filings.toolsItem 8. Financial Statements and Supplementary Data
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Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors
Reddit, Inc.:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Reddit, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income (loss), convertible preferred stock and stockholders’ equity (deficit), and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Sufficiency of audit evidence over ad delivery used in advertising revenue
As discussed in Notes 2 and 3 to the consolidated financial statements, the Company generated $2.1 billion of advertising revenue for the year ended December 31, 2025. The Company generates the majority of its revenues through the sale of advertising on the Company’s website and mobile applications. Advertising revenue is recognized after transferring control of the promised goods or services to customers, which occurs when a user clicks on an ad contracted on a cost per click basis, views an ad contracted on a cost per thousand impressions basis, views a video ad contracted on a cost per view basis, or on a fixed fee basis, based upon ad delivery over the service period.
We identified the evaluation of the sufficiency of audit evidence over advertising revenue as a critical audit matter. Subjective auditor judgment was required to evaluate the sufficiency of audit evidence over advertising revenue due to the proprietary IT system used to capture and track ad delivery and the quantity of ad impressions used in revenue recognition. Specialized skills and knowledge were needed to test the IT system used for the capture and tracking of ad delivery used to process and record advertising revenue.
The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over advertising revenue. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s advertising revenue recognition process, including controls related to the accurate capture and tracking of ad delivery. We involved IT professionals with specialized skills and knowledge, who assisted in testing certain IT application controls and general IT controls used by the Company to accurately capture and track delivery quantity of ad impressions. We performed a software-assisted data analysis to test relationships among certain revenue transactions. For a selection of advertising revenue transactions, we assessed the recorded revenue by comparing the amounts recognized for consistency with underlying documentation, including contract terms, ads delivered, accounts receivable, and subsequent cash received, if applicable. For certain customers, we assessed the recorded advertising revenue by comparing total cash received during the year, adjusted for reconciling items, to the advertising revenue recognized. We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of the audit effort.
/s/ KPMG LLP
We have served as the Company’s auditor since 2019.
San Francisco, California
February 5, 2026
Reddit, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share amounts)
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 953,569 | $ | 562,092 | |||||||
| Marketable securities | 1,523,242 | 1,278,717 | |||||||||
| Accounts receivable, net | 590,162 | 349,534 | |||||||||
| Prepaid expenses and other current assets | 69,012 | 33,058 | |||||||||
| Total current assets | 3,135,985 | 2,223,401 | |||||||||
| Property and equipment, net | 12,710 | 12,652 | |||||||||
| Operating lease right-of-use assets, net | 20,788 | 23,249 | |||||||||
| Intangible assets, net | 15,521 | 25,424 | |||||||||
| Goodwill | 42,174 | 42,174 | |||||||||
| Other noncurrent assets | 11,995 | 9,695 | |||||||||
| Total assets | $ | 3,239,173 | $ | 2,336,595 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 62,929 | $ | 45,423 | |||||||
| Operating lease liabilities | 7,023 | 6,137 | |||||||||
| Accrued expenses and other current liabilities | 201,331 | 124,464 | |||||||||
| Total current liabilities | 271,283 | 176,024 | |||||||||
| Operating lease liabilities, noncurrent | 16,191 | 20,565 | |||||||||
| Other noncurrent liabilities | 22,661 | 9,257 | |||||||||
| Total liabilities | 310,135 | 205,846 | |||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Stockholders’ equity (deficit): | |||||||||||
| Preferred stock, par value $0.0001 per share; 100,000,000 authorized as of December 31, 2025 and 2024; no shares issued and outstanding as of December 31, 2025 and 2024 | — | — | |||||||||
| Class A common stock, par value $0.0001 per share; 2,000,000,000 shares authorized as of December 31, 2025 and 2024; 139,218,373 and 125,001,880 shares issued and outstanding as of December 31, 2025 and 2024, respectively | 14 | 12 | |||||||||
| Class B common stock, par value $0.0001 per share; 140,000,000 shares authorized as of December 31, 2025 and 2024; 51,673,735 and 55,314,099 shares issued and outstanding as of December 31, 2025 and 2024, respectively | 5 | 5 | |||||||||
| Class C common stock, par value $0.0001 per share; 100,000,000 shares authorized as of December 31, 2025 and 2024; no shares issued and outstanding as of December 31, 2025 and 2024 | — | — | |||||||||
| Additional paid-in capital | 3,595,772 | 3,331,546 | |||||||||
| Accumulated other comprehensive income (loss) | 4,364 | 24 | |||||||||
| Accumulated deficit | (671,117) | (1,200,838) | |||||||||
| Total stockholders’ equity (deficit) | 2,929,038 | 2,130,749 | |||||||||
| Total liabilities and stockholders’ equity (deficit) | $ | 3,239,173 | $ | 2,336,595 |
The accompanying notes are an integral part of these financial statements.
Reddit, Inc.
Consolidated Statements of Operations
(in thousands, except share and per share amounts)
| Year ended December 31, | |||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||
| Revenue | $ | 2,202,506 | $ | 1,300,205 | $ | 804,029 | |||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||
| Cost of revenue | 194,216 | 123,595 | 111,011 | ||||||||||||||||||||
| Research and development | 783,145 | 935,152 | 438,346 | ||||||||||||||||||||
| Sales and marketing | 503,863 | 350,579 | 230,175 | ||||||||||||||||||||
| General and administrative | 279,298 | 451,447 | 164,658 | ||||||||||||||||||||
| Total costs and expenses | 1,760,522 | 1,860,773 | 944,190 | ||||||||||||||||||||
| Income (loss) from operations | 441,984 | (560,568) | (140,161) | ||||||||||||||||||||
| Other income (expense), net | 86,706 | 75,361 | 53,138 | ||||||||||||||||||||
| Income (loss) before income taxes | 528,690 | (485,207) | (87,023) | ||||||||||||||||||||
| Income tax expense (benefit) | (1,031) | (931) | 3,801 | ||||||||||||||||||||
| Net income (loss) | $ | 529,721 | $ | (484,276) | $ | (90,824) | |||||||||||||||||
| Net income (loss) per share attributable to Class A and Class B common stock (Note 4) | |||||||||||||||||||||||
| Basic | $ | 2.84 | $ | (3.33) | $ | (1.54) | |||||||||||||||||
| Diluted | $ | 2.62 | $ | (3.33) | $ | (1.54) | |||||||||||||||||
| Weighted-average shares of Class A and Class B common stock used to compute net income (loss) per share attributable to common stockholders | |||||||||||||||||||||||
| Basic | 186,383,271 | 145,472,389 | 59,138,086 | ||||||||||||||||||||
| Diluted | 202,107,978 | 145,472,389 | 59,138,086 |
The accompanying notes are an integral part of these financial statements.
Reddit, Inc.
Consolidated Statements of Comprehensive Income (Loss)
(in thousands)
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Net income (loss) | $ | 529,721 | $ | (484,276) | $ | (90,824) | |||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||
| Change in unrealized gains (losses) on marketable securities | 954 | 258 | 4,606 | ||||||||||||||
| Change in foreign currency translation adjustment | 3,386 | (1,048) | — | ||||||||||||||
| Net comprehensive income (loss) | $ | 534,061 | $ | (485,066) | $ | (86,218) |
The accompanying notes are an integral part of these financial statements.
Reddit, Inc.
Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)
(in thousands, except share amounts)
| Total Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Stockholders’ Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A | Class B | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | 73,021,449 | $ | 1,853,492 | 6,381,936 | $ | — | 51,410,111 | $ | 6 | $ | 250,460 | $ | (3,792) | $ | (625,738) | $ | (379,064) | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options, net | — | — | 489,959 | — | 2,494,093 | — | 8,390 | — | — | 8,390 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of restricted stock units, net | — | — | 227,805 | — | — | — | (4,320) | — | — | (4,320) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | 47,598 | — | — | 47,598 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of early exercised stock options | — | — | — | — | — | — | 692 | — | — | 692 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | (90,824) | (90,824) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in other comprehensive income (loss) | — | — | — | — | — | — | — | 4,606 | — | 4,606 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2023 | 73,021,449 | $ | 1,853,492 | 7,099,700 | $ | — | 53,904,204 | $ | 6 | $ | 302,820 | $ | 814 | $ | (716,562) | $ | (412,922) | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options, net | — | — | 10,979,938 | — | 4,038,255 | — | 88,972 | — | — | 88,972 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of restricted stock units, net | — | — | 11,501,630 | 1 | 1,002,455 | — | (294,572) | — | — | (294,571) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Class B common stock to Class A common stock | — | — | 71,548,247 | 8 | (71,548,247) | (8) | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of redeemable convertible preferred stock to common stock in connection with initial public offering | (73,021,449) | (1,853,492) | 5,104,017 | 1 | 67,917,432 | 7 | 1,853,486 | — | — | 1,853,494 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock in connection with initial public offering, net of underwriting discounts and commissions and other offering costs | — | — | 18,576,527 | 2 | — | — | 576,266 | — | — | 576,268 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of Class A common stock in connection with acquisitions | — | — | 191,821 | — | — | — | 2,786 | — | — | 2,786 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | 801,646 | — | — | 801,646 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vesting of early exercised stock options | — | — | — | — | — | — | 142 | — | — | 142 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | (484,276) | (484,276) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in other comprehensive income (loss) | — | — | — | — | — | — | — | (790) | — | (790) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | — | $ | — | 125,001,880 | $ | 12 | 55,314,099 | $ | 5 | $ | 3,331,546 | $ | 24 | $ | (1,200,838) | $ | 2,130,749 | |||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of stock options, net | — | — | 2,179,307 | 1 | 1,653,969 | — | 25,075 | — | — | 25,076 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon settlement of restricted stock units, net | — | — | 6,639,347 | 1 | 103,506 | — | (104,029) | — | — | (104,028) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion of Class B common stock to Class A common stock | — | — | 5,397,839 | — | (5,397,839) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | 343,180 | — | — | 343,180 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | — | — | — | — | 529,721 | 529,721 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in other comprehensive income (loss) | — | — | — | — | — | — | — | 4,340 | — | 4,340 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | — | $ | — | 139,218,373 | $ | 14 | 51,673,735 | $ | 5 | $ | 3,595,772 | $ | 4,364 | $ | (671,117) | $ | 2,929,038 |
The accompanying notes are an integral part of these financial statements.
