Reddit revenue rose 53% to $895 million in Q3 as operating margin widened to 29.3%

By Jon Mc Gowan, The Filing Desk

Reddit's revenue grew 53.0% to $895 million in the third quarter of 2026. Operating income rose to $262 million, a margin of 29.3%, up from 23.6% a year earlier. Free cash flow was $363 million, almost twice the figure for the third quarter of 2025.

Advertising price and volume both rose

Revenue was $310 million higher than in the third quarter of 2025. Reddit's 10-Q says most of the increase came from advertising, up $297.7 million. The company said the growth was driven mainly by higher pricing and, to a lesser extent, more impressions delivered: the price of ads rose by approximately 34% and impressions delivered by approximately 15%.

Growth was slower than in the first two quarters of the year. Revenue rose 69.1% in the first quarter and 61.0% in the second. Over the first nine months of 2026, revenue was $2,363 million, up 60.0% from the same period of 2025.

Operating margin widened

Gross margin was 91.5%, against 90.9% a year earlier. Operating costs grew more slowly than revenue. Research and development was 29.5% of revenue, down from 33.5%, even though the spending itself rose 34.7% to $264 million.

Net income rose 73.6% to $283 million, a net margin of 31.6%. Diluted earnings per share were $1.40, against $0.80. Income tax was $6 million.

Free cash flow nearly doubled

Cash from operations rose 96.8% to $364 million. Capital spending was only $1 million, so free cash flow, cash from operations minus capital spending, was $363 million, or 40.6% of revenue. A year earlier it was $183 million, or 31.3%.

Reddit spent $100 million on share buybacks in the quarter and $340 million in the first nine months of 2026, after none in 2025. It pays no dividend. Cash and marketable securities were $3.0 billion at September 30, with no debt.

Eleven quarters of figures