RDDT Q2 Earnings Call Highlights AI, User Growth Push

RDDT Focuses on Product-Led User Growth

CEO Steven Huffman said Reddit’s primary consumer priority remains increasing daily active users by improving onboarding, retention and engagement. He highlighted progress in converting web users into more engaged app users.

Huffman noted that new app user retention improved 50% year over year on a relative basis during the quarter. He also said feed improvements, posting tools and community discovery remain central to driving more frequent usage.

The company reported 130.3 million daily active uniques and 514.6 million weekly active uniques in the quarter. Management said search referral volatility offset some product-driven user gains.

Reddit Advances Advertising Monetization

Chief operating officer Jennifer Wong said Reddit’s advertising business benefited from stronger advertiser adoption, improved tools and broader customer diversification.

Advertising revenues rose 64% year over year to $762 million, supported by pricing, impressions and stronger performance across campaign objectives. Wong highlighted growth in conversion volume, clicks and active advertisers.

She also discussed Reddit Max, the company’s automated advertising platform. Advertisers using Max increased more than 60% from the prior quarter, while Max revenues grew more than 150% during the same period.

RDDT Expands AI And Data Opportunities

Huffman addressed investor questions around Reddit’s role in the changing AI ecosystem. He said the company views its content as valuable across multiple uses, including training, grounding and search-related applications.

During analyst Q&A, a LightShed Partners analyst asked about future data licensing relationships. Huffman said Reddit continues evaluating opportunities to maximize value from its content relationships.

The company also highlighted its focus on improving Reddit search and feed technology. Management said upgrades to recommendation models and search experiences are ongoing priorities for increasing engagement.

Reddit Maintains Strong Financial Discipline

Reddit reported second-quarter revenues of $805 million, up 61% year over year, while adjusted EBITDA reached $343 million with a 42.6% margin. EPS was $1.25, and net income was $253 million.

Chief financial officer Andrew Vollero said profitability and cash generation continued scaling alongside revenue growth. Operating cash flow reached $262 million, and the company ended the quarter with $2.8 billion in cash, cash equivalents and marketable securities.

Reddit also repurchased approximately 1.5 million shares during the quarter for $235 million. Management said capital priorities include business investment, potential acquisitions and share repurchases.

RDDT Sets Third-Quarter Outlook

Management provided third-quarter 2026 revenue guidance of $860 million to $870 million. Adjusted EBITDA guidance was set at $385 million to $395 million.

Vollero said the outlook reflects continued business momentum along with planned investments. He also lowered the full-year stock-based compensation expense outlook to the low-to-mid teens as a percentage of revenue.

During Q&A, analysts questioned user growth trends and marketing efficiency. Management emphasized that improving retention and product quality remain key factors in expanding acquisition efforts.

Reddit Balances Growth And Engagement Goals

Management maintained focus on building a larger daily user base while improving the quality of engagement. Huffman said feed technology, onboarding and creator tools represent major areas of ongoing work.

Reddit also highlighted community growth initiatives, including easier posting, improved recommendations and video features. Executives said these efforts are designed to increase participation across the platform.

The company’s near-term priorities remain centered on product execution, advertising expansion and improving direct user relationships. Management’s commentary showed continued attention on both growth investments and operational efficiency.

Zacks Signals

RDDT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Rank focuses on earnings estimate revisions and is designed to help identify stocks with stronger potential performance over the next one to three months.

The stock has a Value Score of F, Growth Score of A, Momentum Score of A and VGM Score of B. Zacks Style Scores range from A to F, with higher scores representing stronger characteristics within each investing style category.

The Zacks Rank and Style Scores should be viewed together, with stronger combinations generally coming from higher-ranked stocks paired with favorable Style Scores. The Zacks Rank can change as analysts update earnings estimates following quarterly results.

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