Rddt earnings DD, growth (part 1)

run_midnight · 2026-04-24T16:59:08+00:00

=== SUMMARY === - The author projects Reddit (RDDT) will sustain ~20% quarterly revenue growth through 2026, leading to 47% full-year revenue growth and 76% adjusted EBITDA growth, with expenses remaining nearly flat. - Thesis: RDDT is in a high-growth phase with improving monetization, and the author plans to extend the model to 2030 and a potential $1 trillion valuation in a follow-up post. - Quality assessment: Semi-researched DD with explicit extrapolation from company guidance, but relies on optimistic assumptions (constant growth, flat expenses) and lacks user-saturation modeling; community criticism highlights these gaps. === SENTIMENT === BULLISH === TRADE IDEAS === RDDT - LONG | confidence: 0.70 | sentiment: +0.70 Speaker: u/run_midnight Thesis: 1. THE FACT: Revenue grew ~20% QoQ on average in 2025; Q1 2026 guide implies 53% YoY growth; author extrapolates 47% full-year 2026 revenue growth and 76% EBITDA growth. 2. THE BRIDGE: If actual results track the extrapolation, RDDT becomes fundamentally stronger, supporting a multiple expansion or sustained higher valuation, creating upside for long-dated calls/LEAPS. 3. THE VERDICT: Buy long-dated calls/LEAPS to capture multi-year growth trajectory, as implied by the community’s TLDR summary and author’s explicit “diamond hand to 2030” stance. 4. RISKS: Growth deceleration (as noted in top comment – Facebook/Twitter compressions), higher-than-expected expenses (infrastructure, headcount), user monetization saturation, and potential macro headwinds. Timeframe: long-term Key Points: - Revenue growth 47% projected for 2026 - EBITDA growth 76% projected for 2026 - Expenses assumed nearly flat vs 2025 - User growth saturation still unknown - 2030 $1T valuation is aspirational === COMMENTS SUMMARY === The top community comment (+10) praises the math but warns that 20% quarterly growth is optimistic and points to historical deceleration at Facebook/Twitter. It also questions the assumption that expenses stay flat whil

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The author projects Reddit (RDDT) will sustain ~20% quarterly revenue growth through 2026, leading to 47% full-year revenue growth and 76% adjusted EBITDA growth, with expenses remaining nearly flat.
Thesis: RDDT is in a high-growth phase with improving monetization, and the author plans to extend the model to 2030 and a potential $1 trillion valuation in a follow-up post.
Quality assessment: Semi-researched DD with explicit extrapolation from company guidance, but relies on optimistic assumptions (constant growth, flat expenses) and lacks user-saturation modeling; community criticism highlights these gaps.

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Okay, post number three on my DD series for RDDT's earnings. This post will examine RDDT's revenue growth rate, expense growth rate, and earnings growth until 2030.

For 2026, let's see [what RDDT has to say](https://investor.redditinc.com/news-events/news-releases/news-details/2026/Reddit-Reports-Fourth-Quarter-and-Full-Year-2025-Results-Announces-1-Billion-Share-Repurchase-Program/default.aspx) about their own growth.

&gt;In the first quarter of 2026, we estimate revenue in the range of $595 million to $605 million, representing 52% to 54% year-over-year revenue growth, with a midpoint of about 53%.

Let's do some math to see how much their revenues could increase per quarter if things average the same...

Total revenue Q2 2025 = $500 M, a 78% beat on Q2 '24

Total revenue Q3 2025 = $585 M, a 68% beat on Q3 '24

Total revenue Q4 2025 = $726 M, a 70% beat on Q4 '24

Total revenue Q1 2026 = $600 M, a 53% beat on Q1 '25

As we can see, revenues are increasing quarter to quarter, with the slowest quarter begging Q1, and the average increase being 20.1%. Extrapolate this to 2026 and we get...

Q2 2026 = $721 M

Q3 2026 = $865 M

Q4 2026 = $1039 M

For the full year, if they keep their 20% revenue growth rate per quarter, they'll recieve $3.26 B compared to their $2.2 B in 2025, or an increase of 47%!

Expenses next.

&gt;The Q1 guide implies a total adjusted cost base of $385 million which would be down sequentially to Q4 expenses.

Total expenses Q1 2025 = $366 M

Total expenses Q2 2025 = $411 M, 41% up on Q2 '24

Total expenses Q3 2025 = $422 M, 19% up on Q3 '24

Total expenses Q4 2025 = $474 M, 33% up on Q4 '24

Total expenses Q1 2026 = $385 M, 5% up on Q1 '25

As we can see, except for Q1 '26, expenses are slowly increasing. Averaging the difference of these numbers gives us expense increase average of 0.5% per quarter. If we remove the outlier, last quarter's 23% decrease in expenses, we get an average expense increase of 8% per quarter. There we go, we got something to work with! Let's extrapolate this 8% increase in expenses to the full year 2026 from Q1 2026.

Q2 2026 = $416 M

Q3 2026 = $449 M

Q4 2026 = $485 M

This gives us a full year expenses of $1735 M. Compared to the $1760 M in 2025, this is a 1.5% decrease or roughly flat... as I stated in my 2030 valuation post.

Next is the EBITDA.

&gt;Adjusted EBITDA in the range of $210 million to $220 million, representing approximately 82% to 91% year-over-year growth and an adjusted EBITDA margin of 36% at the midpoint.

Taking the numbers we have above and plugging them into a simple EBITDA formula (revenue - expenses) gives us...

Q1 2026 = $215 M

Q2 2026 = $305 M

Q3 2026 = $416 M

Q4 2026 = $554 M

This gives us a full year outlook of $1490 M, compared to the $845 M in 2025 and an increase of 76%! That's with a higher than expected expense rate.

So, now we got the numbers for 2026. For full year 2026, we estimate 47% revenue growth, expense growth of 8%, and EBITDA growth of 76% if things stay consistent.

That's cool, but how do we get 2027-2030 from these numbers? How about that $1 T valuation?? You got a crystal ball or something? These regards on RDDT will shit on you if you tell them something they don't like (even VisualMod hates me).

Ugh, we're going to have look at the current user growth rates, other companies user growth rates, rev per user growth rates, and revenue sources and each of their growth rates... No one's going to read this much text so it'll come in the next post...

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