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Reddit shares rose 5% in after-hours trading Thursday after the company reported fourth-quarter earnings that beat on the top and bottom lines and gave strong guidance for the start of 2026.
Here’s how the company did compared with LSEG estimates:
Earnings per share: $1.24 vs. 94 cents expectedRevenue: $726 million vs. $665 million expected
The company said it expects first-quarter sales to come in the range of $595 million to $605 million, which is higher than Wall Street expectations of $577 million. Adjusted earnings in the first quarter are projected to come in between $210 million and $220 million, ahead of StreetAccount’s estimates of $203 million.
Reddit also announced a $1 billion share repurchase program.
The company’s fourth-quarter revenue rose 70% year over year, while net income was $252 million, up nearly 255% from the same period a year ago.
Reddit’s sales in the U.S. market came in at $583 million in the fourth quarter, topping analyst estimates of $529 million.
The company’s global daily active uniques, or DAUq, grew 19% year over year to 121.4 million in the fourth quarter, ahead of the 120 million that Wall Street was expecting.
Fourth-quarter U.S. DAUq grew 9% year over year to 52.5 million, slightly ahead of the 52.3 million that analysts were projecting.
The company said that logged-in DAUq for the U.S., which refers to users who have registered for Reddit accounts, rose 5% year over year to 23 million. That was slower than the 7% year over year growth Reddit said it recorded during the third quarter when its logged-in DAUq for the U.S. came in at 23.1 million. This is the sixth straight quarter in which Reddit’s U.S. logged-in user growth has slowed.
Investors have been monitoring Reddit’s logged-in DAUq metric because users who have created accounts are more lucrative to the company’s online advertising business. These Reddit account holders generally use the platform and engage with other users more frequently than those who may have stumbled into Reddit via Google search, which the company refers to as logged-out DAUq.
In an investor letter, Reddit CEO Steve Huffman said the company plans to “phase out reporting on logged-in and logged-out later this year” because there’s now less of a distinction between the two metrics than in the past. That’s because the company has been working on features intended to keep both logged-in users and logged-out users glued to the platform, Huffman said.
“As the industry evolves, how we think about our product and users must evolve too,” Huffman wrote. “We’ve historically reported logged-in vs. logged-out users, but as some of our work to streamline onboarding — instant personalization, for example — blurs the line between these states, the distinction between them makes less sense.”
Reddit finance chief Drew Vollero told analysts during an earnings call that the company will continue to report both metrics for the first two quarters of 2026.
Regarding the company’s data-licensing deals with Google and OpenAI, Huffman said during the earnings call that “relationships with both companies are very healthy” and that “the conversation is shifting from a purely business deal to more of a product partnership.”
“Specifically, what we’re looking for in any relationship like this is can we bring users into the community parts of Reddit,” Huffman said.
Regarding Reddit’s efforts to unify its traditional search tool with its more recent generative AI search feature, Huffman said that the company has learned that “the GenAI search results will just be better for most queries.”
Unlike traditional search, cutting-edge GenAI search and chat tools excel at providing results that contain “multiple perspectives from lots of people,” he said.
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