Reddit delivered a blowout first quarter, reinforcing Wall Street’s view that the platform is becoming a more durable advertising and data business. Revenue rose 69% from a year earlier to $663 million in the quarter ended March 31, well ahead of analyst expectations near $610 million. The stock climbed more than 13% in the session after the results, lifting confidence in a company that now carries a market value of roughly $28.5 billion.
The quarter showed just how quickly Reddit’s financial model is improving. Net income jumped to $204 million from $26 million a year earlier, equal to a 31% margin. Adjusted EBITDA increased 131% to $266 million, while operating cash flow surged 145% to $312 million. Those figures suggest Reddit is no longer defined only by user growth and engagement. It is showing the kind of operating leverage investors expect from a maturing digital platform.
Advertising remained the engine. Ad revenue rose 74% to $625 million, accounting for nearly all of total sales. That strength reflects better monetization, steadier demand from marketers and the company’s progress in improving ad targeting and discovery across its communities. Reddit’s licensing business, which gives AI companies access to its vast archive of user-generated conversations, added another layer of growth and strategic value.
User trends were solid, if not uniform across regions. Daily active unique users reached 126.8 million, up 17% from a year earlier and slightly ahead of expectations. U.S. growth was more modest, with domestic DAUq up 7% to 53.5 million, while international markets continued to expand at a faster pace. That mix matters. Reddit still has significant room to grow overseas, but slower U.S. growth will remain a point investors watch closely because the domestic business tends to monetize more efficiently.
Management’s outlook added to the positive tone. Reddit forecast second-quarter revenue of $715 million to $725 million, above consensus estimates, and guided for adjusted EBITDA of $285 million to $295 million. The message was clear: growth is holding up, margins are still expanding and demand from advertisers remains healthy.
Analysts largely came away encouraged, though not without some caution on valuation after the recent rally. Across Wall Street, sentiment remains broadly bullish, with median price targets clustered around the low- to mid-$200 range. Several analysts pointed to Reddit’s profitability shift as the biggest takeaway, arguing that the company is moving faster than expected from a high-growth platform to a business capable of generating meaningful earnings and cash flow.
The other pillar of the bullish case is Reddit’s content base. With more than 25 billion posts and comments, the platform holds a data asset that is increasingly valuable in the AI era. Its archive of human conversation gives it a distinct position, both for ad targeting and for licensing content to AI developers seeking fresh, authentic training material. That advantage is difficult for rivals to replicate at scale.
Reddit still has work to do. It must show that strong ad growth can continue in a competitive market and that international expansion can translate into higher monetization over time. But after this quarter, the company looks less like a speculative growth story and more like a platform with expanding profit margins, multiple revenue streams and a clearer path through the rest of 2026.