Reddit Posts Strong Q4 and Full Year Results

Reddit has published its latest performance update, with the platform adding another 5 million daily active users, while it’s also posted a strong revenue result for Q4.

And as it continues to optimize for AI search, both on and off platform, it’s engaged, expert communities could help to boost the platform as a key source of information. Unless, that is, Reddit ends up pricing too many LLM projects out of the market.

First off, on users. Reddit is now sitting at 121.4 million daily actives, up from 116 million in Q3.

The platform continues to grow at a steady rate, with the majority of its growth coming in markets outside the U.S.

Reddit also reached 471 million weekly actives, which remains a unique equation for the app. Most social platforms see around a 1:2 ratio for daily to monthly users, but Reddit’s is more like 1:4. That means that a lot of its users are transactional, and are coming to the platform less. Which, in some ways, reduces its advertising potential, as people aren’t coming back as often, but then again, they are coming to app for specific purpose, which could actually make it a more valuable opportunity for direct reponse promotions.

Either way, advertisers are clearly interested, because Reddit posted a huge revenue total for Q4, reaching $726 million, up 70% year-over-year.

Full year revenue rose 69% to $2.2 billion, while Reddit’s also projecting strong revenue results for 2026 ($595 million for Q1 alone).

Reddit credits this increase to its evolving ad delivery models, which now incorporate AI-powered targeting.

As per Reddit:

“In Q4, we made significant improvements to the performance of our lower funnel products by enhancing our machine learning models and optimizing for the advertiser’s objective to drive more efficient results.”

That, combined with the fact that Reddit is one of the most cited resources by AI chatbots, has helped to boost advertiser interest, which has also set Reddit up for a strong forecast for the coming year.

Though there are some signs of potential risk here as well.

As noted, Reddit has benefited from enhanced placement on AI-powered search queries, while its deal with Google has also given Reddit more presence in related search results.

But Reddit is also trying to maximize its revenue intake based on this, by forcing AI projects to pay for access to its platform. As a result, Reddit has restricted some AI tools from using Reddit listings, which has had some impact on its presence in overall AI search, while Google changes have also limited ChatGPT’s access to Reddit results, shrinking its presence in AI responses. Reddit also now requires all projects that access its API to get explicit approval for their usage.

It’s a bit of a catch-22 for Reddit, in that it could potentially win out by opening up its API access to all AI projects, and expanding its presence in AI responses. It could then cash in on more targeted ads for these referred visitors, or alternatively, it can increase the value of its data access by ensuring maximum compliance with its API usage restrictions.

It seems that Reddit believes that the latter is a better path, or it has no choice but to ensure more strict compliance, and that could mean that, over time, its value as a tool for gaining more presence in AI responses will decline.

But right now, it remains a key source for many AI responses, while Reddit results also rank high in Google, giving it value beyond the platform’s immediate audience as a promotion and brand awareness tool.

The other risk for Reddit is that if too many brands get too promotional in the app, as they look to connect with searchers who are being referred by external results, that could turn Reddit users off. It’s up and downvote system negates this to some degree, by burying overly promotional responses, or worse, AI bot engagement, but it’s another area that Reddit needs to watch to continue on its growth path.

But right now, Reddit’s looking good, and its opportunities are growing, which could be worth noting for social media marketers.

Looking forward, Reddit says that it’s looking to improve its new user onboarding, via LLM-powered guidance, which could make it easier for new users to join in Reddit discussions, while it’s also looking to enhance its internal and external search displays.

In combination, this could help to get more people coming back to the app more often, which could significantly boost Reddit’s value for marketers.

So, overall, things are looking pretty good for the app. Reddit’s informational message board-style display is less social-focused, and more aligned with information gathering, which is increasingly where social platforms are headed, while its potential value for expanded brand awareness and discovery is significant.