What specific projects is the ML team working on, and what are the most successful strategies for driving top-of-funnel growth, especially towards the 100 million U.S. DAU goal?

Steve stated ML impacts 'basically everything' from signal collection and weighting to model updates and faster production. Jen explained top-of-funnel efforts include converting search traffic to core Reddit use cases, targeted marketing in mature markets (U.S.), and broader brand foundational work in international markets. “Our goal is to go from where we are today, about 50 million U.S. users to 100 million U.S. users. Since we have 200 million U.S. weeklies on the platform already, we believe investing in the feed here will improve retention and increase frequency and get us there.”

How are verification processes and bot labeling evolving, especially with sign-up/login changes? What are the key learnings from Reddit Max's adoption and what's next?

Steve explained bot verification involves porting good bots to a developer platform for transparency and tightening unauthorized bot usage. Passkeys are being implemented for secure, easier login and human verification. Jen noted strong Max adoption, with customers seeing CPA benefits, and it enables faster rollout of new performance features. “Passkeys is a general technology that includes things like Facetime, Touch ID, UB keys, it's basically a log-in system that requires a person to do something, look at your phone or touch something. This is both a more secure way of logging in, an easier way of locking in, which will help us just grow login users in general and then also serves as probably the lightest weight and most privacy and user acceptable way doing human verification as well.”

How important is DAU growth to the company, and how can Reddit get credit for DAU generated on third parties, especially in the context of AI licensing discussions?

Steve clarified that DAU is the 'primary focus' of the company, especially U.S. DAU, aiming for 100 million. He emphasized that Reddit's data is valuable for AI, stating 'there is no artificial intelligence without actual intelligence, and that comes from Reddit.' He declined to comment on exclusive AI deals. “DAU is the primary focus of the company because revenue is doing very, very well. So DAU is both our mission, communities for everybody and also fuel for the business. So DAU is the top priority.”

RDDT

Reddit (RDDT) Q1 FY26 earnings call: guidance and Q&A

Q: What are the most impactful strategies for increasing user frequency and accelerating growth, and what is the progress and thinking around DPA adoption and future roadmap?

Steve highlighted performance improvements (iOS/Android speed), onboarding, and feed enhancements driven by ML talent as key for user growth. Jen noted DPA launched a year ago, has significant headroom for improvement, and new partnerships like Shopify will help acquire mid-market/SMB advertisers. “The biggest drivers will probably be performance. So just the kind of pure speed of both iOS and Android, I still think there's a lot to do on onboarding. And I think the biggest driver long term will be the feed.”

Earnings call· Mar 2026 (Q1 FY26)· Communication Services· Apr 30, 2026

Source: earnings call transcript

Executive summary

Reddit, Inc. Q1 FY26 — Strong Revenue Growth and Profitability Driven by Differentiated Platform and AI Value

Reddit delivered a strong Q1 FY26, showcasing robust revenue growth and impressive profitability, underpinned by its unique platform and valuable human conversation data for AI. The company is intensely focused on accelerating user growth and frequency, particularly aiming for 100 million daily U.S. users, through product quality improvements and strategic investments in ML talent and infrastructure. While advertising performance remains strong, user retention and international market development are key areas for continued focus.

Highlights

Achieved seventh consecutive quarter with revenue growth over 60%, reaching $663 million, driven by 74% YoY ad revenue growth.
Maintained industry-leading gross margins over 90% (91.5% in Q1) and achieved a 40% adjusted EBITDA margin, up 1,100 bps YoY.
Generated record cash flow of over $300 million with a 47% free cash flow margin, while capital expenditures remained low at $1 million.
Increased active advertisers by over 75% year-over-year, with conversion-driven lower funnel revenue growing triple digits.
Reddit Max beta showed strong adoption, delivering 17% reduction in cost per action and 25% more conversion outcomes for advertisers.

Concerns

User retention remains an opportunity and an important unlocker to improving investment returns and marketing.
Q2 revenue guidance of $715M-$725M implies a deceleration to 43%-45% YoY growth due to lapping a strong Q2 2025.
International revenues, while growing 76% YoY, still require more foundational brand work and community building.