Reddit, Inc.
Consolidated Statements of Cash Flows
(in thousands)
| Year ended December 31, | |||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||
| Cash flows from operating activities | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 529,721 | $ | (484,276) | $ | (90,824) | |||||||||||||||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||||||||||||||||||
| Depreciation and amortization | 15,948 | 15,643 | 13,702 | ||||||||||||||||||||||||||
| Non-cash operating lease cost | 6,197 | 4,110 | 11,359 | ||||||||||||||||||||||||||
| Amortization of premium (accretion of discount) on marketable securities, net | (28,214) | (43,400) | (27,442) | ||||||||||||||||||||||||||
| Stock-based compensation expense | 343,180 | 801,646 | 47,598 | ||||||||||||||||||||||||||
| Other adjustments | 848 | (4,187) | 484 | ||||||||||||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||||||||||||||
| Accounts receivable | (241,356) | (104,280) | (53,318) | ||||||||||||||||||||||||||
| Prepaid expenses and other assets | (37,082) | (19,485) | 3,878 | ||||||||||||||||||||||||||
| Operating lease right-of-use assets and liabilities | (7,224) | (2,397) | (5,758) | ||||||||||||||||||||||||||
| Accounts payable | 18,166 | (570) | 12,470 | ||||||||||||||||||||||||||
| Accrued expenses and other liabilities | 90,691 | 59,264 | 12,737 | ||||||||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 690,875 | $ | 222,068 | $ | (75,114) | |||||||||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||||||||||||||
| Purchases of property and equipment | (6,706) | (6,248) | (9,724) | ||||||||||||||||||||||||||
| Purchases of marketable securities | (2,298,397) | (1,996,725) | (1,259,854) | ||||||||||||||||||||||||||
| Maturities of marketable securities | 2,065,971 | 1,573,602 | 1,273,159 | ||||||||||||||||||||||||||
| Proceeds from sale of marketable securities | 17,234 | — | 37,538 | ||||||||||||||||||||||||||
| Cash paid for acquisitions, net of cash acquired | — | (17,137) | — | ||||||||||||||||||||||||||
| Other investing activities | 3,009 | 5,821 | 172 | ||||||||||||||||||||||||||
| Net cash provided by (used in) investing activities | $ | (218,889) | $ | (440,687) | $ | 41,291 | |||||||||||||||||||||||
| Cash flows from financing activities | |||||||||||||||||||||||||||||
| Proceeds from issuance of Class A common stock in initial public offering, net of underwriting discounts and commissions | — | 600,022 | — | ||||||||||||||||||||||||||
| Proceeds from exercise of employee stock options | 25,075 | 88,972 | 8,428 | ||||||||||||||||||||||||||
| Taxes paid related to net share settlement of restricted stock units | (104,028) | (294,573) | (4,320) | ||||||||||||||||||||||||||
| Payments of initial public offering costs | — | (8,775) | (1,441) | ||||||||||||||||||||||||||
| Other financing activities | (1,606) | (6,111) | (3,478) | ||||||||||||||||||||||||||
| Net cash provided by (used in) financing activities | $ | (80,559) | $ | 379,535 | $ | (811) | |||||||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 391,427 | 160,916 | (34,634) | ||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash at the beginning of the period | 562,142 | 401,226 | 435,860 | ||||||||||||||||||||||||||
| Cash, cash equivalents, and restricted cash at the end of the period | $ | 953,569 | $ | 562,142 | $ | 401,226 | |||||||||||||||||||||||
| Cash and cash equivalents | 953,569 | 562,092 | 401,176 | ||||||||||||||||||||||||||
| Restricted cash | — | 50 | 50 | ||||||||||||||||||||||||||
| Total cash, cash equivalents, and restricted cash | $ | 953,569 | $ | 562,142 | $ | 401,226 | |||||||||||||||||||||||
| Supplemental disclosure of noncash financing and investing activities | |||||||||||||||||||||||||||||
| Conversion of convertible preferred stock to common stock upon initial public offering | $ | — | $ | 1,853,492 | $ | — | |||||||||||||||||||||||
| Reclassification of deferred offering costs to additional paid-in capital upon initial public offering | $ | — | $ | 23,754 | $ | — | |||||||||||||||||||||||
The accompanying notes are an integral part of these financial statements.
Reddit, Inc.
Notes to the Consolidated Financial Statements
1. Description of Business
Reddit, Inc. (“Reddit,” “we,” “our,” or “us”) was incorporated in the state of Delaware. Our mission is to empower communities and make their knowledge accessible to everyone. We built Reddit with the belief that communities unlock the power of human creativity and create a sense of belonging and empowerment for their members. We believe the world needs community more than ever, and that this represents our greatest opportunity to further enrich the lives of everyone in the world. We are headquartered in San Francisco, California, and have several offices around the world.
2. Basis of Presentation and Significant Accounting Policies
Basis of Presentation
Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). Our consolidated financial statements include the accounts of Reddit, Inc. and our wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Initial Public Offering
On March 20, 2024, our initial public offering (“IPO”) was declared effective and our Class A common stock began trading on the New York Stock Exchange on March 21, 2024. On March 25, 2024, we completed our IPO in which we issued and sold 18,576,527 shares of Class A common stock, including 3,300,000 shares of Class A common stock pursuant to the underwriters’ exercise in full of their over-allotment option, and excluding 6,723,473 shares of Class A common stock sold in the IPO by certain of our existing stockholders, at a public offering price of $34.00 per share. We received net proceeds of $600.0 million after deducting underwriting discounts and commissions of $31.6 million. In connection with the closing of the IPO, all shares of our then-outstanding convertible preferred stock other than Series F-1 preferred stock automatically converted into an aggregate of 67,917,432 shares of Class B common stock and all then-outstanding shares of Series F-1 preferred stock automatically converted into 5,104,017 shares of Class A common stock. Following the IPO, we have three classes of authorized common stock — Class A common stock, Class B common stock, and Class C common stock.
Certain of our restricted stock units granted to employees included both service-based and performance-based vesting conditions (“Double Trigger RSUs”). The performance condition related to these awards was satisfied upon the effectiveness of the IPO. Upon the effectiveness of the IPO, we recognized $534.7 million of stock-based compensation expense. To meet the related tax withholding requirements, we withheld 4,861,113 shares of the 10,502,390 shares of Class A common stock issued and 723,341 shares of the 1,347,456 shares of Class B common stock issued. Based on the IPO public offering price of $34.00 per share, the tax withholding obligation was $189.9 million.
In connection with our IPO, we amended and restated our certificate of incorporation (“Restated Certificate”) which authorized 2,340,000,000 shares of capital stock, consisting of 2,000,000,000 shares of Class A common stock, 140,000,000 shares of Class B common stock, 100,000,000 shares of Class C common stock, and 100,000,000 shares of undesignated preferred stock.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Management’s estimates are based on historical information available as of the date of the consolidated financial statements and various other assumptions that we believe are reasonable under the circumstances. Actual results could differ materially from those estimates.
Significant estimates relate primarily to determining the fair value of stock-based awards, the fair value of assets and liabilities assumed in business combinations, and the incremental borrowing rate used to determine operating lease right-of-use assets and lease liabilities. On an ongoing basis, management evaluates our estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.
Revenue Recognition
We generate a majority of our revenue through the sale of advertising on our mobile applications and website. Other revenue consists of revenue from content licensing and products sold directly to users.
Reddit, Inc.
Notes to the Consolidated Financial Statements
We determine revenue recognition by identifying the contract or contracts with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations in the contract, and recognizing revenue when, or as, we satisfy a performance obligation.
For customer contracts that include multiple performance obligations, we identify each distinct performance obligation and determine the transaction price, which may include an estimation of variable consideration, subject to constraint. The transaction price is allocated to each performance obligation using the stand-alone selling price, which is generally based on the observable price of each good or service.
Payments for revenue arrangements are due based on the contractually stated payment terms, usually within 30 to 60 days. Sales and other similar taxes are excluded from revenue.
Advertising Revenue
We recognize advertising revenue only after transferring control of promised goods or services to customers, which occurs when a user clicks on an ad contracted on a cost per click (“CPC”) basis, views an ad contracted on a cost per thousand impressions (“CPM”) basis, views a video ad contracted on a cost per view (“CPV”) basis, or on a fixed fee basis, based upon ad delivery over the service period, which is typically less than 30 days in duration. Generally, we recognize advertising revenue on a gross basis since we control the advertising units before being transferred to our users. In arrangements where another party is involved in providing specified services to a customer, we evaluate whether we are the principal or agent. In this evaluation, we consider if we obtain control of the specified goods or services before they are transferred to the customer. For advertising revenue arrangements where we are not the principal, we recognize revenue on a net basis. For the periods presented, revenue for arrangements where we are the agent was not material.
