Revenue surged 61.1% YoY to $804.9M in 2026Q2, with gross margin at 91.3% and operating margin expanding to 28.8%, reflecting strong operating leverage.
Reddit, Inc. (RDDT) annual income statement — 6-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 |
|---|
| Sales/Revenue | 2.78B | 2.2B | 1.3B | 804.03M | 666.7M | 484.92M | 228.91M |
| Revenue Growth % | 66.59% | 69.4% | 61.71% | 20.6% | 37.49% | 111.84% | - |
| Cost of Goods Sold | 237.8M | 194.22M | 123.59M | 111.01M | 104.8M | 72.56M | 55.03M |
| COGS % of Revenue | - | 8.82% | 9.51% | 13.81% | 15.72% | 14.96% | 24.04% |
| Gross Profit | 2.54B | 2.01B | 1.18B | 693.02M | 561.9M | 412.35M | 173.88M |
| Gross Margin % | 91.44% | 91.18% | 90.49% | 86.19% | 84.28% | 85.04% | 75.96% |
| Gross Profit Growth % | - | 70.68% | 69.78% | 23.33% | 36.27% | 137.14% | - |
| Operating Expenses | 1.76B | 1.57B | 1.74B | 833.18M | 734.06M | 539.56M | 236.44M |
| OpEx % of Revenue | - | 71.11% | 133.61% | 103.63% | 110.1% | 111.27% | 103.29% |
| Selling, General & Admin | 922.25M | 783.16M | 802.03M | 394.83M | 368.9M | 282.59M | 118.91M |
| SG&A % of Revenue | - | 35.56% | 61.68% | 49.11% | 55.33% | 58.28% | 51.95% |
| Research & Development | 833.79M | 783.14M | 935.15M | 438.35M | 365.16M | 256.98M | 117.53M |
| R&D % of Revenue | - | 35.56% | 71.92% | 54.52% | 54.77% | 52.99% | 51.34% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 785M | 441.98M | -560.57M | -140.16M | -172.16M | -127.21M | -62.56M |
| Operating Margin % | 28.25% | 20.07% | -43.11% | -17.43% | -25.82% | -26.23% | -27.33% |
| Operating Income Growth % | - | 178.85% | -299.95% | 18.59% | -35.33% | -103.36% | - |
| EBITDA | 801.52M | 457.93M | -544.92M | -126.46M | -164.16M | -124.4M | -60.62M |
| EBITDA Margin % | 28.84% | 20.79% | -41.91% | -15.73% | -24.62% | -25.65% | -26.48% |
| EBITDA Growth % | 443.89% | 184.04% | -330.91% | 22.97% | -31.96% | -105.2% | - |
| D&A (Non-Cash Add-back) | 16.52M | 15.95M | 15.64M | 13.7M | 8M | 2.81M | 1.93M |
| EBIT | 877.96M | 528.69M | -485.21M | -87.02M | -157.93M | -127.56M | -59.07M |
| Net Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 92.96M | 86.71M | 75.36M | 53.14M | 14.23M | -343K | 3.49M |
| Pretax Income | 877.96M | 528.69M | -485.21M | -87.02M | -157.93M | -127.56M | -59.07M |
| Pretax Margin % | 31.59% | 24% | -37.32% | -10.82% | -23.69% | -26.3% | -25.81% |
| Income Tax | 6.86M | -1.03M | -931K | 3.8M | 622K | 340K | 102K |
| Effective Tax Rate % | 0.78% | -0.2% | 0.19% | -4.37% | -0.39% | -0.27% | -0.17% |
| Net Income | 871.1M | 529.72M | -484.28M | -90.82M | -158.55M | -127.9M | -59.17M |
| Net Margin % | 31.35% | 24.05% | -37.25% | -11.3% | -23.78% | -26.37% | -25.85% |
| Net Income Growth % | 302.64% | 209.38% | -433.2% | 42.72% | -23.97% | -116.14% | - |
| Net Income (Continuing) | 871.1M | 529.72M | -484.28M | -90.82M | -158.55M | -127.9M | -59.17M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 4.31 | 2.62 | -2.69 | -0.56 | -0.97 | -0.78 | -0.36 |
| EPS Growth % | 264.41% | 197.4% | -380.36% | 42.27% | -24.36% | -116.67% | - |
| EPS (Basic) | - | 2.84 | -2.69 | -0.56 | -0.97 | -0.78 | -0.36 |
| Diluted Shares Outstanding | 202.03M | 202.11M | 180.32M | 163.35M | 163.35M | 163.35M | 163.35M |
| Basic Shares Outstanding | 192.35M | 186.38M | 180.32M | 163.35M | 163.35M | 163.35M | 163.35M |
| Dividend Payout Ratio | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying RDDT stock.
For fiscal year 2025, Reddit, Inc. (RDDT) reported total revenue of $2.20B. This represents a 862.2% increase compared to $228.9M in 2020.
Reddit, Inc. (RDDT) is profitable, generating $529.7M in net income for the fiscal year ending 2025 with a net profit margin of 24.1%.
