Reddit 2026 Q2 Earnings Call

Thanks, Julianne. Hi, everyone. Welcome to Reddit's second quarter 2026 earnings call. Joining me are Steve Huffman, Reddit's Co-founder and CEO, Jen Wong, Reddit's COO, and Drew Vollero, Reddit's CFO. I'd like to remind you that our remarks today will include forward-looking statements and actual results may vary. Information concerning risks and other factors that could cause these results to vary is included in our SEC filings. These forward-looking statements represent our outlook only as of the date of this call, and we undertake no obligation to update any forward-looking statements. During this call, we will discuss both GAAP and non-GAAP financials. Reconciliation of GAAP to non-GAAP financials can be found in our letter to shareholders. Our second quarter letter to shareholders and earnings press release are available on our investor relations website and investor relations subreddit. I'll turn the call over to Steve.

Thanks, Jesse. Hi, everyone. Thank you for joining us and welcome to our earnings call. Q2 reinforced something we believe deeply. As the internet becomes more automated, the value of authentic human conversation continues to rise. We saw that reflected in both our commercial success and early progress of our product roadmap. We delivered our eighth consecutive quarter of over 60% revenue growth, hit an adjusted EBITDA margin of 43%, and crossed a major milestone we've been chasing, $1 million revenue per employee. These results speak to the strength of Reddit's monetization engine and the differentiated value we provide advertisers. I heard that clearly at Cannes last month, where we met with many of our customers. Across the board, brands told me they believe in Reddit's distinct ability to connect them with highly engaged, highly intentional audiences. More than that, they are rooting for us to win.

Reddit works differently from other platforms, and that's important to advertisers and people alike. As the internet becomes flooded with synthetic content, people are craving real human perspective. We are the antidote to an automated web. AI compresses the internet into summaries. Reddit delivers the opposite: deep discussions, passionate debates, and lived experiences. People don't want a summary of Reddit, they want Reddit. As AI makes information more abundant, the challenge is no longer finding content, it's finding context, personal opinion, and first-hand accounts. Everything online feels flat, polished, generated, or sponsored, so consumers are overwhelmed and increasingly skeptical. We've never had more information, but we've never trusted it less. That's why decision-making is shifting from single authorities to groups of real people who have nothing to gain from you purchasing a product. It's not just purchase decisions, it's health, careers, travel, everything.

Our top priority remains growing our daily active user base by improving the experience for new users so they come back more frequently. Everyone belongs on Reddit because Reddit has content for everyone. We already have a massive base of weekly users, and our focus is on converting them into dailies. Our product work is improving engagement in key areas. Updated feed models are increasing contribution rates and session frequency, and we're successfully driving more web users to our app where they are far more engaged. We've made it easier to post on Reddit and to find the right community to post in. We've also broadened the product in ways that support growth and engagement. Video and comments helps expand our upper funnel, and interactive games on our developer platform drives repeat usage and daily habit.

On a weekly basis, Reddit now reaches over half a billion people, including more than 130 million daily. In Q2, we improved our user mix and brought more high-quality users to Reddit across the app and site. New app user retention, an area we've discussed frequently, was up 50% year-over-year on a relative basis this quarter. This is coming from a small base and we have a lot of work ahead of us, but it's an important sign that we're moving in the right direction. These product efforts, paired with consumer marketing, help drive daily active users and offset headwinds in users coming from search. Search referrals were choppy in the quarter and traffic was more volatile later in the quarter. The bigger picture is unchanged.

The commercial business is strong, our revenue growth is differentiated, and we have much to be encouraged by on the product side. While our visibility in referral traffic remains low, we're not building for drive-by traffic. We're building a daily destination. Our product work is what will get us to our goal of 1 billion daily users globally and 100 million in the U.S. That work takes time to gain traction, but is what will deepen engagement, strengthen our monetization flywheel, and drive more durable growth. The internet is divided between machines and humans. There's room for both, but we know who we're building for. People will always want to hear from other people, real opinions, expertise, stories, and communities where they can ask, learn, argue, and belong. Reddit has continued to grow through every major change on the internet because the underlying need has not changed.

Human connection is existential. Reddit is the most human place on the internet. That's why I'm so confident in where we're going. Thank you, as always, for being along the ride with us. I'll hand it over to Jen.

