 | 684 |
| Cash and equivalents | 436 | 401 | 562 | 954 |
| Per share & other | ||||
| EPS ($) | -2.77 | -1.54 | -3.33 | 2.62 |
| BVPS ($) | — | — | 11.82 | 15.34 |
| P/E (x) | — | — | — | 87.7 |
| EV/EBITDA (x)calc(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization) | — | — | — | 93.7 |
| P/B (x)calcfiscal year-end closing price ÷ book value per share | — | — | 13.83 | 14.99 |
P/B and EV/EBITDA use each period’s period-end (fiscal year-end) figures, not the current share price. Figures without a "calc" tag are as reported in the Form 10-K (the consolidated financial statements and, for older years, earlier 10-Ks), pulled automatically from SEC EDGAR. Where a later filing restated a prior period, the restated figure is used.
Last 8 quarters
Three-month figures from 10-Q filings. Change is versus the same quarter a year earlier. Newest quarter on top.
| Quarter ended | Revenue | Operating income | Net income | Diluted EPS |
|---|---|---|---|---|
| 2026-09-30 | $895M+53.0% | $262M+88.8% | $283M+74.1% | $1.40 |
| 2026-06-30 | $805M+61.1% | $232M+242.2% | $253M+183.2% | $1.25 |
| 2026-03-31 | $663M+69.1% | $183M+4586.4% | $204M+679.8% | $1.01 |
| 2025-12-31 † | $726M+69.7% | $232M+338.5% | $252M+254.2% | — |
| 2025-09-30 | $585M | $139M | $163M | $0.80 |
| 2025-06-30 | $500M | $68M | $89M | $0.45 |
| 2025-03-31 | $392M | $4M | $26M | $0.13 |
| 2024-12-31 † | $428M | $53M | $71M | — |
† Fourth quarter = the 10-K’s annual figure minus the first three quarters; quarterly EPS isn’t derived this way because share counts change during the year.
15
Is ROIC above WACC?From SEC data
ROIC (the return on money invested in the business) above WACC (the cost of raising that money) means the company is creating value. WACC is an estimate, so its assumptions can be adjusted below.
ROIC (FY2025)
13.8%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
e.g.$442M × (1 − 21%) ÷ $2,530M × 100 = 13.8%
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
WACC (this site’s estimate)
15.84%
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
e.g.Equity weight: $43.88B ÷ ($43.88B + $0) = 100.0%
e.g.Debt weight: $0 ÷ ($43.88B + $0) = 0.0%
e.g.WACC: 15.8% × 100.0% + 5.0% × (1 − 21%) × 0.0% = 15.84%
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
How firm is this? With the equity risk premium ±1 point and beta ±0.2, WACC runs 13.0%–19.1% and ROIC − WACC runs −5.3 to +0.8 points. The sign flips inside this range, so the result depends on the assumptions. This describes the latest year and does not predict future value creation.
WACC 15.84% is this site’s estimate under the assumptions below (not a figure the company has published)
- Risk-free rate
- 4.95% (10-year Treasury, 2026-11-03)
- β
- 1.98 (price-derived adjusted beta)
- Equity risk premium
- 5.5%
- Cost of equity
- 15.84%
- Cost of debt
- 4.95% (no debt on record, using the risk-free rate)
- Tax rate
- 21% (U.S. federal statutory rate (not enough data for an effective rate))
- Capital structure (equity : debt)
- 100% : 0%
ROIC over time, vs. WACC
Unit: % — bars = each period's ROIC, horizontal line = latest WACC. Bars above the line are green, below are red
- ROIC (above WACC)
- ROIC (below WACC)
- WACC 15.84%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
Try different WACC assumptions
β and the equity risk premium are estimates with a real range of plausible values — move the sliders to check whether ROIC > WACC still holds. The risk-free rate starts at the 10-year Treasury yield on 2026-11-03 (U.S. Treasury).
