Reddit makes money mainly by selling ads in the feeds, conversation threads and search results of its communities (subreddits). In fiscal 2025 advertising brought in $2.06 billion of $2.20 billion revenue; the rest, called other revenue, came mostly from content licensing, which gives partners such as Google and OpenAI structured access to Reddit’s posts through its Data API. In the third quarter of 2026 revenue rose 53% to $895 million, of which $847 million was advertising.
Advertisers bid in Reddit's auctions for objectives across the funnel (impressions, traffic, conversions, app installs) and can target by interest or by the community where a topic is discussed. Advertising was $2,062.5 million of $2,202.5 million revenue in fiscal 2025, about 94%.
02
Content licensing
Partners pay a fixed or usage-based fee for the right to access Reddit content over a contract period, recognised ratably. It sits in other revenue, which was $140.0 million in fiscal 2025.
03
Products sold to users
Reddit Premium and Reddit Gold are also in other revenue; Reddit says revenue from them was not material in the years it reports.
04
Pricing per user
Reddit earns far more per daily user in the U.S. than abroad: in Q3 2026 average revenue per unique was $13.82 in the U.S., $2.43 in the rest of the world and $6.87 globally.
Fiscal 2025 revenue grew 69% to $2.20 billion and Reddit earned net income of $529.7 million, after a $484.3 million loss in 2024 (Reddit 10-K, 2026). In Q3 2026 revenue was $895.0 million against $584.9 million a year earlier, net income was $283 million and adjusted EBITDA was $402 million, 45% of revenue.
Growth now comes from ad prices
In Q3 2026 the price of ads rose about 34% and ad impressions about 15% from a year earlier, according to the quarterly report. For Q4 2026 Reddit guided to revenue of $1,000 million to $1,030 million.
AI search pressure on traffic
Global daily active uniques were flat at 130.3 million from Q2 to Q3 2026, and U.S. daily uniques fell 5% over the quarter. Reddit’s Q3 2026 10-Q says AI-generated summaries in third-party search have increased volatility in referral traffic, and that declines in search referrals hurt DAUq growth in the quarter.
Licensing the archive to AI
Google gained access to Reddit’s Data API in February 2024 to display and train on its content (Google, 2024), and OpenAI agreed in May 2024 to bring Reddit content into ChatGPT and to become a Reddit advertiser (Reddit, 2024). Reddit began testing its own AI search tool, Reddit Answers, in December 2024 and in 2025 started merging it into core Reddit search.
Reddit revenue and users, fiscal 2025 and Q3 2026
Total revenue
Fiscal 2025$2,202.5M
Q3 2026 (change vs Q3 2025)$895.0M (+53%)
Advertising revenue
Fiscal 2025$2,062.5M
Q3 2026 (change vs Q3 2025)$847.0M (+54%)
Other revenue (licensing, Premium)
Fiscal 2025$140.0M
Q3 2026 (change vs Q3 2025)$48.0M (+35%)
U.S. revenue
Fiscal 2025$1,785.6M
Q3 2026 (change vs Q3 2025)$718.9M (+50%)
Daily active uniques
Fiscal 2025121.4M (Q4 2025)
Q3 2026 (change vs Q3 2025)130.3M (+12%): 53.5M logged in, 76.8M logged out
What it means for you
Investors: watch U.S. daily uniques and logged-out users, the group most exposed to search referrals; U.S. DAUq fell 2% year on year in Q3 2026 while revenue rose 53%.
Track how much growth comes from ad prices rather than reach: in Q3 2026 prices rose about 34% and impressions about 15%.
Marketers: buy context, not only audiences; Reddit lets you place ads inside the conversations where people compare products.
Publishers and data owners: Reddit's licensing deals show that a fresh, structured archive of human conversation can be sold to AI companies alongside ads.
Read the risk factors each quarter; Reddit now ties its user growth to how Google and AI assistants display its content.
The Business Engineer lens
Reddit sells the same asset twice: attention to advertisers and its archive of human conversation to AI companies, whose answers can in turn keep users from clicking through. The Business Engineer’s view is that its value depends on staying a destination people visit directly, not only a source that AI systems read.
Mostly from advertising: $2.06 billion of $2.20 billion revenue in fiscal 2025. Other revenue, mainly content licensing plus Reddit Premium and Gold, was $140.0 million.
How much revenue did Reddit make in Q3 2026?
