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I'll be examining RDDT's 2025 revenues, expenses, EBITDA, and give a 2026 EBITDA estimate with this data. Later in the post, we'll take a deeper dive into current user growth, ARPU growth, and compare this to the initial 2026 estimates and to other companies growth so we can then give a share price forecast for 2026.
First, let's see what [RDDT](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) had to say about their Q1 growth.
>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%.
>The Q1 guide implies a total adjusted cost base of $385 million which would be down sequentially to Q4 expenses.
>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.
**Revenue, expenses and EBITDA**
Using previous earnings reports and the data above, I've plugged all this into a table, to give us...
| Q | Rev | Exp | EBITDA |
| :-: | :-: | :-: | :-: |
| Q1 2025 | $392.4 M | $388.5 M | $3.9 M |
| Q2 2025 | $499.6 M | $431.9 M | $67.7 M |
| Q3 2025 | $584.9 M | $446.4 M | $138.5 M |
| Q4 2025 | $725.6 M | $493.8 M | $231.8 M |
| Q1 2026 | *$605 M* | *$385 M* | *$220 M* |
Revenues are increasing quarter-to-quarter by 13%!
Except for the forecasted expenses in Q1 '26, expenses are slowly increasing. Averaging the difference gives us an expense increase average of 0.8% per quarter. If we remove the outlier, the first quarter of 2026, we get an average expense increase of 8.4% per quarter. For this post, we'll assume expenses will increase at this 8.4% rate.
*(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 multiplying the total DAUq by the ARPU values, you get the exact revenue for the year... I'm other words, ARPU encompasses AI training data and other revenues.)*
**2026 Outlook**
| Q | rev | exp | EBITDA |
| :-: | :-: | :-: | :-: |
| Q1 2026 | *$605 M* | *$385 M* | *$220 M* |
| Q2 2026 | $683.7 M | $417.3 M | $266.4 M |
| Q3 2026 | $772.5 M | $452.4 M | $320.1 M |
| Q4 2026 | $873.0 M | $490.4 M | $382.6 M |
For the full year, if they keep their 13% quarterly revenue growth, they'll receive $2.93 B compared to their $2.2 B in 2025, or an increase of 33.4%! I'll go into more detail about why revenue has room to run later, when I examine DAUq and ARPU.
Expenses of $1745.1 M, compared to the total of $1760.6 M in 2025, this is a 0.9% decrease.
As for EBITDA, the full year outlook is $1189.1 M, compared to the $441.9 M in 2025 and an increase of 269.1%.
**DAUq and ARPU**
RDDT says "Daily Active Uniques (“DAUq”) increased 19% year-over-year to 121.4 million" globally. RDDT itself only gives metrics for "U.S." and "International." So, what are the numbers for 2025...
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
| :-: | :-: | :-: | :-: | :-: | :-: | :-: |
| Q1 '25 | US | 50.1 M | $6.27 | Intl | 58.0 M | $1.34 |
| Q2 '25 | US | 50.3 M | $7.87 | Intl | 60.1 M | $1.73 |
| Q3 '25 | US | 51.6 M | $9.04 | Intl | 64.4 M | $1.84 |
| Q4 '25 | US | 52.5 M | $10.79 | Intl | 68.9 M | $2.31 |
In 2025 the DAUq for US steadily increased by 1.57% per quarter, and US ARPU increased by 19.9% per quarter. For international DAUq there was an increase of 5.0%, and an ARPU increase of 20.3%.
This gives us revenue of...
| Q | region | rev | region | rev | total Rev |
| :-: | :-: | :-: | :-: | :-: | :-: |
| Q1 '25 | US | $314.13 M | intl | $77.72 M | $391.33 M |
| Q2 '25 | US | $395.86 M | intl | $103.97 M | $499.83 M |
| Q3 '25 | US | $466.46 M | intl | $118.50 M | $584.96 M |
| Q4 '25 | US | $566.47 M | intl | $159.16 M | $725.63 M |
Calculated revenues are very close to the values posted in earnings reports, indicating that all revenue sources are included in one ARPU value.
