Reddit's 5.91% Surge Outpaces 120th-Ranked $870M Volume on Earnings Optimism and Buyback

Market Snapshot

On February 18, 2026, Reddit (RDDT) surged 5.91% in trading, with a volume of $870 million—ranking 120th in market activity. The stock’s performance followed a mixed earnings report released earlier in the week, which highlighted strong revenue growth but included a post-earnings dip in after-hours trading. Despite the volatility, the 5.91% gain marked a rebound, reflecting investor confidence in the company’s recent strategic moves and financial metrics.

Key Drivers

Reddit’s Q4 2025 earnings report, released on February 5, 2026, underscored robust financial performance, with earnings per share (EPS) of $1.24—33.33% above the forecasted $0.93—and revenue of $726 million, up 70% year-over-year. The 70% revenue growth outpaced the 69% full-year 2025 revenue increase of $2.2 billion, signaling sustained momentum in monetizing its user base. The stock’s post-earnings dip in after-hours trading suggested initial caution among investors, but the subsequent 5.91% rebound on February 18 indicated a shift in sentiment, likely driven by the company’s broader strategic announcements.

A $1 billion share repurchase program, announced alongside the earnings, played a critical role in stabilizing investor optimism. The buyback, coupled with Q4 net income of $252 million and full-year 2025 net income of $530 million, demonstrated Reddit’s commitment to returning value to shareholders. Additionally, the 19% year-over-year growth in daily active users highlighted the platform’s expanding reach, which could support long-term revenue diversification. These factors collectively reinforced the stock’s upward trajectory.

Looking ahead, Reddit’s Q1 2026 guidance projected revenue of $595–$605 million (52–54% year-over-year growth) and Adjusted EBITDA of $210–$220 million, aligning with its 2025 performance. The company emphasized strategic investments in user onboarding and AI initiatives, which are expected to enhance engagement and monetization. These forward-looking statements, combined with Q4 Adjusted EBITDA of $327 million (45% of revenue) and $684 million in free cash flow for the full year, positioned Reddit as a high-growth, cash-flow-positive entity.

The stock’s resilience also reflected broader market confidence in Reddit’s ability to leverage its unique position in the digital advertising and AI ecosystems. While the platform faces competition in the social media sector, its focus on monetizing user-generated content and expanding AI-driven ad targeting differentiates it. The combination of strong earnings, aggressive buybacks, and a clear strategic roadmap created a compelling narrative for investors, countering short-term volatility and driving the 5.91% gain.

Ultimately, Reddit’s February 18 performance was a synthesis of near-term financial strength and long-term strategic clarity. The company’s ability to exceed expectations in both revenue and user growth, paired with capital allocation initiatives, reinforced its appeal to investors seeking exposure to high-margin, scalable internet platforms. As the stock settles into a new valuation range, attention will shift to the execution of its AI and user onboarding strategies, which will be pivotal in sustaining the momentum.