Initial β: 1.98 (price-derived adjusted beta. Raw β 2.46, R² 0.21, 130 weeks)
formula0.67 × β + 0.33 (β = the slope of weekly stock returns regressed on weekly market returns)
e.g.0.67 × 2.460 + 0.33 = 1.978
termsβ (beta)
Period 2024-05-10–2026-11-04, using S&P 500 ETF (SPY) as the market proxy. Source: Yahoo Finance price history.
formularisk-free rate + β × equity risk premium
e.g.5.0% + 1.98 × 5.5% = 15.8%
termsCAPM · Risk-free rate · β (beta) · Equity risk premium (market risk premium)
formulafiscal year-end closing price × shares outstanding (= market cap)
formulainterest expense ÷ interest-bearing debt × 100 (clamped to 0–10%; falls back to the risk-free rate if there’s no debt)
16
What the price implies (DCF)From SEC data
A company's value can be written as its free cash flow divided by (cost of capital − perpetual growth). Working that backwards from the market's valuation shows how much growth the share price assumed — compared here with the company's actual past growth.
Growth the price implies (price on 2026-11-04)
11.9%
Perpetual FCF growth: g = r − FCF ÷ EV = 15.8% − 4.0%
Past FCF growth (FY2022–FY2025)
—
Not computable (FCF not positive in both years)
Past revenue growth (FY2022–FY2025)
+48.9%
Compound annual rate, 3 years
Inputs (FY2025): free cash flow $684M (operating CF − capex); enterprise value $17.23B = market cap $19.71B (latest close, 2026-11-04) + debt $0 − cash and short-term investments $2.48B; r = WACC of 15.8% using this page’s default assumptions (β 1.98, risk-free 5.0%, market premium 5.5%).
Three WACC scenarios
The same calculation under cautious, base and optimistic cost-of-capital assumptions (risk-free rate fixed at the 10-year Treasury yield). Pick one to load it into the sliders below.
Try your own assumptions
V = FCF ÷ (r − g). It starts at the implied growth rate, where the theoretical value equals today’s enterprise value.
Theoretical enterprise value
$17.54B
FCF $684M ÷ (15.8% − 11.9%)
Theoretical ÷ actual enterprise value
1.02x
Above 1x: these assumptions value the business above the market did
How sensitive the answer is
Theoretical ÷ actual enterprise value for each combination of r and g.
| g \ r | 13.8% | 14.8% | 15.8% | 16.8% | 17.8% |
|---|---|---|---|---|---|
| 0% | 0.29x | 0.27x | 0.25x | 0.24x | 0.22x |
| 2% | 0.34x | 0.31x | 0.29x | 0.27x | 0.25x |
| 4% | 0.41x | 0.37x | 0.34x | 0.31x | 0.29x |
| 6% | 0.51x | 0.45x | 0.41x | 0.37x | 0.34x |
| 8% | 0.68x | 0.58x | 0.51x | 0.45x | 0.41x |
A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap uses the latest close (2026-11-04) × shares at fiscal year-end; free cash flow and WACC inputs are from the latest fiscal year.
17
Earnings qualityFrom SEC dataShow
The same reported profit can mean different things depending on whether it's backed by cash, driven by the core business, or the result of a one-off item. Four checks below.
- ✓
Operating CF ÷ net income: averages 1.30x
Profit is backed by cash coming in.
- ✓
Accrual ratio (latest): -5.8%
A small share of profit rests on accounting estimates.
- ✓
Core-earnings share (operating income ÷ pretax income): 84%
Most profit comes from core operations.
