Reddit’s $804.9M Q2 2026 Revenue Was 94.6% Advertising

Why It Matters

Reddit’s revenue rose $305.3 million from the year-earlier quarter, and $296.8 million of that increase was advertising revenue. The filing attributes the advertising move to a roughly 40% rise in the price of ads and a roughly 17% rise in impressions delivered. The rest came from Other revenue, the only other line in the revenue-by-source table.

The profit came from operations, and the filing gives the mechanism behind the tax line. Income before income taxes was $256.8 million and the income tax provision was $4.0 million, equal to 1.6% of income before income taxes for the quarter. A full valuation allowance still stands against the United States federal and state deferred tax assets. Reddit says it believes there is a reasonable possibility that sufficient positive evidence may become available within the next 12 months to allow it to release a significant portion of that allowance. The filing adds that the exact timing and amount are subject to change.

The revenue note discloses the contracted, not-yet-recognized amount on Reddit’s longer contracts. Remaining performance obligations in contracts with an original expected duration exceeding one year were $92.1 million at June 30, 2026, and the filing says they consist primarily of long-term content licensing contracts. About a third of that, $30.1 million, is expected in 2027.

Advertising supplied $296.8 million of the $305.3 million June-quarter revenue increase

Advertising revenue was $761.6 million for the three months ended June 30, 2026 against $464.8 million a year earlier, an increase of 64%. Other revenue went from $34.8 million to $43.3 million, an increase of 24%. Advertising was 94.6% of the quarter’s revenue against 93.0% a year earlier, so the mix moved further toward the ad business rather than away from it.

Price did more of the work than volume. The filing puts the increase in the price of ads at approximately 40% for the quarter and the increase in impressions delivered at approximately 17%. Daily Active Uniques were 130.3 million, up 18%, which the filing attributes to 6% growth in the United States and 28% growth in the rest of world. Average revenue per unique was $6.18, up 36%, a measure the filing computes on a different geographic basis from the revenue table. Revenue from customers with United States billing addresses rose 56% to $638.1 million. The Market Context has previously covered Alphabet.

Remaining performance obligations on contracts over one year were $92.1 million at June 30, 2026

Three forward-dated figures sit in the revenue note. The aggregate amount of remaining performance obligations in contracts with an original expected duration exceeding one year was $92.1 million as of June 30, 2026. That amount, the filing says, consists primarily of long-term content licensing contracts, and it excludes deferred revenue on short-term advertising contracts and Reddit Premium subscriptions. Reddit expects to recognize $62.0 million of it in the remainder of 2026 and $30.1 million in 2027.

The SEC’s XBRL data carries the same tag from Reddit’s earlier filings at every period end from March 2024 forward. It read $188.1 million at March 2024 and reached its highest recorded level, $320.3 million, at June 2024. Every period end since has been lower: $294.8 million, $252.9 million, $224.5 million, $194.9 million, $173.1 million, $143.7 million, $120.6 million and now $92.1 million. That is eight consecutive declines and a 71% fall from the June 2024 reading, and it is the lowest of the ten period-end readings the tag covers.

The document’s word for this revenue is content licensing, and the phrase “data licensing” appears nowhere in the 10-Q’s primary document. The filing describes the arrangement as giving customers “the right to access content from our platform over the contractual period,” recognized as partners consume the content.

June-quarter income before income taxes of $256.8 million carried a $4.0 million tax provision

Income from operations was $231.7 million against $67.7 million a year earlier, and Other income (expense), net, added $25.1 million to reach $256.8 million before tax. Research and development was 29% of revenue against 39% a year earlier, the largest move in any expense line measured as a percentage of revenue. Stock-based compensation expense was $101.0 million, or 12.5% of revenue.

What Reddit did with the money is on the cash flow statement. Operating activities produced $261.9 million in the quarter. Financing activities used $244.1 million, of which $234.6 million was repurchases of Class A common stock, against no repurchases in the year-earlier quarter. Across the six months Reddit bought 1,523,502 shares for $239.6 million, a computed average of $157.26 a share, under the $1.0 billion authorization its board approved on February 4, 2026. Cash and cash equivalents of $1.49 billion and marketable securities of $1.30 billion left $2.79 billion on the balance sheet, and the accumulated deficit narrowed to $214.3 million. Earlier coverage of Microsoft and Netflix is in The Market Context archive.

What to watch

1. Reddit’s Form 10-Q for the quarter ending September 30, 2026, and the sentence in its revenue note giving the aggregate amount of remaining performance obligations. Eight consecutive readings have come down since June 2024. The September figure will show whether the ninth does.

2. The income taxes note in that same Form 10-Q. A release of the United States valuation allowance would show up there as a significant income tax benefit. This filing puts the next 12 months as the window in which sufficient positive evidence may become available.

3. The stockholders’ equity note in the same filing, where the $760.4 million left on the Share Repurchase Program at June 30, 2026 is updated. This quarter used $234.6 million of the authorization after $5.0 million in the prior quarter.