By Angela Palumbo

Reddit stock surged Thursday after the social media company reported better-than-expected fourth-quarter results.

Reddit reported adjusted earnings of $1.24 a share on revenue of $726 million. Analysts surveyed by FactSet expected adjusted earnings of 94 cents a share on revenue of $666 million.

"It's a strong finish to a stand out year," CFO Drew Vollero told Barron's.

Reddit also reported fourth-quarter global daily active uniques -- the average daily number of people who visited a page on Reddit's website -- of 121.4 million, a 19% increase from the prior year. That beat Wall Street estimates of 120 million.

Vollero said most of the user growth came from international markets, as the company rolls out more language translations for its most popular "subreddits," as its forums are known.

Reddit expects first-quarter revenue to be between $595 million and $605 million, which is above Wall Street estimates of $577 million and a jump from the $392.4 million in the prior year period.

Shares were 2.7% in after-hours trading following the results.

This is breaking news. Please come back for more updates and analysis and read below for a preview of the earnings.

Reddit shareholders are hoping financial results can help boost the stock as concern about how artificial intelligence will affect the social media company drags down the price.

Reddit, known for discussion forums offering advice on everything from the value of cat insurance to the best tires to use off-road in the Australian Outback, is scheduled to report fourth-quarter financial results on Thursday afternoon. Analysts surveyed by FactSet expect adjusted earnings of 94 cents a share from revenue of $666 million.

That would be an increase from the earnings of 36 cents a share on revenue of $427.7 million Reddit reported in the same period one year ago.

Like other online platforms, Reddit makes almost all of its revenue from advertising. A positive sign for the stock is that fellow social media giant Meta Platforms reported solid fourth-quarter revenue on Jan. 29. Those numbers, pointing to positive trends in digital advertising, could be a positive sign for Reddit.

"Our reads on 4Q point to a healthy environment for digital ad spending, especially for DTC [direct-to-consumer] merchants through performance channels. This was also reflected in Meta results," Loop Capital analyst Rob Sanderson wrote on Monday. He rates Reddit as a Buy with a $260 price target.

The average daily number of people who visited a page on Reddit's website during the fourth quarter is expected to be 120 million, up 18% from the previous year. That rate of growth would mark a slight slowdown from the 19% gain in the third quarter.

The stock went public on March 21, 2024 with an initial public offering price of $34. Shares have since surged about 356% since then.

But the stock has struggled recently. Shares are down 29% over the past 12 months. Wall Street is particularly focused on how tech companies that are investing in AI can prove that those investments are paying off. Reddit, for example, has its own AI chatbot called Reddit Answers.

The stock is also expensive. It trades at 37.6 times the earnings expected over the next 12 months.

Reddit shares took a large hit in the days leading up to earnings, along with several other information-service providers. Wall Street is worried that software and other information-service providers will be replaced by AI. But the fact that Reddit relies on human interaction may protect it.

"We see multiple growth drivers for the business that appear to have legs," Sanderson wrote. "Reddit also appears uniquely positioned for the AI future as the largest corpus of genuine human perspective with community metrics that point to durable organic growth in user generated content,"

Write to Angela Palumbo at angela.palumbo@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

February 05, 2026 16:37 ET (21:37 GMT)

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