RDDT earnings DD, Growth (Part 2)

run_midnight · 2026-04-25T05:54:05+00:00

=== SUMMARY === - Author projects Reddit (RDDT) DAUq and ARPU growth to 2030, using Meta as a benchmark, targeting 10% of Meta's ARPU. - Thesis: If RDDT reaches ~$12B net income by 2030 with a 60 P/E, market cap could hit $1 trillion; OP holds 1,500 shares. - Quality: Moderate DD with detailed extrapolations but highly speculative assumptions (linear growth, ARPU cap, and P/E multiple). === SENTIMENT === BULLISH === TRADE IDEAS === RDDT - LONG | confidence: 0.80 | sentiment: +0.70 Speaker: u/run_midnight Thesis: 1. THE FACT: Reddit’s US DAUq grew 1.57% per quarter in 2025, international 5.0%; US ARPU grew 30% quarterly, international 20.3%. Author extrapolates these rates to 2030, capping ARPU at 10% of Meta’s. 2. THE BRIDGE: If Reddit sustains user growth and ad monetization improves toward Meta’s levels, revenue could rise from ~$5.4B (2026E) to ~$14.3B (2030E), yielding net income of ~$12B. 3. THE VERDICT: Long-term buy-and-hold on RDDT based on compounding user engagement and ARPU expansion potential. 4. RISKS: Linear extrapolation ignores competition, ad market saturation, regulatory changes, and the assumption that RDDT can achieve Meta-like monetization. P/E of 60 may be unrealistic. Timeframe: long-term Key Points: - 1,500 share position by OP shows conviction - Targets $1T market cap by 2030 - Relies on sustained 3% ARPU growth after cap - No short-term catalyst provided - User growth assumes no new competition === COMMENTS SUMMARY === The top comment (by u/ai-moderator) provides a sarcastic TLDR summarizing the post as "hopium level critical" for equating Reddit’s user base to Meta’s, but offers no counter-arguments or additional data. The community engagement is low, with only 23 comments and a modest score of 16, indicating limited debate.

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Summary

Author projects Reddit (RDDT) DAUq and ARPU growth to 2030, using Meta as a benchmark, targeting 10% of Meta's ARPU.
Thesis: If RDDT reaches ~$12B net income by 2030 with a 60 P/E, market cap could hit $1 trillion; OP holds 1,500 shares.
Quality: Moderate DD with detailed extrapolations but highly speculative assumptions (linear growth, ARPU cap, and P/E multiple).

Score 16

Comments 23

Upvote % 75%

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Disclosure: 1500 shares

(Note: "Other revenues" aren't on the financial statements, only a note in the "key highlights." However, Reddit adds "other revenues" to the ARPU. You can see this by multiply the total DAUq by the ARPU values you get the exact revenue for the year... They don't distinguish revenue sources, only noting a single ARPU value for the geographical region that encompasses all revenue for that region. ARPU encompasses AI training data revenue...)

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Alright, back to the regularly scheduled program. We're going to look at the current user growth, ARPU growth, and compare this to other companies user growth so we can build a profile for 2027-2030. 

&gt;current user growth rates

We'll start by giving an estimate for 2026. RDDT says "Daily Active Uniques (“DAUq”) increased [19% year-over-year](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) to 121.4 million" globally. RDDT itself only gives metrics for U.S. and "international." So, what are the numbers for 2025...

Q1 US: 50.1 M (ARPU: 6.27); Q1 Int: 58.0 M (ARPU: 1.34)

Q2 US: 50.3 M (ARPU: 7.87); Q2 Int: 60.1 M (ARPU: 1.73)

Q3 US: 51.6 M (ARPU: 9.04); Q3 Int: 64.4 M (ARPU: 1.84)

Q4 US: 52.5 M (ARPU: 10.79); Q4 Int: 68.9 M (ARPU: 2.31)

In 2025 the DAUq for US increased by 1.57% per quarter, and US ARPU increased by 30.0% per quarter. For international DAUq there was an increase of 5.0%, and an ARPU increase of 20.3%.

This makes sense. But let's cap the ARPU at a value that matches Meta's.

