Reddit, Inc.

Reddit operates in the global digital advertising and online community platform industry. The filing describes Reddit as a global digital city where users join communities to learn, engage in authentic conversations, explore passions, and find belonging. The platform is built on over 100,000 active communities called subreddits, which are organized based on specific interests. The filing notes that Reddit competes for people's time and for global advertising spend, facing significant competition across many areas of its business. Competitors named include Google, Amazon, YouTube, Wikipedia, X, Meta (including Facebook, Instagram, Threads, and WhatsApp), Snap, TikTok, Pinterest, Roblox, Discord, Twitch, and large language models like ChatGPT, Gemini, and Anthropic. The filing states that Reddit is one of the internet's largest corpuses of information, with over two billion posts and over 22 billion comments through December 31, 2025.

Reddit's competitive positioning is built on its differentiated community approach centered on human creativity and belonging, with content curated by people through an anonymous upvoting and downvoting system. The filing emphasizes that Reddit's community-powered recommendations are a foundational part of why users visit daily, offering authentic human recommendations that people can trust. The filing states that Reddit's advertising platform enables marketers to find relevant audiences using its interest graph and to reach users in contextually relevant communities and conversations. The filing notes that Reddit's performance model is based on first-party data from user-directed activities, such as communities users visit or join, and that its lack of reliance on third-party data makes its offering more resilient to the loss of signal that other platforms rely upon. The filing also states that Reddit is often cited as one of the most sourced and cited domains in AI across all models.

Reddit generates the majority of its revenue through the sale of advertising on its mobile applications and website. For the years ended December 31, 2025 and 2024, approximately 94% and 91% of revenue was generated from third parties advertising on the platform, respectively. The filing describes that revenue is recognized 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 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, which is typically less than 30 days in duration. Other revenue consists of revenue from content licensing and products sold directly to users, including Reddit Premium and Reddit Gold, which was not material for the periods presented. The filing notes that Reddit is in the early stages of monetizing its business and expanding its platform internationally.

Advertising revenue was $2,062,480 thousand for the year ended December 31, 2025, compared to $1,185,456 thousand for the year ended December 31, 2024, and $788,782 thousand for the year ended December 31, 2023. Other revenue was $140,026 thousand for the year ended December 31, 2025, compared to $114,749 thousand for the year ended December 31, 2024, and $15,247 thousand for the year ended December 31, 2023. The filing describes that the growth in advertising revenue was driven primarily by an increase in impressions delivered and to a lesser extent, an increase in pricing. Other revenues increased as a result of content licensing agreements executed in 2024 and 2025. The filing notes that revenue from products sold directly to users, including Reddit Premium and Reddit Gold, was not material for the periods presented.

In the three months ended December 31, 2025, an average of 121.4 million daily active uniques around the world came together on Reddit. The filing states that Reddit had an average of 121.4 million DAUq and 471.6 million WAUq in the three months ended December 31, 2025. During the three months ended December 31, 2025, over 80 million people searched on Reddit weekly. As of December 31, 2025, machine translation is live in 35 languages and approximately one billion posts have been translated in various languages. The filing notes that in 2025, Reddit began integrating Reddit Answers, its AI-powered conversational search tool, into Reddit's core search experience and rolling out to non-English languages. The filing also states that in January 2026, Reddit introduced a beta version of Max campaigns, an automated campaign type enabled by Reddit Community Intelligence and AI. On February 4, 2026, the Board of Directors authorized a share repurchase program to purchase up to $1 billion of Class A common stock. In July 2025, Reddit renewed and amended its revolving credit facility for $500.0 million accessible through July 1, 2030. As of December 31, 2025, Reddit had 2,555 employees, including 1,981 in the United States.

Revenue was $2,202,506 thousand for the year ended December 31, 2025, an increase of 69% year over year from $1,300,205 thousand in the year ended December 31, 2024. Gross margin was 91.2% for the year ended December 31, 2025, as compared to 90.5% in the year ended December 31, 2024. Net income was $529,721 thousand for the year ended December 31, 2025, compared to a net loss of $(484,276) thousand in the year ended December 31, 2024. Adjusted EBITDA was $845,073 thousand for the year ended December 31, 2025, as compared to $298,007 thousand in the year ended December 31, 2024. Net cash provided by operating activities was $690,875 thousand for the year ended December 31, 2025, as compared to $222,068 thousand in the year ended December 31, 2024. Free Cash Flow was $684,169 thousand for the year ended December 31, 2025, as compared to $215,820 thousand in the year ended December 31, 2024. Cash, cash equivalents, and marketable securities were $2.5 billion as of December 31, 2025.

