Reddit, Inc. recently reported third quarter 2025 earnings, posting US$584.91 million in revenue and US$162.66 million in net income, up significantly from the same period last year, along with guidance for fourth quarter revenue between US$655 million and US$665 million.
In addition to advertising gains, Reddit’s expanding partnerships with leading AI firms like Google and OpenAI have materially increased its content licensing revenues, highlighting diversification beyond core ad income.
We’ll examine how the surge in AI content licensing revenues could reshape Reddit’s long-term growth and investment outlook.
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To be a Reddit shareholder right now means betting on the company’s ability to leverage high engagement, new ad formats, and growing data licensing partnerships, especially with AI leaders like Google and OpenAI, to drive sustainable earnings growth. The Q3 results reinforce momentum around these catalysts, but the key short-term driver remains Reddit’s ability to maintain robust advertising growth and diversify revenues. Risks tied to ongoing moderation challenges and tougher international expansion remain, but the recent earnings release does not significantly alter their immediacy or materiality.
Of the latest announcements, Reddit’s fourth quarter revenue guidance of US$655 million to US$665 million stands out, reflecting management’s confidence in recent gains from both advertising and new licensing streams. This update supports optimism around Reddit’s top-line trajectory in the near term, even as underlying risks, such as user growth and moderation, continue to merit close watching.
Yet, behind the headline revenue surge, ongoing concerns about scaling content moderation and increased regulatory scrutiny may present headwinds that investors should be aware of if…
Read the full narrative on Reddit (it’s free!)
Reddit’s narrative projects $3.8 billion revenue and $1.0 billion earnings by 2028. This requires 31.8% yearly revenue growth and a $783.7 million earnings increase from $216.3 million today.
Uncover how Reddit’s forecasts yield a $228.50 fair value, a 22% upside to its current price.
Simply Wall St Community members currently estimate fair value for Reddit shares between US$97.30 and US$308.90 across 23 independent perspectives. While analysts highlight rising data licensing as a catalyst, your outlook on Reddit’s long-term performance could look very different, consider all viewpoints before deciding.