The transaction price in advertising arrangements is generally calculated as the number of advertising units delivered multiplied by the contractually agreed upon CPC, CPM, or CPV, or on a fixed fee basis and revenue is recognized based on the number of clicks, impressions, or views, or ratable over the service period, respectively.
Other Revenue
In our content licensing arrangements, we provide customers with the right to access content from our platform over the contractual period. The transaction price in content licensing arrangements is generally a fixed fee or usage-based fee. We recognize content licensing revenue as our content partners consume and benefit from their use of the licensed content, which is generally ratably over the license period. Revenue from products sold directly to users, including Reddit Premium and Reddit Gold, was not material for the periods presented.
Cost of Revenue
Cost of revenue consists primarily of payments to third parties for the cost of hosting and supporting our mobile applications and website. In addition, cost of revenue includes expenses directly associated with the delivery of our advertising and other services, including advertising targeting and measurement services, credit card and other transaction processing fees, and payments to our content partners. Cost of revenue also consists of employee-related costs, including salaries, benefits, and stock-based compensation.
Research and Development Expenses
Research and development expenses consist primarily of employee-related costs including salaries, benefits, and stock-based compensation for engineers and other employees engaged in the research, design, and development of new and existing products. Research and development expenses also include hosting costs associated with internal research and development activities, as well as professional services, allocated facilities, and other supporting overhead costs.
Sales and Marketing Expenses
Sales and marketing expenses consist primarily of employee-related costs including salaries, benefits, and stock-based compensation for employees engaged in sales, sales support, business and brand development, marketing, and customer service functions. Sales commissions are expensed as incurred in sales and marketing expenses as the expected period of benefit is one year or less. Sales and marketing expenses also include costs incurred for advertising, marketing, and other promotional expenditures, as well as professional services, allocated facilities, and other supporting overhead costs.
Reddit, Inc.
Notes to the Consolidated Financial Statements
General and Administrative Expenses
General and administrative expenses consist primarily of employee-related costs including salaries, benefits, and stock-based compensation for certain executives as well as employees engaged in finance, legal, human resources, information technology, and other administrative teams. General and administrative expenses also include costs incurred for professional services, non-income based taxes, insurance, allocated facilities, and other supporting overhead costs.
Advertising Costs
Advertising costs are expensed as incurred and were $102.4 million for the year ended December 31, 2025. Advertising costs were immaterial for the years ended December 31, 2024 and 2023.
Stock-Based Compensation
We measure and recognize compensation expense for stock-based awards, including restricted stock units (“RSUs”), restricted stock awards (“RSAs”), and stock options granted to employees and non-employees based on the grant date fair value of the awards granted.
Income Taxes
We account for income taxes using an asset and liability approach. Under this method, the tax provision includes taxes currently due plus the net change in deferred tax assets and liabilities. Deferred tax assets and liabilities arise from temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements, as well as from net operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the tax rates expected to be in effect when the taxes will be paid or refund received, as provided for under currently enacted tax law. In assessing the need for a valuation allowance, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded. Should there be a change in the ability to recover deferred tax assets, the income tax provision would increase or decrease in the period in which the assessment is changed.
We recognize the effect of income tax positions only if those positions are more likely than not to be sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Any interest and penalties related to unrecognized tax benefits are recognized as income tax expense in the consolidated statements of operations.
Functional Currency
Generally, the U.S. dollar is the functional currency for our subsidiaries, and therefore, foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at exchange rates at the balance sheet date and foreign currency denominated non-monetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Gains or losses from foreign currency remeasurement and settlements are included in other income (expense), net in the consolidated statements of operations. For those foreign subsidiaries where the local currency is the functional currency, we translate the financial statements to U.S. dollars at exchange rates at the balance sheet date for assets and liabilities and at monthly average exchange rates for revenues and expenses. Translation gains and losses are recorded in accumulated other comprehensive income (loss) as a component of stockholders' equity (deficit). Net foreign exchange gains and losses were not material for the years ended December 31, 2025, 2024, and 2023.
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents consist of highly liquid investments with original maturities of 90 days or less from the date of purchase. We define restricted cash as cash that cannot be withdrawn or used for general operating activities. Restricted cash is classified as current or noncurrent assets based on the contractual or estimated term of the remaining restriction. As of December 31, 2024, restricted cash included in other noncurrent assets in the consolidated balance sheets was not material.
Marketable Securities
We hold investments in marketable securities consisting of U.S. and non-U.S. government securities, investment-grade corporate and government agency securities, time deposits, and commercial paper. We classify our marketable securities as available-for-sale investments in current assets because they represent investments available for current operations. Our
Reddit, Inc.
Notes to the Consolidated Financial Statements
available-for-sale investments are carried at fair value with any unrealized gains and losses included in accumulated other comprehensive income (loss) in stockholders’ equity (deficit). Expected losses from credit related impairment, if any, are recognized through an allowance for credit losses and adjusted each period for changes in credit risk. Gains or losses on the sale or maturities of marketable securities are determined using the specific identification method and recorded in other income (expense), net in our consolidated statements of operations.
Fair Value Measurements
Certain financial instruments are required to be recorded at fair value. Other financial instruments, including cash, cash equivalents, and restricted cash, are recorded at cost, which approximates fair value. Additionally, the carrying amounts of accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value due to their short-term nature.
Accounts Receivable, Net
Accounts receivable are recorded at the invoiced amount, net of any allowance for doubtful accounts due to expected credit losses and potentially uncollectible receivables. We apply a “single loss” rate approach to the overall accounts receivable portfolio and also evaluate the aging, historical write-offs, and collectability of accounts receivable on a customer-by-customer basis. The allowance for doubtful accounts was immaterial as of December 31, 2025 and 2024.
Contract Assets
When revenue recognition exceeds the amounts billable on a contract, the difference is recorded as an unbilled receivable if there is an unconditional right to bill in the future or as a contract asset if the right is conditional upon something other than the passage of time. Unbilled receivables are included within accounts receivable, net. The current portion of contract assets are included within prepaid expenses and other current assets and the noncurrent portion of contract assets are included within other noncurrent assets on the consolidated balance sheets. Contract assets were not material as of December 31, 2025 and 2024.
Property and Equipment, Net
Property and equipment are stated at cost, less accumulated depreciation. We compute depreciation using the straight-line method over the estimated useful lives of the assets, which is generally three to five years for computer equipment, furniture, and fixtures. Leasehold improvements are depreciated over the shorter of the lease term or the useful life of the assets. Maintenance and repairs are expensed as incurred.
Software Development Costs
Software development costs include costs to develop software to be used to meet internal needs and applications used to deliver our services. We capitalize development costs related to these software applications once the preliminary project stage is complete, it is probable that the project will be completed, and the software will be used to perform the function intended. Due to the iterative process of our development projects, development costs meeting our capitalization criteria were not material for the periods presented.
Leases
Leases arise from contractual obligations that convey the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. We determine if a contract is, or contains, a lease at contract inception. All of our leases are operating leases and are included in operating lease right-of-use assets, net, operating lease liabilities, and operating lease liabilities, non-current on the consolidated balance sheets.
Operating lease right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term discounted using our incremental borrowing rate. Operating lease right-of-use assets also include any lease payments made and exclude lease incentives. As our leases do not provide an implicit rate, the incremental borrowing rate used is estimated based on what we would have to pay on a collateralized basis over a similar term as the lease. Lease payments include fixed payments and any variable payments based on an index or rate, and are recognized as lease expense on a straight-line basis over the term of the lease.
Reddit, Inc.
Notes to the Consolidated Financial Statements
Business Combinations
We include the results of operations of the businesses that we acquire from the date of acquisition. We determine the fair value of the assets acquired and liabilities assumed based on their estimated fair values as of the respective date of acquisition. The excess purchase price over the fair values of identifiable assets and liabilities is recorded as goodwill. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates including the selection of valuation methodologies, estimates of future revenues and cash flows, discount rates, and selection of comparable companies. Our estimates of fair value are based on assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
When we issue cash payments or grants of equity to selling stockholders in connection with an acquisition, we evaluate whether the payments or awards are compensatory. This evaluation includes whether cash payments or stock award vesting is contingent on the continued employment of the selling stockholder beyond the acquisition date. If continued employment is required for the cash to be paid or stock awards to vest, the award is treated as compensation for post-acquisition services and is recognized as compensation expense.
Transaction costs associated with business combinations are expensed as incurred and are included in general and administrative expenses in our consolidated statements of operations.
Goodwill
Goodwill represents the excess of the aggregate purchase consideration over the fair value of net assets acquired in a business combination. We perform our annual impairment test on October 1. We also test for impairment whenever events or circumstances indicate that the fair value of goodwill has been impaired. Our impairment tests are based on a single operating segment and reporting unit structure. No impairment charges were recorded during the years ended December 31, 2025, 2024, and 2023.
Acquired Intangible Assets
Identifiable acquired intangible assets consist primarily of acquisition-related developed technology. We determine the appropriate useful life of our intangible assets by performing an analysis of expected cash flows of the acquired assets. Intangible assets are amortized on a straight-line basis over the estimated useful life of up to five years.
Impairment of Long-Lived Assets
We evaluate recoverability of our property and equipment and definite-lived intangible assets when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Events and changes in circumstances considered in determining whether the carrying value of long-lived assets may not be recoverable include significant changes in performance relative to expected operating results, significant changes in asset use, significant negative industry or economic trends, and changes in our business strategy. Recoverability of these assets is measured by comparison of their carrying amount to future undiscounted cash flows to be generated. If impairment is indicated based on a comparison of the assets’ carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount exceeds the fair value of the assets. We determined that there were no events or changes in circumstances that indicated our long-lived assets were impaired during the periods presented.