Management states that they expect costs and expenses to increase in future periods as they intend to continue to make significant investments to broaden and retain their user base, develop and implement new products, market new and existing products and promote their brand, expand their technical infrastructure, and hire additional employees. The filing notes that some of these investments may generate only limited revenue and reduce operating margin.

Reddit plans to grow users and engagement through several initiatives. The filing describes strategies to grow awareness and engagement of Reddit through machine translation, search engine optimization, and partnerships. The filing states that Reddit had an average of 121.4 million DAUq and 471.6 million WAUq in the three months ended December 31, 2025, and believes there is a significant opportunity to convert many weekly or monthly users to daily users. The filing notes that Reddit is using AI and LLMs to make onboarding more intuitive, lower barriers to logging in and contributing, and classifying content to help people find their home on Reddit. The filing also states that Reddit utilizes AI to recommend relevant posts and communities, utilizing factors such as search queries, post topics, and engagement with similar users. The filing describes Reddit as one of the few platforms positioned to become a true search destination, noting that in 2025, Reddit began integrating Reddit Answers into its core search experience and rolling out to non-English languages. During the three months ended December 31, 2025, over 80 million people searched on Reddit weekly. The filing also discusses plans to grow the international user base, noting that during the three months ended December 31, 2025, approximately 57% of Redditors visited the platform from outside of the United States, and over 90% of all Reddit posts created were made in English. As of December 31, 2025, machine translation is live in 35 languages and approximately one billion posts have been translated. The filing states that Reddit has captured increased international momentum, with an average of 68.9 million international DAUq for the three months ended December 31, 2025, representing 28% growth year over year.

Reddit plans to expand its advertising platform capabilities through eight levers: more context and interest signals, delivering ROI with marketplace optimizations, advertiser diversity and depth, demonstrating ROI, AI-powered audience reach and bidding, expanded formats and offerings, automation/scale service model, and acquiring more advertisers. The filing describes that Reddit is in the early stages of using machine learning and prediction models to better match supply and demand. The filing notes that Reddit plans to increase the types, sizes, and geographies of advertisers it reaches and expand annual partnerships. The filing states that Reddit is focused on geographic markets where it has teams, channel partners, or vendors to help manage small- and mid-size businesses globally. The filing also discusses content licensing as a growth vector, noting that Reddit is in the early stages of these efforts and that the market for content is new and evolving rapidly. The filing states that Reddit continues to strategically explore content licensing agreements with collaborative partners in the ecosystem, ranging from marketing intelligence and enterprise-scale technology companies to specialized providers in the financial services industry. The filing notes that substantially all of the contract value associated with licensing revenue is derived from two partners.

The filing states that gross margin was 91.2% for the year ended December 31, 2025, as compared to 90.5% in the year ended December 31, 2024. The filing notes that cost of revenue for the year ended December 31, 2025 increased by $70,621 thousand, or 57%, compared to the prior year, primarily attributable to increased hosting usage to support product enhancements and user growth on the platform, as well as an increase in other services related to advertising, partially offset by lower hosting prices. The filing states that management expects costs and expenses to increase in future periods as they intend to continue to make significant investments to broaden and retain their user base, develop and implement new products, market new and existing products and promote their brand, expand their technical infrastructure, and hire additional employees. The filing notes that some of these investments may generate only limited revenue and reduce operating margin.

The filing states that Reddit's cloud service infrastructure is run on cloud services providers, which are currently Amazon Web Services and Google Cloud Platform. The filing notes that hosting costs may increase as the user base grows. The filing states that Reddit expects to continue to make investments to maintain and improve the capacity, capability, and reliability of its infrastructure. The filing notes that as of December 31, 2025, Reddit had 2,555 employees, including 1,981 in the United States, and that employee headcount increased from 2,233 as of December 31, 2024. The filing states that Reddit expects to continue to grow headcount in future periods, but has in the past implemented, and may in the future implement, organizational changes to pursue greater efficiency and realign business and strategic priorities.

The filing states that stock-based compensation expense was $343,180 thousand for the year ended December 31, 2025, compared to $801,646 thousand for the year ended December 31, 2024. The filing notes that purchases of property and equipment were $6,706 thousand for the year ended December 31, 2025, compared to $6,248 thousand for the year ended December 31, 2024. On February 4, 2026, the Board of Directors authorized a share repurchase program to purchase up to $1 billion of Class A common stock. The filing states that Reddit has never declared or paid any cash dividends on its capital stock and does not expect to pay any cash dividends in the foreseeable future. The filing notes that the Revolving Credit Facility provides for a five-year, $500.0 million revolving loan and standby letter of 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, the aggregate available balance under the Revolving Credit Facility was $494.7 million.

