Reddit Shares Surge 49.6% on Strong Earnings and Guidance Despite Ranking 70th in Daily Trading Volume

Reddit (RDDT) closed at a 0.13% gain on August 21, with a trading volume of $0.88 billion, down 68.74% from the prior day, ranking 70th in market activity. The stock has surged 49.6% over the past month, outperforming broader tech indices, driven by robust Q2 2025 earnings and Q3 guidance. Revenue reached $499.63 million, up 77.9% year-over-year, with advertising revenue alone rising 84% to $465 million. Q3 revenue guidance of $535–545 million implies 54–56% annual growth, aligning with the Zacks consensus estimate of $549.59 million. International Daily Active Uniques (DAUq) grew 32% year-over-year, reflecting expanding global adoption, particularly in markets like France, Spain, and Brazil.

The platform’s advertising suite, including Shopping Ads and Dynamic Product Ads, delivered double the return on ad spend compared to traditional campaigns, attracting performance-driven marketers. AI-powered features, such as Reddit Answers and machine translation, are scaling engagement without compromising community integrity. Data licensing is emerging as a growth driver, leveraging Reddit’s 20-year archive of user-generated content. Despite these positives, the stock trades at a premium, with a forward P/S ratio of 16.5X, significantly higher than the Zacks Internet-Software industry average of 5.58X.

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