&gt;Other companies user growth rates and ARPU

Facebook and Instagram user stats are grouped together by Meta. But their [ARPU](https://quartr.com/insights/visuals/meta-s-facebook-arpu-growth) is massive in comparison to RDDT at $227 for the US at the end of 2025, and their [DAUq](https://stockanalysis.com/stocks/meta/metrics/revenue-by-geography/) growth is higher at roughly 5% for the US. Internationally, Meta has DAUq growth of 6.4% and ARPU of between $16 and $76, depending on the region.

Meta's ARPU of $227 fits their platform as they have roughly 10x the users so let's use that as the max ARPU number for RDDT. We'll give RDDT a max ARPU value 10% of Meta's. Currently though, RDDT has an ARPU roughly 5% that of Meta's. Our max ARPU will be 10% of Meta's US ARPU of $227, or $22.7, and international $39.25, or $3.93. Additionally, as users grow, we'll also increase the ARPU by 3%, as that's roughly what inflation is at.

&gt;Future DAUq and ARPU

Okay, RDDT ads have room to run and they have decent user growth... So now we need to get back to the numbers. There's no guidance on DAUq for 2026 so we need to create our own from the our data above...

Q1 US: 53.3 M (ARPU: 14.03); Int: 72.4 M (ARPU: 2.78)

Q2 US: 54.2 M (ARPU: 18.24); Int: 76.0 M (ARPU: 3.34)

Q3 US: 55.0 M (ARPU: 22.70); Int: 79.8 M (ARPU: 3.93)

Q4 US: 55.9 M (ARPU: 23.38); Int: 83.8 M (ARPU: 4.05)

RDDT will have a worldwide DAUq community 1/4 that of Meta's and $5399.9 M in revenue. Subtract the expenses of $1735 M, from the Part 1 of this article, and we get a net income of $3665 M if they get to 10% of Meta's ARPU this year.

I don't actually think they're going to do that this year, but the data does suggest they can.

&gt;2027-2030

For 2027 it's the same deal. 

Q1 US: 56.8 M (ARPU: 24.08); Int: 88.0 M (ARPU: 4.17)

Q2 US: 57.7 M (ARPU: 24.80); Int: 92.4 M (ARPU: 4.30)

Q3 US: 58.6 M (ARPU: 25.55); Int: 97.0 M (ARPU: 4.42)

Q4 US: 59.5 M (ARPU: 26.31); Int: 101.9 M (ARPU: 4.56)

This gives us an ad revenue of $7519 M, and net income of $5645 M.

For 2028 let's do the same thing...

Q1 US: 60.4 M (ARPU: 27.10); Int: 107.0 M (ARPU: 4.70)

Q2 US: 61.4 M (ARPU: 27.92); Int: 112.4 M (ARPU: 4.84)

Q3 US: 62.3 M (ARPU: 28.75); Int: 118.0 M (ARPU: 4.98)

Q4 US: 63.3 M (ARPU: 29.62); Int: 123.8 M (ARPU: 5.13)

Again, this gives us a revenue of $9287 M, and net income of $7263 M.

2029...

Q1 US: 64.3 M (ARPU: 30.51); Int: 130.0 M (ARPU: 5.28)

Q2 US: 65.3 M (ARPU: 31.42); Int: 136.5 M (ARPU: 5.44)

Q3 US: 66.3 M (ARPU: 32.37); Int: 143.3 M (ARPU: 5.61)

Q4 US: 67.4 M (ARPU: 33.34); Int: 150.5 M (ARPU: 5.77)

Revenue is $11.5 B, and net income of $9.3 B.

And finally, 2030...

Q1 US: 68.4 M (ARPU: 34.34); Int: 158.0 M (ARPU: 5.95)

Q2 US: 69.5 M (ARPU: 35.37); Int: 165.9 M (ARPU: 6.16)

Q3 US: 70.6 M (ARPU: 36.43); Int: 174.2 M (ARPU: 6.31)

Q4 US: 71.7 M (ARPU: 37.52); Int: 182.9 M (ARPU: 6.50)

This gives us a revenue of $14.3 B, and net income of $ 11.96 B

Pretty close to my 2030 valuation and just shy of that $1 trillion market cap, if the P/E multiple is 60. Given the right environment, like a bull market in software and an ARPU growth rate above 3% then I could see RDDT hitting above $1T.

There's still a long way to go, but at least it's possible.

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