Reddit ad revenue jumps 64% as user growth outpaces Pinterest, Snap

Reddit reported Q2 advertising revenue of $762 million, up 64 percent year over year, as daily active uniques reached 130.3 million, up 18 percent.

"Management expects third-quarter revenue between $860 million and $870 million, representing 47 percent to 49 percent year-over-year growth," Reddit said in its earnings release. Needham's Laura Martin set a $300 price target in June, the highest among 12 analysts covering the stock, while Wells Fargo's Alec Brondolo set the lowest at $187.

Global average revenue per unique rose 36 percent to $6.18, with US ARPU surging 51 percent to $11.85 and international ARPU up 31 percent to $2.26. Active advertisers increased more than 70 percent, and revenue from Reddit's scaled channel, covering mid-market and small businesses, doubled year over year. Conversion volume rose more than 100 percent, while click volume climbed more than 30 percent.

The growth puts Reddit ahead of rivals in user momentum. Snap reached 493 million daily active users in Q2, up 5 percent year over year, while Pinterest grew monthly active users 11 percent to 640 million. Reddit shares have fallen 29.3 percent year to date, trading at 7.64 times forward sales versus the sector's 6.26 times.

International expansion is driving much of the acceleration. International daily active uniques rose 28 percent year over year, outpacing US growth of 6 percent, while international weekly active uniques climbed 35 percent. Product changes, including updated feed models, easier posting tools, video in comments, and interactive games, lifted new app user retention by 50 percent year over year. Efforts to convert web users to app users have produced higher retention and more valuable user cohorts.

The Zacks Consensus Estimate for 2026 earnings stands at $5.27 per share, up 8.65 percent over the past 30 days, implying 101.15 percent year-over-year growth. Reddit carries a Zacks Rank #3 (Hold). Analyst price targets range from $180 at Cantor Fitzgerald to $300 at Needham and Evercore ISI, with a median of $227.50.

Reddit's accelerating growth and monetization trends could help it outpace Pinterest and Snap if current momentum holds, though competition in digital advertising remains intense. Snapchat's adoption of augmented reality lenses, Spotlight, and AI-powered features drove its user base to 971 million monthly actives, while Pinterest continues to benefit from solid engagement across all regions. Investors will watch the Q3 earnings report for continued international ARPU gains and whether scaled-channel revenue growth persists.

This article is for informational purposes only and does not constitute investment advice.