Prime Highlight:
- Reddit shares jumped in after-hours trading after the company reported better-than-expected fourth-quarter earnings and issued a strong revenue outlook for the upcoming quarter.
- The company boosted investor confidence by announcing a $1 billion share repurchase program, signaling faith in its long-term growth.
Key Facts:
- Reddit reported earnings per share of $1.24 and revenue of $726 million for the fourth quarter, both beating market expectations.
- The company expects first-quarter revenue to range between $595 million and $605 million, higher than Wall Street forecasts.
Background:
Reddit shares rose in after-hours trading on Thursday after the company reported better-than-expected fourth-quarter results, gave a positive outlook for the next quarter, and announced a $1 billion share buyback.
The company reported solid growth in revenue, profits, and users as it moves into 2026. Reddit’s shares rose about 5% after the earnings report, showing growing investor confidence in the company’s direction.
For the fourth quarter, Reddit reported earnings per share of $1.24, well above analysts’ expectations of 94 cents. Revenue came in at $726 million, beating market estimates of $665 million. The company reported solid growth in revenue, profits, and users as it moves into 2026. Reddit’s shares rose about 5% after the earnings report, showing growing investor confidence in the company’s direction.
Net income surged to $252 million, representing an increase of nearly 255% year over year. Reddit’s U.S. market continued to be a major driver of growth, generating $583 million in sales during the quarter, surpassing analyst projections of $529 million.
Looking ahead, Reddit provided strong guidance for the first quarter of 2026. The company expects revenue to range between $595 million and $605 million, ahead of Wall Street forecasts of $577 million. Adjusted earnings are projected to be between $210 million and $220 million, also exceeding analyst expectations.
Reddit also announced a $1 billion share repurchase program, a move often viewed as a sign of management’s confidence in the company’s long-term prospects.
User growth remained steady during the quarter. Global daily active unique users rose 19% year over year to 121.4 million, slightly above market estimates. In the U.S., daily active users increased 9% to 52.5 million, while logged-in U.S. users grew 5% to 23 million. Although logged-in user growth has slowed for the sixth consecutive quarter, Reddit executives said the distinction between logged-in and logged-out users is becoming less relevant as the platform improves personalization for all users.
Chief executive Steve Huffman also highlighted strengthening partnerships with companies such as Google and OpenAI, noting that discussions are increasingly focused on product collaboration rather than purely commercial agreements.
Overall, Reddit’s strong results, positive outlook, and business moves show the company is building momentum in the competitive social media and online advertising market.