Reddit reaches 116 million daily users with $585M revenue in Q3

Reddit delivered substantial financial growth in the third quarter of 2025, posting $585 million in total revenue and reaching profitability with $163 million in net income on October 30, 2025. The platform now serves 116.0 million daily active unique visitors, demonstrating continued momentum across both user acquisition and monetization initiatives.

Daily active uniques increased 19% year-over-year, while weekly active uniques climbed to 443.8 million, representing 21% annual growth. The company's advertising business expanded dramatically with $549 million in ad revenue, marking a 74% increase compared to the same period in 2024. International user growth outpaced domestic expansion significantly, with international daily actives growing 31% year-over-year versus 7% growth in the United States.

Financial performance exceeds expectations

The company achieved its initial public offering profitability target with adjusted EBITDA reaching $236 million, representing 40% of total revenue. "This quarter, we achieved a targeted Adjusted EBITDA margin of 40%, which was a profitability goal we set at our IPO just last year," Steve Huffman, co-founder and chief executive officer, stated in the shareholder letter.

Gross margin expanded to 91.0%, improving 90 basis points from the prior year period. Net margin reached 28%, an improvement of $133 million compared to the third quarter of 2024. Operating cash flow totaled $185 million, while free cash flow came in at $183 million, both representing substantial year-over-year improvements of $114 million and $113 million respectively.

The company maintained disciplined share count management with fully diluted shares outstanding reaching 206.1 million as of September 30, 2025. This figure declined 0.2% sequentially and 0.1% year-over-year, demonstrating restraint in equity dilution. Basic earnings per share reached $0.87, with diluted earnings per share coming in at $0.80.

Advertising revenue accelerates across verticals

Reddit's advertising business generated $549 million in revenue during the quarter, growing 74% year-over-year. The expansion was driven by increases in both impressions and pricing, with strength observed across the full marketing funnel. More than half of the platform's top 15 industry verticals demonstrated growth exceeding 50% year-over-year.

United States advertising revenue reached $480 million, up 67% compared to the third quarter of 2024. International advertising revenue climbed to $105 million, representing 74% annual growth. The geographic mix reflects the platform's accelerating international expansion, particularly in markets where machine translation capabilities have been deployed.

Average revenue per unique reached $5.04 globally, marking a 41% improvement from the prior year. United States ARPU expanded to $9.04, up 54% year-over-year, while international ARPU increased 39% to $1.84. The disparity between domestic and international monetization levels highlights substantial room for continued revenue expansion as international users mature.

Other revenue, which includes data licensing and premium subscriptions, totaled $36 million in the quarter. This represented 7% growth year-over-year, contributing to the overall revenue mix alongside the dominant advertising segment.

Platform reaches third-ranked traffic position

Reddit now ranks as the third most visited site in the United States per Semrush data from October 2025. "That puts us in rare company—YouTube is #2 and Amazon is #4—and reflects how Reddit is where people start, not just where they end up," Huffman noted. The positioning reflects the platform's evolution from destination site to starting point for information discovery.

Logged-in users grew 14% year-over-year while logged-out users expanded 24%, indicating the platform's increasing visibility in search results and broader web traffic patterns. This traffic composition has implications for both user engagement and monetization strategies, as logged-in users typically demonstrate higher engagement levels and provide better targeting capabilities for advertisers.

Weekly search volume on the platform exceeded 75 million people during the third quarter. Reddit Answers, the company's AI-powered search feature, provides users with curated community insights. "We've started integrating Reddit Answers into core search, increasing its visibility across conversations, and rolling out to non-English languages," according to the shareholder letter.

The platform's content corpus continues expanding, with over 23 billion posts and comments available across 100,000+ active communities. Approximately 40% of posts contain commercial intent, positioning Reddit as a natural destination for purchase-minded audiences seeking authentic product recommendations and reviews from real users.

International expansion accelerates with translation

Machine translation now covers 30 languages, functioning as a primary driver of international user growth. The company has established a local content framework identifying top interests in each country, which guides partnerships, content strategy, and marketing initiatives. This approach proved successful in India and is now being applied to Australia, Brazil, Germany, and France.

International daily active uniques reached 64.4 million, representing 31% annual growth and comprising 55% of total daily actives. This geographic shift marks a significant change in platform composition compared to earlier periods when United States users dominated both user counts and revenue generation. International weekly active uniques totaled 256.0 million, growing 37% year-over-year.

The company conducted a multi-channel brand awareness campaign in France during the quarter, generating over one billion impressions. The initiative contributed to growth in local communities including r/AskFrance and r/VosSous, while boosting searches for "Reddit" across the country. The r/VosSous community experienced 35% subscriber growth during the campaign period.

Local partnerships complemented marketing efforts. In India, cricket legend Sachin Tendulkar served as brand ambassador, conducting an Ask Me Anything session that generated approximately nine million views. In Great Britain, a SkySports partnership drove content creation and discussion around sports topics.