Concentration of Business Risk
We primarily use Amazon Web Services and Google Cloud Platform for our hosting requirements. A disruption or loss of service from Amazon Web Services or Google Cloud Platform could harm our ability to operate. Although we believe there are other qualified providers that can provide these services, a transition to a new provider could create a disruption to our business and negatively impact our operating results.
Concentration of Credit Risk
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents, restricted cash, marketable securities, and accounts receivable. We maintain cash and cash equivalents with several financial institutions. We believe that the financial institutions that hold our cash and cash equivalents are financially sound and, accordingly, minimal credit risks exist with respect to these balances. We maintain investments in U.S. and non-U.S. government securities, investment-grade corporate and government agency securities, time deposits, commercial paper,
Reddit, Inc.
Notes to the Consolidated Financial Statements
and money market accounts that carry high credit ratings and accordingly, minimal credit risk exists with respect to these balances.
No customer accounted for greater than 10% of our revenues for the years ended December 31, 2025, 2024, and 2023. No customer accounted for greater than 10% of our accounts receivable as of December 31, 2025 and 2024.
Segments
We have determined that we have a single operating segment. Our Chief Executive Officer is our chief operating decision maker who evaluates performance and makes operating decisions about allocating resources based on consolidated financial data.
Recently Adopted Accounting Pronouncements
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires an entity to disclose specific categories in the effective tax rate reconciliation as well as provide additional information for reconciling items that meet a quantitative threshold. This standard also requires certain disaggregated disclosures related to income from continuing operations, income tax expense, and income taxes paid. We adopted this standard effective January 1, 2025 on a prospective basis. Adoption of this standard resulted in changes to the effective tax rate reconciliation as reflected in Note 15—Income Taxes.
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires an entity to disclose disaggregated information about certain income statement expense line items. The standard is effective for us beginning January 1, 2027, with early adoption permitted. We are currently evaluating the impact the adoption will have on our disclosures.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which aims to modernize the accounting for internal-use software costs to better align with current software development practices by removing references to prescriptive software development stages and establishing a new principle for when to begin capitalizing such costs. The standard is effective for us beginning January 1, 2028. We are currently evaluating the impact the adoption will have on our consolidated financial statements.
3. Revenue
The following table represents our revenue disaggregated by source:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Advertising revenue | $ | 2,062,480 | $ | 1,185,456 | $ | 788,782 | |||||||||||
| Other revenue | 140,026 | 114,749 | 15,247 | ||||||||||||||
| Total revenue | $ | 2,202,506 | $ | 1,300,205 | $ | 804,029 |
Reddit, Inc.
Notes to the Consolidated Financial Statements
The following table represents our revenue disaggregated by geography based on the billing address of the customer:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| United States | $ | 1,785,554 | $ | 1,063,556 | $ | 651,378 | |||||||||||
| Rest of world(1) | 416,952 | 236,649 | 152,651 | ||||||||||||||
| Total revenue | $ | 2,202,506 | $ | 1,300,205 | $ | 804,029 |
(1)Other than the United States, no individual country represented 10% or more of total revenue during the years ended December 31, 2025, 2024, and 2023.
Deferred revenue was $18.1 million and $14.9 million as of December 31, 2025 and 2024, respectively. For the years ended December 31, 2025, 2024, and 2023, substantially all of the beginning deferred revenue balance was recognized as revenue during the respective period.
As of December 31, 2025, the aggregate amount of remaining performance obligations in contracts with an original expected duration exceeding one year was $143.7 million. This amount consists primarily of long-term content licensing contracts and excludes deferred revenue related to short-term advertising contracts and Reddit Premium subscriptions. We expect to recognize $118.9 million in 2026 and $24.8 million in 2027.
4. Net Income (Loss) per Share
We compute net income (loss) per share of Class A and Class B common stock using the two-class method required for multiple classes of common stock and participating securities. Prior to our IPO, our participating securities included Series A, Series A-1, Series B, Series C, Series D, Series D-1, Series E, Series F, and Series F-1 convertible preferred stock, as the holders of these series of preferred stock were entitled to receive noncumulative dividends subject to certain requirements at an annual rate of 8% of the respective original issue price then in effect in the event that a dividend was paid on common stock.
In connection with our IPO, our Series A, Series A-1, Series B, Series C, Series D, Series D-1, Series E, and Series F preferred stock converted on a one-to-one basis into 67,917,432 shares of Class B common stock, and our Series F-1 preferred stock converted on a one-to-one basis into 5,104,017 shares of Class A common stock. For the year ended December 31, 2024, these shares were weighted in the denominator of net income (loss) per share for Class A and Class B common stock for the portion of the time outstanding subsequent to our IPO.
The holders of Series A, Series A-1, Series B, Series C, Series D, Series D-1, Series E, Series F, and Series F-1 convertible preferred stock did not have a contractual obligation to share in our losses. As such, our net loss for the year ended December 31, 2023 was not allocated to these participating securities.
Reddit, Inc.
Notes to the Consolidated Financial Statements
The following table presents the calculation of basic and diluted net income (loss) per share attributable to common stock:
| Year ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Class A | Class B | Class A | Class B | Class A | Class B | ||||||||||||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||||||||||||||||
| Basic net income (loss) per share attributable to common stockholders: | |||||||||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 376,971 | $ | 152,750 | $ | (231,631) | $ | (252,645) | $ | (11,033) | $ | (79,791) | |||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||||||||
| Basic weighted-average common shares outstanding | 132,637,767 | 53,745,504 | 69,580,048 | 75,892,341 | 7,183,723 | 51,954,363 | |||||||||||||||||||||||||||||
| Basic income (loss) per share attributable to common stockholders | $ | 2.84 | $ | 2.84 | $ | (3.33) | $ | (3.33) | $ | (1.54) | $ | (1.54) | |||||||||||||||||||||||
| Diluted net income (loss) per share attributable to common stockholders: | |||||||||||||||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | 388,855 | $ | 140,866 | $ | (231,631) | $ | (252,645) | $ | (11,033) | $ | (79,791) | |||||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||||||||||||||
| Basic weighted-average common shares outstanding | 132,637,767 | 53,745,504 | 69,580,048 | 75,892,341 | 7,183,723 | 51,954,363 | |||||||||||||||||||||||||||||
| Weighted-average effect of dilutive potential common stock | 15,724,707 | — | — | — | — | — | |||||||||||||||||||||||||||||
| Shares used in computation of diluted net income (loss) per share attributable to common stockholders | 148,362,474 | 53,745,504 | 69,580,048 | 75,892,341 | 7,183,723 | 51,954,363 | |||||||||||||||||||||||||||||
| Diluted net income (loss) per share attributable to common stockholders | $ | 2.62 | $ | 2.62 | $ | (3.33) | $ | (3.33) | $ | (1.54) | $ | (1.54) |
The following outstanding potentially dilutive shares, including stock options that have been exercised prior to vesting, were excluded from the computation of diluted net income (loss) per share attributable to common stock for the periods presented because the impact of including them would have been anti-dilutive.
| Year ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Class A | Class B | Class A | Class B | Class A | Class B | ||||||||||||||||||||||||||||||
| Stock options | — | — | 11,501,771 | 3,185,767 | 22,600,876 | 7,213,522 | |||||||||||||||||||||||||||||
| Unvested RSUs and RSAs | 274,742 | — | 10,746,145 | 598,102 | 24,166,383 | 2,720,150 | |||||||||||||||||||||||||||||
| Preferred shares | — | — | — | — | 5,104,017 | 67,917,432 | |||||||||||||||||||||||||||||
| 274,742 | — | 22,247,916 | 3,783,869 | 51,871,276 | 77,851,104 |
5. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:
-
Level 1: Quoted market prices in active markets for identical assets or liabilities
-
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data
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Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions or external inputs from inactive markets
We classify our cash equivalents and marketable securities within Level 1 or Level 2 because we use quoted market prices or alternative pricing sources and models utilizing market observable inputs to determine their fair value. There were no transfers between levels during the periods presented.
Reddit, Inc.