Guidance & targets

Category	Target	Timeline	Confidence
Q2 2026 Revenue	$715 million to $725 million high materiality	Q2 · FY26	High
Q2 2026 Revenue Growth	43% to 45% year-over-year high materiality	Q2 · FY26	High
Q2 2026 Adjusted EBITDA	$285 million to $295 million high materiality	Q2 · FY26	High
Q2 2026 Adjusted EBITDA Growth	71% to 77% year-over-year high materiality	Q2 · FY26	High
Q2 2026 Adjusted EBITDA Margin	40% high materiality	Q2 · FY26	High
Q2 2026 Total Adjusted Cost Basis	$430 million medium materiality	Q2 · FY26	High
Q2 2026 Stock-Based Compensation Expense Growth	about half the rate of revenue medium materiality	Q2 · FY26	Medium
User Disclosure Change	will no longer disclose logged in and logged out DAUq metrics medium materiality	Q3 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Total Revenue Driven by a ramp in ad revenue, marking the seventh consecutive quarter of over 60% growth.	$663 million	69%	—	—
Advertising Revenue Saw strong advertising demand across the funnel, driven by impressions and pricing growth.	$625 million	74%	—	—
Other Revenue Included revenue from the Content Licensing business.	$39 million	15%	—	—
U.S. Revenue Strong growth in the domestic market.	—	67%	—	—
International Revenue Outpaced U.S. revenue growth, indicating expanding global reach.	—	76%	—	—

RDDT operating KPIs by quarter

RDDT operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Mar 2025 Q1 FY25	Jun 2025 Q2 FY25	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	This call Mar 2026 Q1 FY26	Jun 2026 Q2 FY26	Change vs prior quarter
Daily active uniques (DAUq)	101.7M We finished the year with 101.7 million DAUq, marking 39% growth year-over-year, led by strong international growth at 46%. Source: earnings call transcript	108M We ended the quarter with 401 million weeklies and 108 million dailies, both up 31% year-over-year, and we continue to scale efficiently while investing in the future. Source: earnings call transcript	110M Daily active users grew to 110 million, up 21% year-over-year with growth in both the US and international markets. Source: earnings call transcript	116M We ended the quarter with 116 million DAUq and 444 million WAUq, both growing around 20% year-over-year. Source: earnings call transcript	121M+ In Q4 alone, we welcomed over 121 million daily active users to our platform, up 19% year-over-year and over 471 million weekly active users, up 24%. Source: earnings call transcript	120M+ And over the last 10 years, we've 10x that to over 120 million DAU. Source: earnings call transcript	—	—
Employees	2,233 We ended the year with 2,233 heads, up slightly more than 200 people net for the year. Source: earnings call transcript	2,300+ We ended the quarter with slightly more than 2,300 people, up 3% sequentially. Source: earnings call transcript	—	—	2,555 The company ended with 2,555 total headcount, up 14% versus last year and up about 3% sequentially from Q3, the same pace as the prior quarters. Source: earnings call transcript	—	—	—
Weekly active uniques (WAUq)	—	401M We ended the quarter with 401 million weeklies and 108 million dailies, both up 31% year-over-year, and we continue to scale efficiently while investing in the future. Source: earnings call transcript	—	444M We ended the quarter with 116 million DAUq and 444 million WAUq, both growing around 20% year-over-year. Source: earnings call transcript	471M+ In Q4 alone, we welcomed over 121 million daily active users to our platform, up 19% year-over-year and over 471 million weekly active users, up 24%. Source: earnings call transcript	<500M We already have tremendous reach today with nearly 500 million weekly users globally and 200 million in the United States. Source: earnings call transcript	—	—
Average revenue per user (ARPU)	—	—	$4.53 Average Revenue Per User, ARPU grew 47% year-over-year to $4.53, which is still low on an absolute basis and remains an opportunity. Source: earnings call transcript	$5.04 Average revenue per user, ARPU, grew 41% year-over-year to $5.04, which is still low on an absolute basis and remains an opportunity. Source: earnings call transcript	$5.98 Average revenue per user, or ARPU, grew 42% year-over-year to $5.98. Source: earnings call transcript	$5.23 Average revenue per user ARPU grew 44% year-over-year to $5.23. Source: earnings call transcript	$6.18 Average revenue per unique user grew 36% year-over-year to $6.18. Source: earnings call transcript	+18.2%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline
Reddit Max	launch	early Q1 FY26
Brand Auto Bidding	update	Q1 FY26
Shopping Ad Formats	launch	Q1 FY26
Shopify Integration	expansion	March (Shoptalk)
Reddit Pro for Publishers	expansion	Q1 FY26

Deals & partnerships

Shopify integration

Integration announced at Shoptalk in March 2026. Aims to build a deeper presence with mid-market and SMBs.