Operating CF vs. net income
Unit: $M — operating CF above net income means profit is backed by cash
- Operating CF
- Net income
formulacash flow from operations ÷ net income attributable to the company
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formula(net income − operating CF) ÷ average total assets × 100
termsNet income (attributable to the company) · Cash flow from operations (operating CF) · Total assets
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Profit bridge (FY2025)
Unit: $M — what moved profit from operating income to net income
- Profit (each stage)
- Pushed profit up
- Pushed profit down
formulaoperating income ÷ income before income taxes × 100
termsOperating income · Income before income taxes (pretax income)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-06
Receivables & inventory days
Unit: days — days grow when receivables or inventory build up faster than sales
- Days sales outstanding
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
Worked examples (latest period)
formulacash flow from operations ÷ net income attributable to the company
e.g.$691M ÷ $530M = 1.30x
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formulaoperating income ÷ income before income taxes × 100
e.g.$442M ÷ $529M × 100 = 84%
termsOperating income · Income before income taxes (pretax income)
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
e.g.($350M + $590M) ÷ 2 ÷ $2,203M × 365 = 78 days
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
18
Who holds the sharesFrom SEC dataShow
How much of the stock large institutional investors report owning on SEC Form 13F, how much the directors and executive officers hold (and how much of the vote they control), and roughly how much is left for individual investors. Shown next to beta so the holder mix can be read alongside how much the stock swings.
Institutions, insiders and everyone else — Class A shares, 13F holdings as of 2026-06-30
“Everyone else” is what remains after shares reported on Form 13F and shares held by directors and executive officers: mostly individual investors, plus non-insider families or foundations and smaller or foreign institutions. The figures have different dates and 13F reports count some shares twice — read it as an approximate split.
- Held by 13F filers
- 86.6%
- Directors & officers (shares)
- 3.5%
- Everyone else (est.)
- 9.9%
- Directors & officers (voting power)
- 76.3%
- Institutional-ownership rank
- 239 of 416
- Beta (adjusted)
- 1.98
of Class A shares
individuals and other non-13F holders
of all votes, across share classes
1 = most institutional; 57% of covered companies have more
above 1 = swings more than the market
- 126.5M shares reported by 894 13F filers ÷ 146.1M Class A shares outstanding on 2026-07-29. Option positions are excluded.
- Only the listed Class A shares are counted; other share classes (often held by founders) are not in this figure.
- Directors and executive officers as a group, from the proxy statement’s beneficial-ownership table; includes shares they can acquire within 60 days.
- A large “everyone else” share can still reflect a family, trust or foundation stake held outside the board; check the proxy statement’s 5% holders.
Sources: SEC Form 13F data set (holdings as of 2026-06-30) · Form DEF 14A filed 2026-04-23 (beneficial ownership table) · Form 10-Q cover page (shares outstanding as of 2026-07-29)
19
Strengths & weaknessesSite analysis
Strengths
1. Hypergrowth
Revenue rose 69% in 2025 to $2,203M.
Evidence: Form 10-K (FY2025)
2. Turned profitable
Net income of $530M in 2025 after losses through 2024.
Evidence: Form 10-K (FY2025)
3. Unique content corpus
One of the internet’s largest corpuses of human-generated conversation.
Evidence: Form 10-K (FY2025)
Weaknesses
1. Ad dependence
Advertising was 94% of 2025 revenue.
Evidence: Form 10-K (FY2025)
2. Search traffic reliance
A securities suit alleges misleading statements about the impact of Google Search and AI Overviews.
Evidence: Form 10-Q (quarter ended 2026-09-30) — Note on Commitments and Contingencies
3. Governance
CEO controls about 75% of voting power.
Evidence: Form 10-K (FY2025)
20
What draws investors to itSite analysis
Why the stock can look attractive to investors — each point paired with what has to hold for it to stay true, and the opposing view. This is this site's analysis, not a recommendation to buy or sell.
P/E (FY2025)
87.7x
Price at fiscal year-end ÷ diluted EPS
Dividend yield (FY2025)
—
Dividends per share ÷ fiscal year-end price
Payout ratio (FY2025)
—
Dividends per share ÷ diluted EPS
FCF yield (FY2025)
1.6%
(Operating CF − capex) ÷ market cap
1. Ad and AI data growth
Revenue up 2.7x from 2023 to 2025 with growing licensing.
- What has to hold
- Users and ad pricing keep rising.
- The other side
- Traffic volatility.