$895.0 million in the quarter to 30 September 2026, up 53%, including $847.0 million of advertising and $48.0 million of other revenue.
Does Reddit sell its data to AI companies?
It licenses access to its content: Google gained Data API access in February 2024 and OpenAI in May 2024. Reddit books content licensing in other revenue.
Is Reddit profitable?
Yes: net income was $529.7 million in fiscal 2025 and $283 million in Q3 2026, after losses in 2022, 2023 and 2024.
The complete explainer, cleaned up and reformatted for mobile.
Reddit is a social news and discussion website that also rates web content. The platform was created in 2005 after founders Alexis Ohanian and Steve Huffman met venture capitalist Paul Graham and pitched the company as the “front page of the internet.” Reddit makes money primarily via advertising: in the second quarter of 2026, Ad revenue was $762 million out of total revenue of $805 million, with Other revenue at $43 million. It also offers premium membership plans.
Updated 6 October 2026: we refreshed 10 figures on this page, now taken from SEC EDGAR filings and dtnext.in. Anything we could not check against a current source keeps its original year, so you can see how old it is.
Latest figures · checked 6 October 2026
Reddit’s total revenue for full year 2025 was $2.2 billion, with Ad revenue of $2.1 billion and Other revenue of $140 million. SEC EDGAR filings
In the second quarter of 2026, Reddit’s total revenue was $805 million, including $762 million of Ad revenue and $43 million of Other revenue. SEC EDGAR filings
Reddit’s Daily Active Uniques (DAUq) reached 130.3 million in the second quarter of 2026. SEC EDGAR filings
Reddit’s Weekly Active Uniques (WAUq) reached 514.6 million in the second quarter of 2026. SEC EDGAR filings
Reddit’s global average revenue per unique (ARPU) was $6.18 in the three months ended June 30, 2026, with U.S. ARPU at $11.85. SEC EDGAR filings
Drawing by The Business Engineer.
Reddit Origin Story
Reddit is a social news and discussion website that also rates web content.
Reddit, three months to 30 June 2026. Source: Reddit Q2 2026 and Q4 2025 earnings releases (SEC EDGAR); costs calculated. Analysis by The Business Engineer.
Key numbersChecked 6 October 2026
$2.2 billionReddit's total revenue for full year 2025 was $2.2 billion, with Ad revenue of $2.1 billion and Other…SEC EDGAR filings
$530 millionReddit reported net income of $530 million for full year 2025.SEC EDGAR filings
$805 millionIn the second quarter of 2026, Reddit's total revenue was $805 million, including $762 million of Ad…SEC EDGAR filings
$253 millionReddit's net income was $253 million in the second quarter of 2026.SEC EDGAR filings
In one lineReddit is a social news and discussion website that also rates web content.
FourWeekMBABusiness EngineerAt a glance
Reddit's total revenue for full year 2025 was $2.2 billion, with Ad revenue of $2.1 billion and Other revenue of $140 million.
Reddit's Daily Active Uniques (DAUq) reached 130.3 million in the second quarter of 2026.
Layout refreshed 6 October 2026. The article text below is unchanged.
Why it mattersFrom the article
There is potential that content agreements also result in sponsorships and other forms of revenue as Reddit works with other organizations to produce content.
Ability to adapt and grow in the ever-evolving online landscape.
The platform was created in 2005 after founders Alexis Ohanian and Steve Huffman attended a lecture by programmer and entrepreneur Paul Graham.
After his lecture, Graham spoke with the pair and invited them to apply for his start-up incubator Y Combinator.
Ohanian and Huffman initially pitched an SMS-based food ordering service, but it was deemed unviable.
Their second attempt, imagined by Graham as the “front page of the internet”, did receive funding from Y Combinator and was launched as Reddit in June of the same year.
In October 2006, Conde Nast Publications acquired Reddit – with Graham and Ohanian leaving the company three years later once their contractual obligations had ended.
In 2014, Reddit secured several high-profile investments and was valued at $500 million.
The following year, Huffman returned to the company to serve as CEO. Several subsequent rounds of funding culminated in a $300 million investment by Tencent in 2019, valuing Reddit at $3 billion.
Reddit ongoing popularity
One of the things that strikes the most when looking at Reddit is its ability (nonetheless being a social media site) to be popular for over a decade.
Indeed, Reddit managed to be interesting to newer generations that can engage in discussions around anything.