Notes to the Consolidated Financial Statements
The following tables set forth our financial assets that are measured at fair value on a recurring basis:
| December 31, 2025 | |||||||||||||||||||||||||||||
| Fair value hierarchy level | Cost or amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||||||||
| Money market funds | Level 1 | $ | 825,323 | $ | — | $ | — | $ | 825,323 | ||||||||||||||||||||
| U.S. treasury securities | Level 1 | 11,934 | 1 | — | 11,935 | ||||||||||||||||||||||||
| Time deposits | Level 2 | 25,949 | — | — | 25,949 | ||||||||||||||||||||||||
| Marketable securities: | |||||||||||||||||||||||||||||
| U.S. treasury securities | Level 1 | 450,474 | 1,035 | (2) | 451,507 | ||||||||||||||||||||||||
| U.S. agency bonds | Level 2 | 410,655 | 167 | (134) | 410,688 | ||||||||||||||||||||||||
| Corporate bonds | Level 2 | 306,321 | 820 | (13) | 307,128 | ||||||||||||||||||||||||
| Time deposits | Level 2 | 140,000 | — | — | 140,000 | ||||||||||||||||||||||||
| Commercial paper | Level 2 | 213,767 | 152 | — | 213,919 | ||||||||||||||||||||||||
| Total | $ | 2,384,423 | $ | 2,175 | $ | (149) | $ | 2,386,449 |
| December 31, 2024 | |||||||||||||||||||||||||||||
| Fair value hierarchy level | Cost or amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | |||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Cash equivalents: | |||||||||||||||||||||||||||||
| Money market funds | Level 1 | $ | 497,461 | $ | — | $ | — | $ | 497,461 | ||||||||||||||||||||
| U.S. treasury securities | Level 1 | 5,979 | 2 | — | 5,981 | ||||||||||||||||||||||||
| Corporate bonds | Level 2 | 1,066 | 2 | — | 1,068 | ||||||||||||||||||||||||
| Marketable securities: | |||||||||||||||||||||||||||||
| U.S. treasury securities | Level 1 | 817,996 | 1,120 | (396) | 818,720 | ||||||||||||||||||||||||
| U.S. agency bonds | Level 2 | 117,965 | 15 | (62) | 117,918 | ||||||||||||||||||||||||
| Corporate bonds | Level 2 | 159,424 | 400 | (86) | 159,738 | ||||||||||||||||||||||||
| Commercial paper | Level 2 | 182,264 | 99 | (22) | 182,341 | ||||||||||||||||||||||||
| Total | $ | 1,782,155 | $ | 1,638 | $ | (566) | $ | 1,783,227 |
Gross unrealized losses within accumulated other comprehensive income (loss) were immaterial as of December 31, 2025 and 2024. There were no impairment charges due to credit losses during the years ended December 31, 2025, 2024, and 2023.
As of December 31, 2025, the amortized cost of marketable securities with maturities less than one year was $883.9 million. The amortized cost of marketable securities with maturities between one and five years was $637.3 million.
Reddit, Inc.
Notes to the Consolidated Financial Statements
6. Balance Sheet Components
Property and Equipment, Net
Property and equipment, net consisted of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Computer equipment, furniture, and fixtures | $ | 19,614 | $ | 15,832 | |||||||
| Leasehold improvements | 9,361 | 8,017 | |||||||||
| Total property and equipment | 28,975 | 23,849 | |||||||||
| Less: accumulated depreciation | (16,265) | (11,197) | |||||||||
| Total property and equipment, net | $ | 12,710 | $ | 12,652 |
Depreciation expense was immaterial for the years ended December 31, 2025, 2024, and 2023.
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Accrued compensation and benefits | $ | 74,750 | $ | 63,441 | |||||||
| Deferred revenue | 18,039 | 14,805 | |||||||||
| Accrued expenses | 86,200 | 31,817 | |||||||||
| Accrued revenue share payable and other | 5,984 | 6,939 | |||||||||
| Other | 16,358 | 7,462 | |||||||||
| Total accrued expenses and other current liabilities | $ | 201,331 | $ | 124,464 |
Other Noncurrent Liabilities
Other noncurrent liabilities consisted of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in thousands) | |||||||||||
| Accrued customer incentives | $ | 22,555 | $ | 9,100 | |||||||
| Other | 106 | 157 | |||||||||
| Total other noncurrent liabilities | $ | 22,661 | $ | 9,257 |
7. Operating Leases
We have entered into various non-cancellable operating leases agreements, primarily for the use of office space, expiring at various dates through 2029. Our lease terms include options to extend or terminate the lease when it is reasonably certain they will be exercised. We consider these options in determining the lease term on a lease-by-lease basis. We account for lease components and non-lease components as a single lease component for all leases. None of our lease agreements contain material non-lease components, material residual value guarantees, or restrictive covenants. We have elected an accounting policy to not recognize short-term leases, which have a lease term of twelve months or less, on the consolidated balance sheets.
Reddit, Inc.
Notes to the Consolidated Financial Statements
Lease Cost
The components of lease cost were as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Operating lease cost | $ | 7,756 | $ | 7,231 | $ | 13,062 | |||||||||||
| Short-term lease cost | 2,512 | 3,324 | 3,857 | ||||||||||||||
| Variable lease cost | 1,097 | 278 | 749 | ||||||||||||||
| Total lease costs | $ | 11,365 | $ | 10,833 | $ | 17,668 |
Lease Term and Discount Rate
The weighted-average remaining lease term and discount rate related to the operating leases were as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted-average remaining lease term (in years) | 3.00 | 4.00 | |||||||||
| Weighted-average discount rate | 6.22 | % | 6.48 | % |
Maturity of Lease Liabilities
The present value of our operating lease liabilities as of December 31, 2025 was as follows:
| (in thousands) | |||||
| 2026 | $ | 8,779 | |||
| 2027 | 8,728 | ||||
| 2028 | 6,993 | ||||
| 2029 | 1,500 | ||||
| Total undiscounted lease payments | 26,000 | ||||
| Less: imputed interest | (2,786) | ||||
| Present value of lease liabilities | $ | 23,214 | |||
| Operating lease liabilities | 7,023 | ||||
| Operating lease liabilities, noncurrent | 16,191 | ||||
| Total | $ | 23,214 |
Other Information
Right-of-use assets obtained in exchange for lease liabilities were immaterial for the years ended December 31, 2025 and 2024 and were $12.0 million for the year ended December 31, 2023. Cash payments included in the measurement of our operating lease liabilities were immaterial for the years ended December 31, 2025, 2024, and 2023.
8. Acquisitions
2024 Acquisition
On July 15, 2024, we completed an acquisition to enhance our technology and workforce. The aggregate purchase consideration was $19.9 million, which consisted of $17.1 million of cash consideration and $2.8 million related to the fair value of equity consideration. Additional consideration with a fair value of $10.7 million was determined to relate to post-combination expenses, primarily stock-based compensation for future employment services.
Of the aggregate purchase consideration, $4.3 million was allocated to developed technology with a useful life of three years, $15.9 million was allocated to goodwill, and the remainder was allocated to other assets acquired and liabilities assumed.
Reddit, Inc.
Notes to the Consolidated Financial Statements
The goodwill amount represents synergies from utilizing the acquired technology across our business and from the assembled workforce. Goodwill recorded in connection with the acquisition is not deductible for income tax purposes.
9. Goodwill and Intangible Assets
Goodwill
There was no change in the carrying amount of goodwill during the year ended December 31, 2025.
The change in the carrying amount of goodwill during the year ended December 31, 2024 was as follows:
| (in thousands) | |||||
| Balance as of December 31, 2023 | $ | 26,299 | |||
| Goodwill acquired | 15,875 | ||||
| Balance as of December 31, 2024 | $ | 42,174 |
Acquired Intangible Assets
Acquired intangible assets consisted of the following:
| December 31, 2025 | |||||||||||||||||||||||
| Gross carrying value | Accumulated amortization | Net carrying value | Weighted-average remaining useful life (years) | ||||||||||||||||||||
| (in thousands, except year data) | |||||||||||||||||||||||
| Developed technology | $ | 47,460 | $ | 31,964 | $ | 15,496 | 1.6 | ||||||||||||||||
| Other intangible assets | 600 | 600 | — | — | |||||||||||||||||||
| Total acquired intangible assets | $ | 48,060 | $ | 32,564 | $ | 15,496 |
| December 31, 2024 | |||||||||||||||||||||||
| Gross carrying value | Accumulated amortization | Net carrying value | Weighted-average remaining useful life (years) | ||||||||||||||||||||
| (in thousands, except year data) | |||||||||||||||||||||||
| Developed technology | $ | 47,460 | $ | 22,051 | $ | 25,409 | 2.6 | ||||||||||||||||
| Other intangible assets | 600 | 600 | — | — | |||||||||||||||||||
| Total acquired intangible assets | $ | 48,060 | $ | 22,651 | $ | 25,409 |
Amortization expense was immaterial for the years ended December 31, 2025, 2024, and 2023.
The estimated future amortization expense related to acquired intangible assets as of December 31, 2025 was as follows:
| (in thousands) | |||||
| 2026 | $ | 9,913 | |||
| 2027 | 5,583 | ||||
| Total | $ | 15,496 |
Reddit, Inc.
Notes to the Consolidated Financial Statements
10. Debt
Revolving Line of Credit
On July 1, 2025, we entered into an Amended and Restated Credit and Guarantee Agreement, which amended and restated our prior Credit and Guarantee Agreement dated October 8, 2021 (as amended on May 23, 2023), and provides for a five-year, $500.0 million, revolving loan and standby letter of credit facility (“Revolving Credit Facility”) of which $100.0 million can be issued as letters of credit and another $100.0 million of which can be borrowed in certain non-U.S. dollar currencies. As of December 31, 2025, we have issued three letters of credit, two of which are denominated in a foreign currency, for an aggregate of $5.3 million, which reduced the letter of credit borrowings available under the Revolving Credit Facility to $94.7 million. The aggregate available balance under the Revolving Credit Facility was $494.7 million as of December 31, 2025.
Under the terms of the Revolving Credit Facility, borrowings can be ABR Loans, Term Benchmark Loans, or RFR Loans. Outstanding ABR Loans bear interest at a rate equal to the greatest of (A) the Prime Rate, (B) the NYFRB Rate plus 0.5%, or (C) the Adjusted Term SOFR Rate plus 1.0% (each as defined in the Revolving Credit Facility), in each case plus 0.25%. Outstanding Term Benchmark Loans bear interest at the Adjusted Term SOFR Rate, the Adjusted EURIBOR Rate, the Adjusted Term CORRA Rate, or the Adjusted AUD Rate (each as defined in the Revolving Credit Facility), as applicable, in each case plus 1.25%. Outstanding RFR Loans bear interest at a rate equal to the Adjusted Daily Simple RFR (as such term is defined in the Revolving Credit Facility) plus 1.25%. We are required to pay a quarterly commitment fee that accrues at 0.15% per annum on the unused portion of the aggregate commitments under the Revolving Credit Facility.
