Reddit, Inc. Q2 2026 Earnings Call Summary

Moby Intelligence

Thu, July 30, 2026 at 9:05 PM PDT 3 min read

Strategic Performance Drivers

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• Management attributes sustained 60%+ revenue growth to the increasing value of authentic human conversation as the broader internet becomes more automated and synthetic.

• Performance was driven by a mix of pricing and impressions, with mid-to-lower funnel conversion volume growing over 100% year-over-year.

• The company achieved a milestone of $1 million revenue per employee, signaling a transition toward a more efficient and effective organizational structure.

• Management noted that while search referral traffic was volatile late in the quarter—offsetting product-led DAU gains—the core business remains resilient because it is built for direct, repeat app usage rather than 'drive-by' traffic.

• Product improvements led to a 50% relative year-over-year increase in new app user retention, which management views as the primary indicator of product quality and future growth.

• Strategic positioning focuses on Reddit as the 'antidote to an automated web,' where users seek context and lived experiences that AI summaries cannot replicate.

• International revenue growth of 84% was supported by machine translation strategies, though this area also experienced volatility due to external search ecosystem changes.

Outlook and Strategic Roadmap

• The long-term growth framework remains focused on reaching 1 billion daily users globally and 100 million in the U.S. through direct product-led engagement.

• Q3 2026 guidance assumes continued momentum with revenue growth of 47% to 49% and adjusted EBITDA margins reaching approximately 45% at the midpoint.

• Management plans to overhaul feed technology, citing significant 'headroom' to improve model size, update frequency, and the inclusion of timeless content currently excluded from recommendations.

• The Reddit Max automation suite will be expanded to become the primary onboarding experience for SMBs, aiming to reduce friction and improve advertiser LTV.

• Future reporting will shift away from logged-in vs. logged-out metrics to focus on total U.S. and international daily/weekly active users, reflecting how management now runs the business.

Operational and Financial Context

• The company initiated a meaningful capital return program, repurchasing approximately $235 million of stock (1.5 million shares) during the quarter.

• Gross margins of 91.3% were supported by hosting efficiencies, which successfully offset the increased compute costs associated with higher AI inference usage.

• Management lowered the full-year stock-based compensation (SBC) guidance to the low-to-mid-teens as a percentage of revenue, down from previous high-teen estimates.

• Search referral headwinds were specifically linked to a decline in machine-translated content and the evolving impact of AI overviews in external search engines.