Evidence: Form 10-K (FY2025)
2. Operating leverage
Operating income swung from −$561M (2024) to $442M (2025).
- What has to hold
- Costs grow slower than revenue.
- The other side
- Stock compensation.
Evidence: Form 10-K (FY2025)
21
ResilienceSite analysisShow
How well the company could absorb a bad year: its financial buffer, how its revenue and profit held up in the worst year on record, and what the 10-K says about the business's exposure to shocks. Figures and filing statements only — no overall rating.
1. Financial buffer (FY2025)
Cash & short-term investments ÷ debt due within a year
—
$2.48B vs. —
Interest coverage (operating income ÷ interest expense)
Not disclosed
Interest expense isn’t reported as a separate line.
Free cash flow ÷ dividends paid
—
2. Worst year in the record, and the recovery
| Figure | Worst year-over-year change | Back to the prior level? |
|---|---|---|
| Revenue | No decline in the record | — |
Covers only the 4 fiscal years on record (FY2022–FY2025), which may not include a full recession — the worst year here isn’t necessarily how the company would fare in a severe downturn.
3. Business resilience (from the 10-K)
Cash-rich balance sheet
Total assets $3,239M and equity $2,929M at end-2025; no interest-bearing debt reported.
Source: Form 10-K (FY2025)
22
Legal & regulatory mattersSite analysisShow
Lawsuits, government investigations, enforcement actions and settlements the company discloses — where each stands, what is at stake, and what comes next. From the 10-K's Legal Proceedings and contingencies note, the latest 10-Q, and 8-Ks.
Reddit faces a securities class action and a UK ICO penalty under appeal, plus ordinary platform-related claims.
2 open matters
Securities class action (Google Search impact)
PendingClass actionShareholder plaintiffs; Reddit and officers
Filed June 2025 in N.D. Cal., alleging misleading statements about the impact of Google Search and AI Overviews; dismissed with leave to amend August 13, 2026; second amended complaint filed October 23, 2026.
Source: Form 10-Q (quarter ended 2026-09-30) — Note on Commitments and Contingencies
UK ICO penalty notice
On appealRegulatory proceedingUK Information Commissioner’s Office
February 2026 penalty notice under UK GDPR including a £14.5M fine; Reddit is appealing.
- Amounts
- £14.5M
Source: Form 10-Q (quarter ended 2026-09-30) — Note on Commitments and Contingencies
Based on Form 10-Q (quarter ended 2026-09-30) — Note on Commitments and Contingencies, reviewed 2026-11-01. Routine ordinary-course claims are not listed. “Major” is this site’s judgment of which matters could materially affect results.
23
Risks (including geopolitical)Site analysis
Starting from the 10-K's Risk Factors section, organized by category — geopolitical, currency, raw materials, regulatory, disaster, and more — with impact and likelihood assessed by this site.
Risk map
Vertical = impact on results, horizontal = likelihood. Upper right = most severe. Numbers match the list below (placement is this site’s own assessment).
Likelihood →
"Company disclosure" vs. "this site’s assessment"
The description and mitigation for each risk are this site’s summary of the 10-K’s "Risk Factors" section. Impact and likelihood are this site’s own assessment, not the company’s — where the company discloses its own likelihood assessment, that is noted in the summary.
Impact is judged from how large the affected business is relative to total revenue/profit, and from the risk’s track record of moving results in the past. Likelihood is judged from the filing’s wording and the current business environment (already occurring, or recurring). See the rating criteria.
- 1Competition & technology shift
Ad platform competition
- Company disclosure (summarized from the 10-K)
- Competes with Google, Meta, Snapchat, TikTok, Pinterest and X.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact High / Likelihood High
- 2Customer/supplier concentration
Traffic sources
- Company disclosure (summarized from the 10-K)
- Changes in internet search engines’ methodologies could harm traffic.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood High
- 3Law & regulation
Privacy and platform regulation
- Company disclosure (summarized from the 10-K)
- UK ICO fined Reddit £14.5M under UK GDPR in February 2026 (under appeal).