Thank you, Steve. Hello, everyone. Q2 was another strong quarter for Reddit, reflecting the momentum of our advertising business and the differentiation of our platform. Reddit's billions of conversations across hundreds of thousands of communities give advertisers a unique way to reach high-intent audiences and drive measurable, consistent returns. In the age of AI, authentic human conversations have become more distinctly helpful, desired, and valuable. We brought this message to life with the launch of our brand campaign, People Are the Best. The campaign celebrates the people who come to Reddit every day for real perspectives, recommendations, and advice, and the communities that help keep the internet human. Our research continues to show that no matter where the consumer journey begins, Reddit helps influence purchase decisions and accelerate outcomes. This message resonated at Cannes Lions, where we met more than 1,000 customers and partners.

Helping people access human perspective is central to our mission and strategy to reach one billion daily users and to help advertisers connect with more audiences. Moving to our results. In Q2, total revenue grew 61% year-over-year to $805 million. Advertising revenue grew 64% to $762 million, reflecting broad-based strength across the business. Revenue growth was driven by both pricing and impressions, demonstrating the increasing value we deliver to advertisers. Reddit's content and communities combine search-like intent with the depth and breadth of social, creating a distinct and valuable audience for advertisers to reach and drive results. In Q2, we turned this intent into outcomes with conversion volume growing over 100% and click volume growing over 30% year-over-year. In Q2, mid and lower funnel performance objectives contributed meaningfully with revenue from Dynamic Product Ads and app installs, each more than doubling year-over-year.

We saw strength across our sales channels, including large customers and scaled. Our scaled channel revenue, which includes mid-market and SMBs, doubled year-over-year. We also saw strength across industry verticals, particularly retail and travel, while active advertisers grew over 70% year-over-year. I'll discuss our progress across the ad stack. Our strategy is to make businesses of all sizes successful on Reddit by delivering market-competitive outcomes across objectives. Our ongoing investments are measurable and delivering returns. We're executing against three areas: scaling automation through our ads platform in Reddit Max, delivering advertiser value across the full funnel, expanding the Reddit for business ecosystem. Starting with automation. Reddit Max launched a private beta earlier this year. We're seeing strong adoption and performance for mid and lower funnel advertisers.

The number of advertisers using Max grew over 60% from Q1, while Max revenue grew over 150% during the same period. We continue to add capabilities to the Max suite. In Q2, we added the app install objective to Max campaigns and launched tailored creatives, which uses AI to identify relevant communities and audiences, then designs variants on advertiser creative to improve ad relevance and performance. Max campaigns are proving to drive better performance for advertisers and high LTV customers. For example, Lenovo achieved 40% higher purchase value with Max than with standard campaigns, demonstrating how AI-driven optimization can turn high-intent users into high-value customers. Looking ahead, we plan to expand Max to a broader range of advertisers and make it the primary onboarding experience for SMBs. We also plan to introduce new features that simplify activation and continue enhancing our models to drive stronger performance.

Moving to our progress across marketing objectives. With more than half a billion weekly users, Reddit delivers strong outcomes for brand advertisers in the upper funnel. Video views was our fastest-growing upper funnel objective, more than doubling revenue year-over-year. Our six-second engaged video views goal, which became generally available in January, helps video-first advertisers optimize for longer, more meaningful views. In testing, the objective delivered over 130% lift in six-second view-through rate, over a 70% increase in video completion rate, and an 80% reduction in cost per six-second video view with auto-bidding. Video is a growing user and ad content format on Reddit and an area of continued investment across the consumer and monetization roadmaps.

We recently launched video and comments, with investments in our interactive and AMA ad formats, we see an opportunity to offer advertisers more distinctive creative experiences that help them build brand awareness and connect with their customers in a unique way on Reddit. In the lower funnel, shopping and app install objectives are delivering measurable growth and outcomes for advertisers. Max campaigns for app ads entered beta, with tests showing an average 15% reduction in cost per action and a 28% increase in results volume. Using Max campaigns on Reddit, online pharmacy DocMorris achieved a 20% lower cost per install and scaled spend after also seeing a cost per purchase that outperformed benchmarks by over 70%. Shopping on Reddit continues to be an exciting opportunity. Building on our Dynamic Product Ads roadmap, we launched an alpha test of shopping listing ads.