Reddit, Inc. (RDDT) Cash Flow Statement

The operating cash flow to net income ratio has been above 1.0 in seven of the last ten quarters, with the 2025Q1 reading of 4.88 reflecting a low net income base rather than unusually strong cash generation. A large portion of this gap is likely explained by non-cash stock-based compensation of $131.3M in 2026Q3, which inflates operating cash flow relative to economic earnings. Investors should monitor whether conversion remains strong once dilution-related costs are weighed against the reported figures.

Free cash flow rose from roughly $27M in 2024Q2 to $363M in 2026Q3, with quarterly margins fluctuating between 32% and 47% over the most recent four quarters. Because capital expenditures remain below 0.5% of revenue, the margin trajectory is largely a function of operating leverage and working capital timing rather than asset investment. The 2026Q1 margin of 46.9% appears inflated by a favorable working capital inflow of $39.0M, suggesting the underlying run rate may be somewhat lower.

Depreciation and amortization of roughly $4M per quarter sits far above capital spending, which is unusual and may indicate that the reported capex figures exclude capitalized software or infrastructure costs held elsewhere, a point that warrants further investigation. Capex rose modestly from under $1M in 2025Q2 to over $3M in 2025Q4 before settling, which may reflect early investment in office or technology capacity rather than a structural shift. The low intensity supports high cash conversion but leaves limited visibility into how management allocates growth spending.

Repurchases were absent through most of 2024 and 2025 before accelerating sharply in 2026, which may indicate growing confidence in cash generation or an attempt to offset dilution from stock-based compensation. Because stock-based compensation of $131.3M in 2026Q3 is comparable in size to the buyback amount, a meaningful share of repurchase activity may simply be neutralizing equity issuance rather than producing net shareholder returns. Investors should monitor whether net share count reduction actually materializes.