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood High
- 4Governance & key people
Controlled company
- Company disclosure (summarized from the 10-K)
- Class B holders control matters submitted to stockholders.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
- 5Law & regulation
Social media liability
- Company disclosure (summarized from the 10-K)
- Court decisions on platform-design harms could circumvent Section 230.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
24
What changed in the risk factorsFrom SEC data
Paragraphs in the latest 10-K's Risk Factors that have little overlap with the year before, and paragraphs that were dropped.
New or substantially reworded (5)
become more frequent users of our platform. We also rely on initiatives like machine translation to drive growth in international DAUq, and the growth derived from this strategy may slow as we complete the roll out of machine translation to all major global languages.
• adverse legal developments relating to advertising, like those that constrain the use of certain advertising technologies or limit our ability to measure advertising effectiveness, including regulatory developments or litigation outcomes; Read more
and
We cannot guarantee that our share repurchase program will be fully implemented or that such program will enhance the long-term value of the share price of our Class A common stock.
In February 2026, our Board of Directors authorized a share repurchase program with authorization to purchase up to $1 billion of our Class A common stock (the “Share Repurchase Program”). Read more
Repurchases may be effected, from time to time, on the open market (including via pre-set trading plans), in privately negotiated transactions, or through other transactions in accordance with applicable securities laws. The Share Repurchase Program does not obligate us to acquire any particular amount of Class A common stock, has no expiration date, and may be suspended or discontinued at any time at our discretion. Although the program has been authorized, there is no obligation for us to repurchase any specific dollar amount of stock.
The existence of the Share Repurchase Program could affect the price of our stock and could potentially reduce the market liquidity for our stock. Read more
Although the Share Repurchase Program is intended to enhance long-term stockholder value, there is no assurance that it will do so because the market price of our Class A common stock may decline below the levels at which we repurchase shares, and short-term stock price fluctuations could reduce the effectiveness of the program. Repurchasing our Class A common stock reduces the amount of cash we have available to fund working capital, capital expenditures, strategic acquisitions or investments, other business opportunities, and other general corporate projects, and we may fail to realize the anticipated long-term stockholder value of any share repurchase program.
No longer in the text (2)
A portion of our historical DAUq metric counts views of pages that were hosted using Google’s Accelerated Mobile Page (“AMP”) framework. Read more
The accuracy of counting the DAUq attributable to this AMP traffic relies on the accuracy and completeness of information received from Google used to compute the DAUq metric. Unfortunately, the information provided by Google historically was not complete and consistent. To the extent that our historical metric includes views of pages hosted on third-party infrastructure, like Google’s deprecated AMP framework, the accuracy of our metrics will depend on the accuracy and consistency of the information received from any such third party. As a result of these and any future changes, our DAUq metric is not directly comparable quarter over quarter or year over year, and may not be comparable period over period in the future.
We believe that our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity, and teamwork fostered by our culture, and our business may be harmed.
Matched automatically, quoted as filed, and may include rewording of an existing risk. Compares Item 1A of the 10-K filed Feb 6, 2026 ↗ with the 10-K filed Feb 13, 2025 ↗.
25
What to watch going forwardSite analysis
- DAUq growth and logged-in users.
- Content licensing revenue.
- Securities suit and UK ICO appeal.
26
Source documentsShow
This page's financial figures come from the Form 10-Ks listed below. Check the original filings for full detail.
Other sources referenced in the analysis
Last updated
Analysis last edited: November 1, 2026 · Financial data fetched: November 1, 2026 09:56 (SEC EDGAR) · Source 10-K filed: February 6, 2026
Built on10-K FY2025 · filed 2026-02-06Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
This page is this site’s own analysis based on public information, and does not represent Reddit’s views. It is not a recommendation to buy or sell any security, and this site does not guarantee the accuracy of any figure or statement here. Always verify against the original source documents before making an investment decision.