Reddit, Inc. (RDDT) reported an operating income of $442.0M, resulting in an operating profit margin of 20.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Reddit, Inc. (RDDT) generated $2.01B in gross profit for the year, representing a gross profit margin of 91.2%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
SBC dilution and revenue concentration
Metrics are mathematically derived from official filings.
Revenue Growth Accelerates on Ad Strength
Reddit's revenue surged 61.1% year-over-year to $804.9M in 2026Q2, per the latest quarterly report, marking a sharp acceleration from the prior quarter's 69.1% growth, indicating sustained momentum.
The sequential acceleration from 69.1% in 2026Q1 to 61.1% in 2026Q2, though slightly lower, still represents a robust growth rate that outpaces peers like Pinterest (15.8%) and Snap (10.6%). This suggests Reddit is gaining advertising market share, likely driven by improved ad targeting and increased user engagement. The durability of this growth will depend on Reddit's ability to maintain its unique community-driven content advantage against larger platforms.
Gross Margin Expansion Defines Competitive Moat
Gross margin reached 91.3% in 2026Q2, up from 88.6% in 2024Q1, as reported in financial statements, reflecting Reddit's asset-light model and pricing power in digital advertising.
Reddit's gross margin of 91.3% is significantly higher than peers like Pinterest (80.1%) and Snap (55.0%), indicating a structural cost advantage. The consistent expansion from 88.6% to 91.3% over the past two years suggests that Reddit is scaling its ad business without proportional increases in cost of goods sold. This margin profile provides a strong foundation for profitability, though investors should monitor whether increased investment in content moderation or infrastructure could pressure margins.
Operating Leverage Drives Profitability Inflection
Operating margin expanded from -11.0% in 2024Q2 to 28.8% in 2026Q2, per SEC filings, as revenue growth outpaced fixed cost increases, demonstrating significant operating leverage.
The dramatic swing from a -11.0% operating margin to 28.8% within eight quarters highlights Reddit's ability to scale revenue while controlling operating expenses. R&D and SG&A grew at a slower pace than revenue, with R&D as a percentage of revenue declining from 51.0% in 2024Q1 to 28.7% in 2026Q2. This suggests that Reddit's cost structure is becoming more efficient, though the sustainability of this leverage depends on continued revenue growth and disciplined expense management.
Net Income Quality Tempered by SBC
Net income of $252.8M in 2026Q2, as reported, includes $101.0M in stock-based compensation, which represents 40% of net income, suggesting reported earnings overstate cash profitability.
While Reddit's net margin of 31.4% is impressive, the significant SBC expense—$101.0M in 2026Q2 alone—indicates that a substantial portion of earnings is non-cash. This is a common characteristic of high-growth tech companies, but investors should adjust for SBC to assess true cash generation. The tax rate appears favorable, contributing to the high net margin, but this may normalize over time. The quality of earnings is moderate, as SBC dilution could pressure EPS growth if not offset by buybacks.
R&D and SG&A Efficiency Improves
Combined R&D and SG&A as a percentage of revenue fell from 331% in 2024Q1 to 62.5% in 2026Q2, based on reported figures, indicating significant cost discipline.
The dramatic reduction in operating expenses relative to revenue reflects Reddit's transition from a heavy investment phase to a more mature growth stage. R&D spending, while still substantial at $231.3M, has grown at a slower rate than revenue, suggesting that Reddit is leveraging its existing technology investments. SG&A efficiency also improved, with the ratio declining from 151% to 33.7% over the same period. This cost discipline is a key driver of the operating margin expansion, though investors should watch for any resurgence in spending as Reddit pursues new initiatives.
2024Q1 Marks Turning Point to Profitability
The 2024Q1 quarter, with a net loss of $575.1M, was the last major loss period; subsequent quarters show a rapid transition to profitability, as per financial data.
The 2024Q1 loss was largely due to a one-time $437.0M R&D charge, likely related to an IPO-related expense. Excluding that, the underlying business was already approaching breakeven. From 2024Q2 onward, Reddit's operating income turned positive and has since scaled to $231.7M in 2026Q2. This inflection point demonstrates the scalability of Reddit's business model and suggests that the company has reached a sustainable profitability threshold. The lasting impact is a shift in investor focus from growth at all costs to profitable growth.
SBC Dilution and Revenue Concentration Risks
Despite strong growth, Reddit's heavy SBC ($101.0M in 2026Q2) and reliance on advertising revenue could pressure margins and EPS, as noted in the data.
Short-sellers might argue that Reddit's reported profitability is overstated due to the significant stock-based compensation, which dilutes shareholders and may not be sustainable if the stock price declines. Additionally, Reddit's revenue is heavily dependent on advertising, which is cyclical and subject to competition from larger platforms like Meta and Google. The high growth rate may decelerate as the company matures, and any economic downturn could disproportionately impact ad spending. Investors should monitor these risks, as they could lead to margin compression and slower EPS growth.