$RDDT · Reddit, Inc.
Reddit filed its Q3 FY2026 10-Q, reporting revenue of $895M (+53% YoY), net income of $283.3M (+74% YoY), and diluted EPS of $1.40. Operating income reached $261.6M with a 29.2% operating margin. Free cash flow was $362.6M for the quarter. The balance sheet shows $3.03B in cash and marketable securities against minimal debt.
- Revenue of $895M, up 53% YoY from $584.9M in Q3 2025.
- Net income of $283.3M, up 74% YoY from $162.7M.
- Diluted EPS of $1.40 vs. $0.80 a year ago.
- Free cash flow hit $362.6M for the quarter, nearly double Q3 2025's $183.1M.
- Nine-month revenue reached $2.36B, up 60% YoY, with net income of $740.1M.
Extended-hours trading shows RDDT at $101.00, down 22.13% from the $129.70 regular-session close. Despite strong absolute numbers — 53% revenue growth, 74% net income growth — the after-hours reaction suggests the market priced in even faster growth or is spooked by forward-looking risk disclosures around AI-driven traffic disintermediation and search-engine dependency.
A 53% revenue grower with 29% operating margins losing nearly a quarter of its market cap after-hours is a stark reminder that valuation multiples leave zero room for even perceived deceleration.
Reddit's 53% YoY revenue growth outpaces most digital-ad peers, but the after-hours selloff mirrors recent pattern where high-multiple ad-tech names get punished for any deceleration signal. META, SNAP, and PINS all face similar AI-disintermediation and search-traffic dependency risks.
Reddit flags AI agents allowing users to access Reddit content without visiting the platform directly as a material risk to traffic and ad revenue. The company also warns that search-engine algorithm changes, including AI-powered search summaries, could reduce referral traffic. Additionally, Reddit cautions that restricting access to logged-in users may suppress user growth.