Google partnership

One of Reddit's important partnerships, which are very meaningful and mutually beneficial. These relationships help Reddit advance its own AI technology and bring in new users.

OpenAI partnership

One of Reddit's important partnerships, which are very meaningful and mutually beneficial. These relationships help Reddit advance its own AI technology and bring in new users.

Risks & headwinds

User retention

Not quantified, but described as 'an opportunity'

Mitigation:Improving onboarding, new user retention, and making Reddit faster across the board; investing in ML talent and foundational changes to product and infrastructure.

Ad market visibility

Not quantified, but described as 'shorter cycles' and 'less visibility'

Mitigation:Staying close to customers, helping them with insights from Reddit; focusing on increasing ad relevancy and diversity of advertisers to maintain performance.

Geopolitical volatility

Not quantified, but described as 'volatility in the backdrop'

Mitigation:The ad market seems stable despite volatility, with partners planning on shorter cycles but no material change in commitments.

Q&A highlights

What are the most impactful strategies for increasing user frequency and accelerating growth, and what is the progress and thinking around DPA adoption and future roadmap?

Steve highlighted performance improvements (iOS/Android speed), onboarding, and feed enhancements driven by ML talent as key for user growth. Jen noted DPA launched a year ago, has significant headroom for improvement, and new partnerships like Shopify will help acquire mid-market/SMB advertisers.

“The biggest drivers will probably be performance. So just the kind of pure speed of both iOS and Android, I still think there's a lot to do on onboarding. And I think the biggest driver long term will be the feed.”

asked by Doug Anmuth · answered by Steven Huffman

3 min read 7 chapters

Detailed narrative

AI Landscape and Data Value

Reddit positions its vast repository of human conversation, comprising over 25 billion posts and comments, as a foundational resource for AI models, likening it to 'oil for the modern Internet.' The company notes that authentic human conversation at scale is becoming increasingly rare and valuable.

Approximately 40% of Reddit conversations are commercial in nature, and 84% of shoppers report feeling more confident in their decisions after researching on the platform, highlighting its unique influence.

User Growth Strategy and Product Quality

The company is intensely focused on accelerating user growth and frequency, particularly aiming to grow its daily U.S. user base from 50 million to 100 million, leveraging its current reach of 200 million weekly U.S. users. Key initiatives include improving onboarding, new user retention, and enhancing the core product feed through machine learning.

Performance improvements on iOS and Android, as well as advancements in search (with Search WAUqs up 30% YoY), are critical drivers for achieving this goal.

Ad Platform Effectiveness and Performance

Reddit's advertising platform demonstrated strong Q1 performance, with total revenue up 69% and ad revenue up 74% year-over-year. This growth was driven by a combination of both impressions and pricing, supported by investments in machine learning for signal optimization and new ad formats. Performance-oriented revenue, representing over 60% of total ad revenue, grew triple digits, with active advertisers increasing by over 75% YoY.

Reddit Max and Advertiser Automation

The Reddit Max beta, launched in early Q1, is seeing strong adoption, with advertisers experiencing a 17% reduction in cost per action and 25% more conversion outcomes. Approximately 50% of Max campaign advertisers are utilizing AI-powered creative features. The company plans to expand Max adoption to new customers and through API integrations, aiming to shorten the timeline for rolling out performance features and provide valuable insights to advertisers.

Shopping Product Enhancements and Partnerships

Reddit is enhancing its shopping products, including Dynamic Product Ads (DPA), which delivered over 90% higher ROAS year-over-year on average. New shopping ad formats like collection ads and 'Redditor's Top Pick' overlays are being developed to improve discovery and conversion.

A new integration with Shopify aims to expand reach to mid-market and SMB advertisers, with early results showing Reddit improved cost per purchase by 34% and increased ROAS by 2.5x YoY in a Fospha study.

Foundational Changes and Talent Investment

Over the past year, Reddit has made significant foundational changes to its talent and infrastructure, including bringing in experienced leaders and machine learning talent from other major platforms. These changes are intended to unlock significantly greater headroom for growth by improving data processes, experimentation, and the speed of product delivery.

The company views these upgrades as crucial for getting Reddit to its 'next level' of performance and scale.

International Market and Community Strategy

While machine translation (now in 30 languages) is a good starting point for building content internationally, the long-term strategy focuses on fostering more native communities created and consumed locally within each country. The company is working on making it easier to create and grow subreddits globally, adapting its approach to each market's unique characteristics and focusing on 'community success' to drive engagement.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.