AI fuelled ad growth spurs Reddit’s revenue predictions.
Reddit has revised its forecast for the Q2 2026 as analysts predict AI-powered tools could turbo-charge advertising on the platform.
The social media platform’s quarterly earnings hit $715m to $725m, which exceeded analysts’ from the London Stock Exchange Group’s (LSEG) average estimate of $711.6m.
Reddit now expects adjusted earnings before interest, taxes, and depreciation to be between $285m-$295m, above the estimated $277.1m.
Reddit offers AI-focused tools that let advertisers target audiences based on the communities they engage with and their interests, as illustrated in their presence on the platform.
The social media site boasts 116 million daily active users, as well as 443 million weekly active users, with over 100,000 active sub-reddits (conversation threads)
“Our active advertiser count grew 75% year-on-year, which I think is the third consecutive quarter that we’ve had really strong active advertiser count,” Reddit’s chief operating officer Jen Wong told Reuters.
In Q1 2026, the company reached $663m in revenue, beating analysts predictions of $611m – a 69% increase compared to the previous quarter.
This marks the seventh consecutive quarter that Reddit’s revenue growth has exceeded 60%, with ad revenue per logged-in user rising 64% annually. This illustrates the platform’s commitment to driving revenue with data-driven advertising and rapid adoption of AI tools.
However, Reddit’s shares have fallen roughly 35% so far this year – although news of the renewed forecast gave the shares an 11% boost.
While Reddit’s competitors, like Meta are announcing mass layoffs, Wong confirmed it is “still hiring and adding to our talent base”. Although she admits that “every company is thinking” about how AI could reshape the workforce.
“On the user side, we’re making steady progress, but we still have work to do to increase frequency and accelerate growth toward the levels we see on leading platforms,” said the firm’s chief executive, Steve Huffman, in a letter to shareholders.
“As AI becomes more prevalent, people increasingly seek out real human perspectives, and in turn, AI models rely on these perspectives to train and power their products,” Huffman said.
Reddit is one of the platforms most affected by AI, as LLMs take advantage of the conversational, question and answer style content, claiming top spot as most cited website by AI.
However, just as chatbots are turning to the platform, so are users looking for authentic human content – which Reddit hopes will protect the site in the coming years.