The Revolving Credit Facility contains customary conditions on our borrowings, including events of default and covenants. Covenants include restrictions on our and certain of our subsidiaries’ ability to incur indebtedness, grant liens, make distributions to holders of our preferred and common stock, make investments, or engage in transactions with our affiliates, and require us to adhere to a maximum total leverage ratio. The obligations under the Revolving Credit Facility are secured by liens on substantially all of our assets, including intellectual property assets. However, the Revolving Credit Facility provides for the permanent release of guarantees and collateral upon our achievement of certain investment grade ratings. We were in compliance with all covenants as of December 31, 2025.
11. Commitments and Contingencies
Purchase Obligations
We enter into contracts with non-cancellable purchase obligations, primarily related to third-party cloud infrastructure agreements under which we are granted access to certain cloud services. We have met all minimum purchase commitments under these agreements during the periods presented.
As of December 31, 2025, future payments under non-cancellable purchase obligations were as follows:
| (in thousands) | |||||
| 2026 | $ | 206,953 | |||
| 2027 | 111,097 | ||||
| 2028 | 54,129 | ||||
| Total | $ | 372,179 |
Legal Matters
From time to time, we may become involved in various legal and regulatory proceedings, claims or purported class actions related to, among other things, alleged infringement of third party patents and other intellectual property rights, commercial, corporate and securities, labor and employment, wage and hour and other claims arising in the normal course of business. We record a loss contingency when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. We also disclose material contingencies when we believe a loss is not probable but reasonably possible.
In June 2025, we and certain of our officers and directors were named as defendants in a securities class action lawsuit in the U.S. District Court for the Northern District of California. The lawsuit is brought on behalf of a purported class of purchasers or acquirers of our securities, alleging that we and certain of our officers made false or misleading statements and omissions concerning the impact of Google Search and its AI Overviews feature on our business. The complaint seeks unspecified damages and attorneys’ fees. Subsequently, shareholder derivative complaints with similar allegations were filed in
Reddit, Inc.
Notes to the Consolidated Financial Statements
the U.S. District Court for the Northern District of California against the Company, its directors, and members of our senior management. No responses to these complaints have been filed. Based on the preliminary nature of the proceedings in these cases, the outcome of these matters remains uncertain.
Accounting for contingencies requires us to use judgment related to both the likelihood of a loss and the estimate of the amount or range of loss. We are not aware of any pending matters, individually or in the aggregate, that are expected to have a material adverse impact on our results of operations, financial position, or cash flows as of December 31, 2025 and 2024. Legal fees and other expenses associated with such matters are expensed as incurred.
Indemnification
In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, investors, directors, officers, employees, and other parties with respect to certain matters. Indemnification may include losses from our breach of such agreements, services we provide, or third-party intellectual property infringement claims. These indemnifications may survive termination of the underlying agreement and the maximum potential amount of future indemnification payments may not be subject to a cap. We have not incurred material costs to defend lawsuits or settle claims related to these indemnifications during the years ended December 31, 2025, 2024, and 2023. We believe the fair value of these liabilities is immaterial and accordingly have not recorded liabilities for these agreements as of December 31, 2025 and 2024.
12. Stockholders' Equity (Deficit)
Class A, Class B, and Class C Common Stock
We have three classes of authorized common stock — Class A, Class B, and Class C common stock. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion rights. Each share of Class A common stock is entitled to one vote per share. Each share of Class B common stock is entitled to 10 votes per share. Shares of Class B common stock may be converted to Class A common stock at any time at the option of the stockholder. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock (i) upon any transfer, except for certain permitted transfers set forth in the Restated Certificate, including transfers to family members, certain trusts for estate planning purposes, entities under common control with or controlled by such holder of our Class B common stock, and with respect to Advance Magazine Publishers Inc., or any Advance Entity (as defined in the Restated Certificate), or (ii) upon the first date on which the aggregate number of outstanding shares of Class B common stock ceases to represent at least 7.5% of the aggregate number of then-outstanding shares of our Class A and Class B common stock. Once converted into Class A common stock, the Class B common stock will not be reissued. In connection with our IPO, the Restated Certificate became effective, which authorized 100,000,000 shares of Class C common stock. Each holder of Class C common stock is entitled to no votes per share.
Preferred Stock
In connection with our IPO, the Restated Certificate became effective, which authorized 100,000,000 shares of undesignated preferred stock. Our Board of Directors has the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges, and liquidation preferences, of each series of preferred stock.
Common Stock Reserved for Issuance
In February 2024, our Board of Directors adopted the 2024 Incentive Award Plan (the “2024 Plan”), which became effective in connection with the IPO. Under the 2024 Plan, shares of our Class A common stock are reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, restricted stock awards, RSU awards, performance bonus awards, performance stock unit awards, dividend equivalents, or other stock or cash based awards. The 2024 Plan also includes shares of our Class A common stock that remained available for grant of future awards under our 2017 Equity Incentive and Grant Plan (as amended, the "2017 Plan") at the time the 2024 Plan became effective. The number of shares reserved for issuance under the 2024 Plan will increase by an annual increase on the first day of each fiscal year beginning in 2025 and ending in 2034, equal to the lesser of (A) 5% of the shares of common stock outstanding (on an as converted basis) on the last day of the immediately preceding year and (B) such smaller number of shares of stock as determined by our Board of Directors; provided, however, that no more than 185,661,778 shares of stock may be issued upon the exercise of incentive stock options.
Reddit, Inc.
Notes to the Consolidated Financial Statements
We have reserved the following shares of common stock, on an as-converted basis, for future issuance:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Outstanding stock options | 10,852,131 | 14,687,538 | |||||||||
| Outstanding RSUs | 4,370,034 | 11,175,380 | |||||||||
| Remaining shares reserved for future issuances under the 2024 Plan | 45,792,210 | 36,711,788 | |||||||||
| Shares reserved for community impact initiatives and charitable activities | 1,337,205 | 1,337,205 | |||||||||
| Total shares of common stock reserved | 62,351,580 | 63,911,911 |
The remaining shares reserved for future issuance under the 2024 Plan relate to Class A and Class B common stock.
13. Stock-Based Compensation
RSUs and RSAs
Service-based RSUs
We grant service-based RSUs to our employees, all of which relate to Class A common stock. RSUs granted under the 2017 Plan generally have both service-based and performance-based vesting conditions (“Double Trigger RSUs”). Double Trigger RSUs generally expire seven years from the date of grant. The service-based vesting condition for these awards is generally satisfied by rendering continuous service, generally for three to four years, during which time the grants will vest either quarterly or with a cliff vesting period of one year and continued vesting quarterly thereafter. The performance-based vesting condition was satisfied upon the effectiveness of our IPO. We record stock-based compensation expense in connection with these Double Trigger RSUs based on the fair market value of our common stock on the grant date using the accelerated attribution method over the requisite service period.
We also grant RSUs with a service-based vesting condition only, covering shares of our Class A common stock (“Single Trigger RSUs”). Single Trigger RSUs generally expire seven years from the date of grant. The service-based vesting condition for these awards is generally satisfied by rendering continuous service, generally for one to three years, during which time the grants will vest either with a cliff vesting period of one year and continued vesting quarterly thereafter or quarterly from the vesting commencement date. As a result, we record stock-based compensation expense related to these awards on a straight-line basis over the requisite service period.
Service-based RSAs
We grant, in certain circumstances, RSAs with a service-based vesting condition, covering shares of our Class A common stock. The service-based vesting condition for these awards is generally satisfied by rendering continuous service, generally for three years, during which time the grants will vest with a cliff vesting period of one year and continued vesting quarterly thereafter. As a result, we record stock-based compensation expense related to these awards on a straight-line basis over the requisite service period.
The following table summarizes the RSU and RSA activity for the year ended December 31, 2025:
| Total RSUs and RSAs | Weighted- average grant date fair value | ||||||||||
| Unvested as of December 31, 2024 | 11,344,247 | $ | 37.67 | ||||||||
| Granted | 1,593,019 | $ | 140.43 | ||||||||
| Vested | (7,405,968) | $ | 49.43 | ||||||||
| Canceled/Forfeited | (1,070,447) | $ | 47.44 | ||||||||
| Unvested as of December 31, 2025 | 4,460,851 | $ | 58.71 |
As of December 31, 2025, we had RSUs and RSAs outstanding for 4,460,851 common shares, of which 4,012,274 relate to Class A common stock and 448,577 relate to Class B common stock. The weighted-average grant date fair value of RSUs and RSAs granted during the years ended December 31, 2025, 2024, and 2023 was $140.43, $56.96, and $26.71, respectively. The total fair value of RSUs and RSAs vested during the years ended December 31, 2025, 2024, and 2023 was $315.4 million,
Reddit, Inc.
Notes to the Consolidated Financial Statements
$766.8 million, and $27.9 million, respectively. Total unrecognized stock-based compensation expense related to RSUs and RSAs was $152.5 million as of December 31, 2025 and is expected to be recognized over a weighted-average period of 0.91 years.