**Other companies' user growth rates and ARPU**
*(Note: I omitted TikTok from the data set b.c I don't feel like TikTok is a direct competitor to Reddit. TikTok is very short form video, there's little opportunity to talk or be social on it, and the ads are not interactive. As of 2025, they had a total customer base of 23 B, on revenue of $1.68 B, or an ARPU of $13.7... which is still higher than Reddit's current ARPU value... That's not including the Chinese version of TikTok, only international.)*
*(Note: Snap, while being advertising competition, doesn't see the same user base. I'll update this post with metrics soon, but for now I'm going to go with Meta as a main competitor.)*
Facebook and Instagram user stats are grouped together by [Meta](https://investor.atmeta.com/investor-news/press-release-details/2026/Meta-Reports-Fourth-Quarter-and-Full-Year-2025-Results/default.aspx). Their [DAU](https://stockanalysis.com/stocks/meta/metrics/daily-active-users/) was 3.58 B at the end of 2025, with a growth rate of 1.4% per quarter since the beginning of 2024. Their [ARPU](https://stockanalysis.com/stocks/meta/metrics/average-revenue-per-user/) is significantly larger at $16.96 at the end of 2025, and their ARPU growth rate is 6.2% per quarter.
I'm going to cap RDDT's ARPU and DAUq growth rates to half of Meta's, ARPU at 3% and DAUq 0.7%... (Honestly, I'm doing this because I ran the numbers with higher growth rates and it blows RDDT off the charts for net income. I need to keep things in line with expectations.)
**2026 DAUq and ARPU**
Okay, RDDT's ARPU has room to run and they have DAUq growth... There's no guidance on DAUq or ARPU for 2026 so we need to create our own...
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
| :-: | :-: | :-: | :-: | :-: | :-: | :-: |
| Q1 '26 | US | 52.9 M | $11.11 | Intl | 69.4 M | $2.38 |
| Q2 '26 | US | 53.2 M | $11.45 | Intl | 69.9 M | $2.45 |
| Q3 '26 | US | 53.6 M | $11.79 | Intl | 70.4 M | $2.52 |
| Q4 '26 | US | 54.0 M | $12.14 | Intl | 70.9 M | $2.60 |
For 2026, RDDT will have a worldwide daily active community 1/5 that of Meta's, with revenue equalling...
| Q | region | rev | region | rev | total Rev |
| :-: | :-: | :-: | :-: | :-: | :-: |
| Q1 '26 | US | $587.72 M | intl | $165.17 M | $752.89 M |
| Q2 '26 | US | $609.14 M | intl | $171.26 M | $780.40 M |
| Q3 '26 | US | $631.94 M | intl | $177.41 M | $809.35 M |
| Q4 '26 | US | $655.56 M | intl | $184.34 M | $839.9 M |
Earlier, I calculated $2.93 B for the full year. This compares to the $3.18 B here. A difference of $250 M. This tells us that RDDT is expected to have significantly slowing revenue.
I'll be using the initial value going forward, as they take into consideration Q1's slowing revenue.
**EPS and price targets**
For software companies, the precedent is to maintain a steady shared count by issuing buybacks while issuing stock-based compensation. We're going to assume that this trend is maintained.
| Q | other income | tax | shares | EPS |
| :-: | :-: | :-: | :-: | :-: |
| Q1 '25 | $20.5 M | $(1.7) M | 206.0 M | $0.13 |
| Q2 '25 | $21.2 M | $(0.4) M | 206.6 M | $0.43 |
| Q3 '25 | $22.0 M | $(2.1) M | 206.1 M | $0.79 |
| Q4 '25 | $23.0 M | $3.2 M | 206.1 M | $1.22 |
Average increase in other income is 3.9%, and average increase in taxes is 98.5% but sure to is sporadic nature we'll keep it at the Q4 2025 value.
And for 2026...
| Q | other income | tax | EPS | TTM x 30 PE | x 45 PE |
| :-: | :-: | :-: | :-: | :-: | :-: |
| Q1 '26 | $23.9 M | $3.2 M | $0.93 | $100.96 | *$151.44* |
| Q2 '26 | $24.8 M | $3.2 M | $1.40 | $129.98 | *$194.98* |
| Q3 '26 | $25.8 M | $3.2 M | $1.66 | $156.17 | *$234.25* |
| Q4 '26 | $26.8 M | $3.2 M | $1.97 | $178.70.| *$268.04* |
**With a 45 PE, in Q1 we should see a share price of $151.44.** With the current 60 PE, a price target of 200 is probable on a strong beat.
That being said, I limited RDDT's DAUq and ARPU growth to half of Meta's, and kept the expense growth rates at 8% (despite the average pointing to it staying flat).
Position: 1600 shares, 20 short puts