Product development focuses on three pillars

Reddit's consumer product strategy concentrates on making the platform easier to use and more rewarding from initial exposure. "They're already coming to Reddit—now it's on us to make the experience worth coming back for by being more relevant and intuitive," Huffman explained in the shareholder letter.

The core product initiative involves redesigning the Reddit experience with a more modern, search-forward interface. The company is streamlining onboarding processes to help new users find relevant content through dynamic, personalized home feeds. AI-powered tools interpret subreddit rules and surface post insights to help more people contribute to their favorite communities.

Moderation tools received significant investment during the quarter. These tools are now deployed in over 3,000 communities, which are experiencing 30% more active moderators on average. "Moderators aren't just enforcing rules—they're shaping culture, building communities, and helping Reddit thrive," the shareholder letter stated.

Search represents the second major focus area. Over 75 million people searched on Reddit weekly during the third quarter, with that number continuing to rise. "Reddit conversations are uniquely authentic, contextual, and helpful. This is why we're investing in making Reddit a true search destination," according to company messaging.

Reddit has been developing its advertising platform capabilities throughout 2025, including the July 1 launch of optimization scoring and personalized recommendations for advertisers. The platform reached $500 million in revenue during the second quarter, demonstrating consistent sequential growth.

Publishers gain dedicated tools and capabilities

The company launched Reddit Pro tools tailored for publishers in September 2025. Early adopters including The Associated Press can now sync feeds, automatically import articles, track how stories are shared, and use AI-powered tools to identify appropriate communities for content distribution.

"In September, we launched new Reddit Pro tools tailored for publishers. Early adopters like The Associated Press can now sync their feeds, automatically import articles, track how their stories are shared, and use AI-powered tools to find the right communities," Huffman noted in the shareholder letter.

The publisher-focused tools launched through a beta waitlist announced September 10, 2025. The initiative addresses publishers' needs for content performance tracking across Reddit's daily active user base of over 110 million unique visitors. Publishers including The Hill, The Atlantic, The New York Times, and NBC News participated in alpha testing.

The enhanced article viewing experience aims to improve publisher content engagement on the platform. Reddit serves as the top social referral source for many participating publishers, reflecting changing traffic patterns as traditional sources shift. The platform positions itself as the "go-to place for distribution and discussion of real, human perspectives surrounding latest headlines."

Advertising automation drives performance improvements

Reddit's advertising platform has integrated automated optimization capabilities to help advertisers improve campaign performance without extensive manual management. The optimization score feature rates account setup effectiveness against platform best practices using a 100-point scale.

Machine learning improvements enhanced lower-funnel conversion objectives during the quarter, with performance improving over 20% driven by optimized models. The company launched beta testing of automated bidding for brand campaigns, which simplified budget management while delivering 15% more impressions at lower pricing compared to manual bidding approaches.

Automated targeting adoption grew over 50% year-over-year during the third quarter. The feature drives stronger campaign performance through machine learning enhancements and improved reporting capabilities, reducing the need for manual audience selection and optimization activities.

Model optimizations for the lower-funnel app ads objective generated double-digit percentage improvements to performance during the quarter. These technical enhancements demonstrate the platform's focus on improving advertiser outcomes through systematic infrastructure improvements rather than solely expanding inventory or raising prices.

Dynamic Product Ads reached general availability in May 2025, delivering over 94% higher return on ad spend in the first quarter compared to campaigns from the previous year. The feature automatically generates personalized advertising experiences by extracting product information from advertiser catalogs in real-time.

Financial outlook anticipates continued growth

Management provided guidance for the fourth quarter of 2025, projecting revenue between $655 million and $665 million. This range implies sequential growth of approximately 12-14% compared to the third quarter result of $585 million. The midpoint of $660 million would represent approximately 67% year-over-year growth if compared to fourth quarter 2024 pro forma estimates.

Adjusted EBITDA is projected to range between $275 million and $285 million for the fourth quarter. At the midpoint of $280 million, this would represent an adjusted EBITDA margin of approximately 42%, continuing the margin expansion trajectory observed throughout 2025.

The company held cash, cash equivalents, and marketable securities totaling $2.23 billion as of September 30, 2025. Capital expenditures remained minimal at $2.1 million, representing just 0.4% of revenue. This capital-light business model reflects Reddit's use of third-party infrastructure partners to host services rather than building owned data centers.

Operating expenses totaled $393.9 million on a GAAP basis, while non-GAAP operating expenses reached $296.6 million after excluding stock-based compensation, depreciation, and amortization. The company continues investing heavily in product development while managing cost growth below revenue expansion rates.

Strategic priorities target 2026 execution

Looking ahead to 2026, management outlined four primary priorities. First, growing app users by improving the experience and retention. Second, broadening the types of users and communities that call Reddit home both domestically and internationally. Third, increasing top-of-funnel growth by diversifying traffic sources including organic, paid, and publisher-driven channels.