Stock Options
Stock option grants generally expire ten years from the date of the grant. Certain stock option grants allow for the exercise of unvested options to acquire shares. Upon termination of service, we have the right to repurchase, at the original exercise price, any unvested (but issued) common stock. The grant date fair value of stock options is estimated using a Black-Scholes option-pricing model. Calculating the fair value of stock options using the Black-Scholes model requires certain highly subjective inputs and assumptions including the fair value of the underlying common stock, the expected term of the stock option, and the expected volatility of the price of the underlying common stock. Forfeitures are accounted for as they occur. Stock options vest based on terms in the stock option agreement and generally vest over five years quarterly or four years with 25% of the award vesting one year from the vesting commencement date then ratably over the following three years. For awards that vest based only on continuous service, stock-based compensation expense is recognized on a straight-line basis over the requisite service period.
The following table summarizes the stock option activity during the year ended December 31, 2025:
| Outstanding stock options | Weighted- average exercise price | Weighted- average remaining contractual life (years) | Aggregate intrinsic value | ||||||||||||||||||||
| (in thousands, except share, per share, and year data) | |||||||||||||||||||||||
| Balance as of December 31, 2024 | 14,687,538 | $ | 30.07 | 6.87 | $ | 1,958,924 | |||||||||||||||||
| Exercised | (3,833,276) | 6.54 | |||||||||||||||||||||
| Canceled/Forfeited | (2,131) | 34.34 | |||||||||||||||||||||
| Balance as of December 31, 2025 | 10,852,131 | $ | 38.38 | 7.14 | $ | 2,078,120 | |||||||||||||||||
| Vested as of December 31, 2025 | 5,509,084 | $ | 31.81 | 6.33 | $ | 1,091,126 | |||||||||||||||||
| Vested and expected to vest as of December 31, 2025 | 10,852,131 | $ | 38.38 | 7.14 | $ | 2,078,120 |
As of December 31, 2025, we had outstanding stock options for 10,852,131 common shares, of which 9,320,333 relate to Class A common stock and 1,531,798 relate to Class B common stock. Total unrecognized stock-based compensation expense related to stock options was $83.1 million as of December 31, 2025 and is expected to be recognized over a weighted-average period of 2.98 years.
Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of our common stock. The intrinsic value of options exercised during the years ended December 31, 2025, 2024, and 2023 was $611.6 million, $887.3 million, and $72.5 million, respectively. The weighted-average grant date fair value per share of options granted during the year ended December 31, 2023 was $15.67. There were no options granted during the years ended December 31, 2025 and 2024. The total grant date fair value of options vested during the years ended December 31, 2025, 2024, and 2023 was $28.8 million, $34.8 million, and $14.0 million, respectively.
Determination of Fair Value
We estimate the fair value of stock options using the Black-Scholes option-pricing model, which is dependent upon several variables, such as the fair value of our common stock, expected term of the option, expected volatility of the stock price, risk-free interest rate, and expected dividend rate.
The assumptions used in the Black-Scholes option pricing model were determined as follows:
Fair Value of Common Stock—Prior to the completion of an IPO, the Board of Directors exercised reasonable judgment and considered numerous and subjective factors to determine the best estimate of the fair value of our common stock, including but not limited to the prices of recent issuances of our convertible preferred stock, third-party valuations of our common stock, the price paid by us to repurchase outstanding shares of common stock, the prices paid for our common stock in secondary market transactions, our performance and market position relative to our competitors or similar publicly traded companies, the
Reddit, Inc.
Notes to the Consolidated Financial Statements
likelihood and timing of achieving a liquidity event, the lack of marketability of our common stock, and U.S. and global capital market conditions.
Expected Term—The expected term of options represents the period that our stock-based awards are expected to be outstanding and is calculated using the simplified method. The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options.
Volatility—We determine the price volatility factor based on the historical and implied volatilities of our peer group as we do not have a sufficient trading history for our common stock. When considering which companies to include in our comparable industry peer companies, we focused on publicly-traded companies with businesses similar to ours.
Risk Free Interest Rates—These rates are based on the implied yield currently available on U.S. Treasury notes with terms approximately equal to the expected life of the option.
Expected Dividend Yield—We have not and do not expect to pay cash dividends on our common stock.
Stock-Based Compensation Expense
The following table summarizes the components of stock-based compensation expense recognized in the consolidated statements of operations for all periods presented:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of revenue | $ | 875 | $ | 620 | $ | 101 | |||||||||||
| Research and development | $ | 213,515 | 441,629 | 23,825 | |||||||||||||
| Sales and marketing | $ | 42,103 | 80,436 | 5,555 | |||||||||||||
| General and administrative | $ | 86,687 | 278,961 | 18,117 | |||||||||||||
| Stock-based compensation expense | $ | 343,180 | $ | 801,646 | $ | 47,598 |
14. Employee Benefit Plans
We have a defined contribution 401(k) plan (the “401(k) Plan”) for our United States-based employees. The 401(k) Plan is for all full-time employees who meet certain eligibility requirements. Eligible employees may contribute up to 100% of their annual compensation, but are limited to the maximum annual dollar amount allowable under the Internal Revenue Code of 1986, as amended (the “Code”). We match 75% of each participant’s contribution up to $3,000 and 25% of each participant’s contribution thereafter, subject to certain limitations and the IRS annual contribution limits. During the years ended December 31, 2025, 2024, and 2023, we recognized expense related to matching contributions of $12.3 million, $11.5 million, and $10.1 million, respectively.
15. Income Taxes
For the years ended December 31, 2025, 2024, and 2023, the geographical breakdown of our income (loss) before income taxes is as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Domestic income (loss) | $ | 514,826 | $ | (493,371) | $ | (92,627) | |||||||||||
| Foreign income (loss) | 13,864 | 8,164 | 5,604 | ||||||||||||||
| Income (loss) before income taxes | $ | 528,690 | $ | (485,207) | $ | (87,023) |
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA makes changes to U.S. federal income tax law, including repealing the requirement to capitalize domestic research and experimental expenditures
Reddit, Inc.
Notes to the Consolidated Financial Statements
under the 2017 Tax Cuts and Jobs Act, and allowing for immediate expensing of these costs. Our income tax provision for the year ended December 31, 2025 reflects these changes and resulted in additional taxable losses.
For the years ended December 31, 2025, 2024, and 2023, income tax expense (benefit) consisted of the following:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Current income tax expense (benefit): | |||||||||||||||||
| Federal | $ | — | $ | (141) | $ | 1,290 | |||||||||||
| State | 889 | 474 | 1,133 | ||||||||||||||
| Foreign | 2,707 | 851 | 1,468 | ||||||||||||||
| Total current income tax expense (benefit) | 3,596 | 1,184 | 3,891 | ||||||||||||||
| Deferred income tax expense (benefit): | |||||||||||||||||
| Federal | — | (237) | — | ||||||||||||||
| Foreign | (4,627) | (1,878) | (90) | ||||||||||||||
| Total deferred income tax expense (benefit) | (4,627) | (2,115) | (90) | ||||||||||||||
| Total income tax expense (benefit): | |||||||||||||||||
| Federal | — | (378) | 1,290 | ||||||||||||||
| State | 889 | 474 | 1,133 | ||||||||||||||
| Foreign | (1,920) | (1,027) | 1,378 | ||||||||||||||
| Total income tax expense (benefit) | $ | (1,031) | $ | (931) | $ | 3,801 |
For the year ended December 31, 2025, following the adoption of ASU 2023-09, our tax provision and effective tax rate differed from the statutory federal rate as follows:
| Year ended December 31, 2025 | |||||||||||
| Amount | Percent | ||||||||||
| (in thousands, except percentages) | |||||||||||
| Provision for income taxes at statutory federal income tax rate | $ | 111,025 | 21.0 | % | |||||||
| State income taxes, net of federal income tax effect(1) | 955 | 0.2 | |||||||||
| Foreign tax effects: | |||||||||||
| United Kingdom: | |||||||||||
| Stock-based compensation | (5,851) | (1.1) | |||||||||
| Other | (698) | (0.1) | |||||||||
| Other foreign jurisdictions | 70 | — | |||||||||
| Tax credits: | |||||||||||
| Research and development credits | (57,630) | (10.9) | |||||||||
| Change in valuation allowance | 172,418 | 32.6 | |||||||||
| Non-taxable or non-deductible items: | |||||||||||
| Stock-based compensation | (285,955) | (54.1) | |||||||||
| Non-deductible compensation | 69,402 | 13.1 | |||||||||
| Other non-taxable or non-deductible items | 1,299 | 0.3 | |||||||||
| Other reconciling items: | |||||||||||
| Return to provision true-ups | (6,317) | (1.2) | |||||||||
| Other | 251 | — | |||||||||
| Total tax provision and effective tax rate | $ | (1,031) | (0.2) | % |
(1)State taxes in California made up the majority (greater than 50%) of the tax effect in this category.
