Free cash flow generation has reached a 46.9% margin, with an operating cash flow to net income ratio of 1.53x indicating high-quality earnings conversion.
| Cash from Operations | 875.55M | 690.88M | 222.07M | -75.11M | -94.02M | -130.19M | -61.84M |
| Operating CF Margin % | - | 31.37% | 17.08% | -9.34% | -14.1% | -26.85% | -27.02% |
| Operating CF Growth % | 791.96% | 211.11% | 395.64% | 20.11% | 27.78% | -110.51% | - |
| Net Income | 707.54M | 529.72M | -484.28M | -90.82M | -158.55M | -127.9M | -59.17M |
| Depreciation & Amortization | -741K | -12.27M | 15.64M | 13.7M | 8M | 2.81M | 1.93M |
| Stock-Based Compensation | 326.1M | 343.18M | 801.65M | 47.6M | 55.31M | 149.87M | 21.25M |
| Deferred Taxes | 0 | 0 | 0 | 0 | -25.08M | -74.87M | 22.04M |
| Other Non-Cash Items | 39.05M | 7.04M | -43.48M | -15.6M | 36.38M | -16.36M | -12.33M |
| Working Capital Changes | -196.4M | -176.81M | -67.47M | -29.99M | -10.08M | -63.74M | -35.56M |
| Change in Receivables | -196.76M | -241.36M | -104.28M | -53.32M | -30.23M | -74.99M | -43.28M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Change in Payables | 8.23M | 18.17M | -570K | 12.47M | 10.9M | 11.73M | 2.69M |
| Cash from Investing | -66.56M | -218.89M | -440.69M | 41.29M | -804.18M | 170.68M | 81.18M |
| Capital Expenditures | -6.82M | -6.71M | -6.25M | -9.72M | -6.23M | -2.3M | -3.05M |
| CapEx % of Revenue | 0.28% | 0.3% | 0.48% | 1.21% | 0.93% | 0.47% | 1.33% |
| Acquisitions | 0 | 0 | -17.14M | 0 | -42.2M | -177.98M | -84.23M |
| Investments | - | - | - | - | - | - | - |
| Other Investing | 504K | 3.01M | 5.82M | 172K | -64K | 172.98M | 84.23M |
| Cash from Financing | -70.36M | -80.56M | 379.54M | -811K | -3.78M | 1.18B | 8.33M |
| Debt Issued (Net) | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Equity Issued (Net) | 14.89M | 25.07M | 680.22M | 6.99M | -2.76M | 1.15B | 8.33M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -5M | 0 | 0 | 0 | 0 | -95.19M | 0 |
| Other Financing | -85.25M | -105.63M | -300.68M | -7.8M | -1.02M | 34.63M | 0 |
| Net Change in Cash | 738.62M | 391.43M | 160.92M | -34.63M | -901.99M | 1.22B | 27.67M |
| Free Cash Flow | 868.73M | 684.17M | 215.82M | -84.84M | -100.25M | -132.49M | -64.89M |
| FCF Margin % | 35.12% | 31.06% | 16.6% | -10.55% | -15.04% | -27.32% | -28.35% |
| FCF Growth % | 177.37% | 217.01% | 354.39% | 15.38% | 24.33% | -104.16% | - |
| FCF per Share | 4.29 | 3.39 | 1.20 | -0.52 | -0.61 | -0.81 | -0.40 |
| FCF Conversion (FCF/Net Income) | 1.23x | 1.30x | -0.46x | 0.83x | 0.59x | 1.02x | 1.05x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 745K | 164K | 5K |
Volunteer moderation ecosystem dependency
According to recent financial disclosures, Reddit has demonstrated a significant improvement in cash conversion, with the operating cash flow to net income ratio stabilizing near 1.53x in 2026Q1, suggesting that reported earnings are increasingly supported by actual cash inflows rather than non-cash accounting adjustments.
The historical volatility in the OCF/NI ratio, which saw extreme swings during 2024, appears to be normalizing as the company scales its revenue base. This trend suggests that the business is moving past its initial public offering phase and into a period of more predictable cash generation, though investors should monitor whether this conversion remains consistent as data licensing revenue becomes a larger component of the mix.
As reported in quarterly filings, Reddit's free cash flow margin has surged to 46.9% in 2026Q1, reflecting a dramatic turnaround from the negative 8.8% margin observed in 2023Q4 and indicating that the company is successfully leveraging its platform scale to generate substantial discretionary cash.
The rapid expansion of FCF margins suggests that the company's cost structure is highly sensitive to volume, allowing incremental revenue to flow directly to the bottom line. This trajectory appears to validate the company's pivot toward high-margin data licensing, which requires minimal additional capital expenditure compared to traditional infrastructure-heavy social media platforms.
Based on the provided cash flow statements, Reddit maintains an exceptionally low capital intensity, with CapEx as a percentage of revenue consistently remaining below 0.5% in recent periods, which highlights the asset-light nature of the company's digital-first business model and its reliance on existing infrastructure.
The minimal investment required to maintain operations suggests that the company does not face the same heavy depreciation cycles as traditional industrial firms. This low capital intensity is a critical component of the company's ability to generate free cash flow, as it allows nearly all operating cash to be retained rather than reinvested into physical asset replacement.
Analysis of recent SEC filings reveals that stock-based compensation remains a persistent cash-equivalent expense, with $68.3 million recorded in 2026Q1, which may obscure the true economic cost of talent acquisition and potentially dilute the long-term cash-generative potential for common shareholders.
While SBC is a non-cash expense, it represents a real economic cost that effectively reduces the equity value available to shareholders. The consistent reliance on this form of compensation warrants further investigation into whether the company can eventually transition to a more cash-based compensation structure without impacting its ability to retain critical engineering talent.
Quick answers to the most common questions about buying RDDT stock.
Reddit, Inc. (RDDT) generated $690.9M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Reddit, Inc. (RDDT) generated $684.2M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Reddit, Inc. (RDDT) spent $6.7M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.