The fourth priority focuses on scaling advertising and monetization formats for both users and partners. "Reddit is in a unique position. We're not trying to be the next anything—we're focused on being the best version of ourselves and what the internet needs most: a place where people can connect on almost any topic and find genuinely useful information," Huffman stated.

The platform's distinct community structure continues differentiating it from other social media destinations. With over 100,000 active communities organized around specific interests, Reddit provides access to highly engaged audiences discussing niche topics. This structure creates natural contexts for both organic content discovery and commercial messaging.

Reddit will host a conference call on October 30, 2025, at 2:00 p.m. PT to discuss third quarter results. The company will also solicit questions from the community through the r/RDDT investor relations subreddit, posting responses following the earnings call. This approach reflects Reddit's commitment to maintaining community engagement even in investor relations activities.

Marketing community implications

The third quarter results demonstrate Reddit's transformation from a niche discussion platform to a major advertising destination. The platform unveiled Community Intelligence at Cannes Lions 2025, transforming 22+ billion posts and comments into structured intelligence for marketing decisions. This positions Reddit as both an advertising platform and a consumer insights resource.

For marketing professionals, Reddit's growth creates opportunities to reach engaged audiences in contextually relevant environments. The platform's discussion-focused format enables different engagement approaches compared to traditional social media platforms where content consumption follows more passive patterns. High commercial intent within conversations, combined with strong user loyalty once preferences are established, creates favorable conditions for performance marketing.

Google Analytics enabled direct Reddit Ads cost data tracking integration in July 2025, streamlining measurement workflows for advertisers running cross-platform campaigns. The integration automatically imports ads cost, clicks, and impressions data, eliminating manual reporting processes.

The platform's role in consumer purchase decisions continues expanding. Internal data reveals that 79% of Reddit users maintain brand loyalty once product preferences are established. The platform captures over half of all online conversations related to purchasing decisions, establishing itself as a critical touchpoint in consumer research processes.

Marketing strategists have emphasized the importance of understanding Reddit's community-first culture when developing brand engagement approaches. The platform's anti-promotional culture requires authentic participation rather than traditional advertising messaging, creating both challenges and opportunities for brands willing to invest in community relationships.

Timeline

• May 22, 2025: Reddit launches Dynamic Product Ads with 2x higher ROAS results
• June 16, 2025: Reddit unveils Community Intelligence platform at Cannes Lions
• July 1, 2025: Reddit introduces optimization scoring and personalized recommendations for ads
• July 21, 2025: Google Analytics enables direct Reddit Ads cost data tracking integration
• July 31, 2025: Reddit reports $500 million revenue, 78% growth in Q2 2025 earnings
• August 7, 2025: Reddit introduces arbitration and class action waivers in updated advertising terms
• September 10, 2025: Reddit expands publisher reach with new Pro tools and enhanced link viewing
• September 22, 2025: Reddit marketing expert hosts comprehensive strategy session for brands
• October 2025: OpenAI promotes business solutions through Reddit advertising
• October 30, 2025: Reddit announces Q3 2025 results with $585 million revenue and 116 million daily active users

Summary

Who: Reddit Inc., led by co-founder and CEO Steve Huffman and CFO Drew Vollero, serving 116 million daily active unique visitors and 443.8 million weekly active uniques, engaging with over 100,000 active communities and serving advertisers across multiple verticals.

What: Reddit announced third quarter 2025 financial results showing $585 million revenue (68% year-over-year growth), $163 million net income (28% margin), $236 million adjusted EBITDA (40% margin), 116 million daily active uniques (19% growth), $549 million advertising revenue (74% growth), 91.0% gross margin, $185 million operating cash flow, $183 million free cash flow, fully diluted shares of 206.1 million (down 0.1% year-over-year), basic EPS of $0.87, diluted EPS of $0.80, and fourth quarter guidance of $655-665 million revenue with $275-285 million adjusted EBITDA.

When: The announcement was made on October 30, 2025, covering the quarter ended September 30, 2025, with an earnings conference call held at 2:00 p.m. PT / 5:00 p.m. ET.

Where: Results cover Reddit's global operations across the United States (contributing $480 million revenue with 51.6 million daily actives) and international markets (contributing $105 million revenue with 64.4 million daily actives), with machine translation supporting 30 languages and specific expansion focus on Australia, Brazil, Germany, France, and India.

Why: The strong financial performance demonstrates Reddit's successful transformation into a profitable social media platform driven by advertising revenue growth, user base expansion particularly in international markets, improved monetization capabilities with ARPU reaching $5.04 globally, strategic product development focus on core experience improvements, search functionality enhancement, and international expansion, while achieving the 40% adjusted EBITDA margin target set during the company's initial public offering in 2024.