Reddit, Inc.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, our effective tax rate, as a percentage of pre-tax income (loss), differed from the statutory federal rate as follows:
| Year ended December 31, | |||||||||||||||||
| 2024 | 2023 | ||||||||||||||||
| Statutory federal income tax rate | 21.0 | % | 21.0 | % | |||||||||||||
| State income taxes, net of federal benefit | 5.3 | 1.2 | |||||||||||||||
| Non-deductible compensation | (14.0) | — | |||||||||||||||
| Stock-based compensation | 44.4 | 3.9 | |||||||||||||||
| Research and development credits | 14.6 | 13.5 | |||||||||||||||
| Change in valuation allowance | (71.0) | (41.1) | |||||||||||||||
| Other | (0.2) | (2.9) | |||||||||||||||
| Effective tax rate | 0.1 | % | (4.4) | % |
Deferred income taxes reflect the net tax effect of temporary differences between amounts recorded for financial reporting purposes and the amounts used for tax purposes. The major components of deferred tax assets and liabilities were as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Deferred tax assets: | |||||||||||
| Net operating loss carryforwards | $ | 404,212 | $ | 149,735 | |||||||
| Stock-based compensation | 16,920 | 28,586 | |||||||||
| Lease liability | 5,634 | 6,206 | |||||||||
| Capitalized research and development costs | 156,429 | 268,232 | |||||||||
| Research and development credits | 199,017 | 124,116 | |||||||||
| Other | 12,103 | 13,351 | |||||||||
| Gross deferred tax assets | 794,315 | 590,226 | |||||||||
| Valuation allowance | (779,030) | (572,894) | |||||||||
| Total deferred tax assets, net of valuation allowance | 15,285 | 17,332 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Right-of-use asset | (4,941) | (5,436) | |||||||||
| Acquired intangibles | (3,556) | (9,727) | |||||||||
| Total deferred tax liabilities | (8,497) | (15,163) | |||||||||
| Net deferred tax assets (liabilities) | $ | 6,788 | $ | 2,169 |
As of December 31, 2025, we had $1.7 billion and $806.1 million, respectively, of gross federal and state net operating loss carryforwards available to reduce future taxable income. The federal net operating loss carryforwards are able to be carried forward indefinitely but are limited to 80% of taxable income. The state carryforwards will begin to expire in 2026.
As of December 31, 2025, we had federal research and development credit carryforwards of $201.0 million that will begin to expire in 2039 and state research and development credit carryforwards of $78.3 million that do not expire.
Utilization of the net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Code and similar state tax regulations. Under Section 382 of the Code, substantial changes in our ownership and in the ownership of acquired companies may limit the amount of net operating loss and tax credit carryforwards that are available to offset taxable income. The annual limitation may result in the expiration of net operating losses and tax credits before utilization. Accordingly, our ability to utilize these carryforwards may be limited as a result of such ownership change.
We assessed the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use our existing federal and state deferred tax assets. Based on the weight of the available evidence, including our history of losses, we provided a full valuation allowance against our federal and state deferred tax assets as of December 31, 2025. The
Reddit, Inc.
Notes to the Consolidated Financial Statements
amount of the deferred tax asset considered realizable could be adjusted in future periods if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.
Given our recent history of generating net income in the United States, we believe that there is a reasonable possibility that sufficient positive evidence may become available within the next 18 months to allow us to release a significant portion of the federal valuation allowance. The reversal would result in a significant income tax benefit in the period when we release it. However, the exact timing and amount of the valuation allowance release are subject to change based on our actual operating results.
We intend to reinvest unremitted foreign earnings indefinitely and do not expect to incur any significant taxes related to such amounts.
Uncertain Tax Positions
The following table summarizes the activity related to our gross unrecognized tax benefits during the years ended December 31, 2025, 2024, and 2023:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Beginning balance of unrecognized tax benefits | $ | 43,861 | $ | 19,236 | $ | 16,428 | |||||||||||
| Increases/(decreases) related to prior year tax positions | 7,434 | 1,444 | (1,750) | ||||||||||||||
| Increases/(decreases) related to current year tax positions | 19,115 | 23,181 | 4,558 | ||||||||||||||
| Ending balance of unrecognized tax benefits | $ | 70,410 | $ | 43,861 | $ | 19,236 |
Substantially all of the unrecognized tax benefits were recorded as reductions in our gross deferred tax assets, offset by a corresponding reduction in our valuation allowance. The unrecognized tax benefits, if recognized, would not materially affect the effective tax rate due to the full valuation allowance recorded against our federal and state deferred tax assets.
Our policy is to recognize interest and penalties associated with unrecognized tax benefits as income tax expense. During the year ended December 31, 2025, we had no interest expense or penalties related to uncertain tax positions. As of December 31, 2025, we had no accrued balances of interest and penalties related to uncertain tax positions.
Due to our net operating loss carryforwards, we are subject to examination by taxing authorities in the United States for all tax years. In our foreign jurisdictions, we are subject to examination for tax years ending on or after December 31, 2019.
16. Related-Party Transactions
Advance Magazine Publishers Inc.
As of December 31, 2025, Advance Magazine Publishers Inc. (“Advance”) held approximately 22% of our outstanding shares of Class A and Class B common stock and is a related party to Reddit as Advance holds more than 10% of the voting power of our outstanding Class A and Class B common stock. Moreover, pursuant to the terms of the Restated Certificate and that certain Governance Agreement, dated as of March 19, 2024, by and among us, Steve Huffman, our Chief Executive Officer and a member of our Board of Directors, and Advance, Advance has the right to designate two directors for inclusion in the slate of nominees for election as directors at an annual or special meeting of stockholders, to designate one nonvoting observer to the Board of Directors, and to have one of its designees sit on each committee of the Board of Directors (other than the audit committee), subject to certain limitations set forth in the Restated Certificate. Additionally, the affirmative vote or written consent of Advance will be required for us to take certain corporate actions. These rights will continue until the first to occur of the following events: (i) a change of control of Advance or Reddit; (ii) Advance and its permitted transferees cease to, in the aggregate, beneficially own at least 5% of the aggregate of the then-outstanding shares of our Class A and Class B common stock; and (iii) (a) Advance and its permitted transferees cease to, in the aggregate, beneficially own at least 50% of the number of outstanding shares of our equity securities held by Advance upon the closing of our IPO, and (b) the then-outstanding shares of our Class B common stock, in the aggregate, represents less than 7.5% of the aggregate of the then-outstanding shares of our Class A and Class B common stock.
Reddit, Inc.
Notes to the Consolidated Financial Statements
We currently sublease office space in New York and Chicago from Advance. Total lease costs and other related expenses for our subleases were immaterial for the years ended December 31, 2025, 2024, and 2023.
17. Segment and Geographic Information
Segment Information
We have one reportable segment as our chief operating decision maker, our Chief Executive Officer, reviews consolidated profitability measures in managing the business. Specifically, our chief operating decision maker uses consolidated net income (loss) as the measure of segment profit or loss for evaluating performance and allocating resources through comparison of actual amounts against budgeted and prior period amounts in order to make strategic decisions.
The following table presents the calculation of segment net income (loss):
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Revenue | $ | 2,202,506 | $ | 1,300,205 | $ | 804,029 | |||||||||||
| Adjusted cost of revenue(1) | 193,341 | 122,975 | 110,758 | ||||||||||||||
| Adjusted gross profit | 2,009,165 | 1,177,230 | 693,271 | ||||||||||||||
| Adjusted operating expenses(2) | 1,164,092 | 879,223 | 762,546 | ||||||||||||||
| Stock-based compensation and related taxes | 387,141 | 842,932 | 49,086 | ||||||||||||||
| Depreciation and amortization | 15,948 | 15,643 | 13,702 | ||||||||||||||
| Interest (income) expense, net | (86,722) | (78,121) | (53,281) | ||||||||||||||
| Income tax expense (benefit) | (1,031) | (931) | 3,801 | ||||||||||||||
| Other segment expenses(3) | 16 | 2,760 | 8,241 | ||||||||||||||
| Segment net income (loss) | $ | 529,721 | $ | (484,276) | $ | (90,824) | |||||||||||
| Consolidated net income (loss) | $ | 529,721 | $ | (484,276) | $ | (90,824) |
(1)Adjusted cost of revenue is cost of revenue adjusted for stock-based compensation and related taxes and depreciation and amortization as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Cost of revenue | $ | 194,216 | $ | 123,595 | $ | 111,011 | |||||||||||
| Less: | |||||||||||||||||
| Stock-based compensation and related taxes | 875 | 620 | 101 | ||||||||||||||
| Depreciation and amortization | — | — | 152 | ||||||||||||||
| Adjusted cost of revenue | $ | 193,341 | $ | 122,975 | $ | 110,758 |
Reddit, Inc.
Notes to the Consolidated Financial Statements
(2)Adjusted operating expenses is operating expenses (comprised of research and development, sales and marketing, and general and administrative expenses) adjusted for stock-based compensation and related taxes, depreciation and amortization, and restructuring costs as follows:
| Year ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Operating expenses | $ | 1,566,306 | $ | 1,737,178 | $ | 833,179 | |||||||||||
| Less: | |||||||||||||||||
| Stock-based compensation and related taxes | 386,266 | 842,312 | 48,985 | ||||||||||||||
| Depreciation and amortization | 15,948 | 15,643 | 13,550 | ||||||||||||||
| Restructuring costs | — | — | 8,098 | ||||||||||||||
| Adjusted operating expenses | $ | 1,164,092 | $ | 879,223 | $ | 762,546 |
(3)Other segment expenses primarily includes restructuring costs, realized gains and losses on sales of marketable securities, and foreign currency transaction gains and losses.
Geographic Information
As of December 31, 2025 and 2024, substantially all of our long-lived assets were located within the United States.
18. Subsequent Events
On February 4, 2026, our Board of Directors authorized a share repurchase program to purchase up to $1.0 billion of our Class A common stock (the “Share Repurchase Program”). Under the Share Repurchase Program, we may repurchase shares of our Class A common stock from time to time on the open market (including via pre-set trading plans), in privately negotiated transactions, or through other transactions in accordance with applicable securities laws. The Share Repurchase Program does not obligate us to acquire any particular amount of Class A common stock, has no expiration date, and may be suspended or discontinued at any time at our discretion.
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