The filing identifies several headwinds and constraints. The filing notes that the global economy and other macroeconomic conditions, including concerns related to inflation and rising interest rates, tariffs, and geopolitical risks, have resulted in uncertainty in the advertising market and have impacted brands' and agencies' ability and willingness to invest in advertising. The filing states that Reddit expects that these macroeconomic conditions may continue to impact revenue growth in the near term. The filing also notes that Reddit continues to experience competition both for advertising budgets and for user engagement, which could adversely impact advertising revenue. The filing states that Reddit has a history of net losses and may not be able to maintain profitability in the future, noting that Reddit incurred a net loss of $(484,276) thousand for the year ended December 31, 2024, and as of December 31, 2025, had an accumulated deficit of $(671,117) thousand. The filing notes that Reddit's quarterly results of operations have fluctuated in the past and will fluctuate in the future, based on the seasonality of the business as well as external factors impacting the global economy, with an increase in overall advertiser spending in the fourth quarter typically followed by a weaker first quarter.

The filing identifies several regulatory and legal headwinds. The filing states that Reddit is subject to increasingly complex and evolving laws, rules, regulations, industry standards, and other legal obligations regarding content, consumer protection, competition, privacy, and other matters. The filing notes that the European Union Digital Services Act imposes significant content moderation, notice, transparency, advertising, and child safety obligations. The filing states that the Dutch data protection authority has inquired about Reddit's content licensing efforts. The filing also notes that the UK Information Commissioner's Office is conducting an investigation regarding Reddit's use of age assurance measures and compliance with the UK GDPR. The filing states that Reddit is subject to a securities class action lawsuit filed in June 2025 alleging false or misleading statements concerning the impact of Google Search and its AI Overviews feature on Reddit's business. The filing notes that Reddit's ability to use net operating loss carryforwards may be limited, with U.S. federal NOL carryforwards of approximately $1.7 billion and state NOL carryforwards of approximately $806.1 million as of December 31, 2025, and state NOL carryforwards will begin to expire in 2026 if not utilized.

Reddit faces intense competition for user engagement and advertising spend from companies including Google, Meta, Snap, TikTok, Pinterest, and X, as well as from large language models like ChatGPT, Gemini, and Anthropic, which could draw users away from the platform. The filing notes that approximately 94% of revenue in 2025 was generated from advertising, and the top ten largest advertisers accounted for approximately 21% of revenue in 2025, creating concentration risk. Reddit has a history of net losses, with an accumulated deficit of $(671,117) thousand as of December 31, 2025, and may not maintain profitability. The filing states that Reddit's ability to use net operating loss carryforwards may be limited, with U.S. federal NOL carryforwards of approximately $1.7 billion and state NOL carryforwards of approximately $806.1 million as of December 31, 2025, and state NOL carryforwards will begin to expire in 2026 if not utilized. The filing also notes that Reddit is subject to a securities class action lawsuit filed in June 2025 alleging false or misleading statements concerning the impact of Google Search and its AI Overviews feature on Reddit's business. Additionally, the filing states that the UK Information Commissioner's Office is conducting an investigation regarding Reddit's use of age assurance measures and compliance with the UK GDPR, and the Dutch data protection authority has inquired about Reddit's content licensing efforts.

Management's message emphasizes Reddit's mission to empower communities and make their knowledge accessible to everyone. The filing highlights that Reddit turned 20 in 2025, describing it as two decades of building a user-powered platform where users bring their honest selves and connect over topics they care about. Management states that Reddit is what the internet needs most: a place where people can connect on almost any topic and find genuinely useful information. The filing notes that management believes the world needs community more than ever, and that this represents Reddit's greatest opportunity. The strategic priorities emphasized for the period ahead include growing users and engagement through improving discovery and user experience, customized content recommendations using AI, positioning Reddit as a search destination, and growing the international user base. Management also emphasizes expanding monetization through advertising and content licensing, noting that Reddit is still in the early phases of its opportunity and plans to pursue eight levers to expand monetization and average revenue per unique. The filing states that management expects costs and expenses to increase in future periods as they intend to continue to make significant investments to broaden and retain their user base, develop and implement new products, market new and existing products and promote their brand, expand their technical infrastructure, and hire additional employees.