The Reddit Brand’s Search Volume trend over the years. Opposite to other social media and sites, Reddit managed to keep growing its popularity over the years, thus as 2021, still representing among the most searched websites across the globe (Data Source: KW Everywhere).
FourWeekMBABusiness EngineerTimeline, as stated in the article
2006
In October 2006, Conde Nast Publications acquired Reddit – with Graham and Ohanian leaving the company three years later once their contractual obligations had ended.
2014
In 2014, Reddit secured several high-profile investments and was valued at $500 million.
2019
Several subsequent rounds of funding culminated in a $300 million investment by Tencent in 2019, valuing Reddit at $3 billion.
Reddit revenue generation
Reddit makes money primarily through selling advertising space; content licensing and products sold to users, such as Reddit Premium, make up its smaller other revenue.
Advertising space
Advertising space is sold in two ways
The first is the Reddit Ads managed service for large-scale advertisers . Advertisers are given access to a dedicated Reddit sales team and a full suite of tools and best practices.
The second form of advertising involves an auction-based system where advertisers bid for objectives such as impressions, traffic, conversions or app installs.
Advertising on the Reddit platform arguably requires more finesse when compared to other platforms.
Reddit users are privacy-conscious and are highly suspicious of paid advertisements.
Nevertheless, companies such as Nissan, McDonald’s, Subaru, and Costco have been relatively successful on the platform.
In recent years, advertising has taken the form of sponsored AMA (Ask Me Anything) sessions and other interactive events that promote a more organic form of paid promotion.
Native mobile advertisements followed soon after.
Membership plan
Reddit users can also choose to sign up for the ad-free Reddit Premium membership plan.
In addition to an ad-free experience, premium members used to receive a monthly supply of coins to award to other members, but a Reddit product team post reported by DT Next said awards and existing coins would only remain available until September 12, 2023.They also get exclusive access to selected subreddits and a personalized avatar called a snoovatar.
In 2019, Reddit signed an advertising and content generation deal with the NFL.
Players and other key personnel from the National Football League participated in AMAs while the NFL itself produced and supplied video content.
While Reddit did not earn a direct free from the content agreement, it is safe to assume the extra traffic brought an increase in ad revenue.
There is potential that content agreements also result in sponsorships and other forms of revenue as Reddit works with other organizations to produce content.
Reddit Business Model In Numbers
Reddit reported $804.03 million in revenue in 2023, and $-90.82 million in net losses, compared to $666.7 million in revenue and $-158.55 million in net losses in 2022. By Q4 2023, Reddit had 73.1 million daily active users, 36.4 million in the US, and 36.7 million in the rest of the world. In Q4 2023, Reddit reported $3.42 ARPU globally, $5.51 in the US, and $1.34 in the Rest of the World.
Key takeaways
Reddit is a social news and discussion website founded in 2005 by Alexis Ohanian and Steve Huffman. The idea for the platform was pitched to Paul Graham, founder of the start-up accelerator program Y Combinator.
Reddit makes money by selling advertising space in two ways. The Reddit Ads managed service give large businesses with deep pockets access to a sales team and propriety tools. There is also an auction-based CPM system.
Reddit also offers a membership plan to its users, giving them an ad-free interface plus access to coins and custom avatars.
Key Highlights
Introduction:
Reddit: Social news and discussion website, also rates web content.
Founded in 2005 by Alexis Ohanian and Steve Huffman, pitched as the “front page of the internet.”
Origin Story:
Created after meeting with programmer Paul Graham and Y Combinator funding.
Initially pitched SMS-based food ordering, transformed into Reddit in 2005.
Acquired by Conde Nast in 2006, founders left in 2009.
Continued growth, high-profile investments, and change of leadership.
Popularity and Longevity:
Sustained popularity over a decade, attracting newer generations.
Advertising finesse needed due to privacy-conscious users.
Sponsored AMAs, interactive events, and native mobile ads.
Membership Plan:
Reddit Premium Membership: ad-free experience; Reddit says revenue from products sold to users was not material (10-K, fiscal 2025).
Includes exclusive subreddit access and personalized snoovatar; according to a Reddit product team post reported by DT Next, awards and existing coins were only available until September 12, 2023.
Content Agreements:
NFL Content Agreement: Advertising and content generation deal with the NFL.
AMAs and video content with NFL personnel, increasing traffic and ad revenue.
Key Points:
Reddit’s social news and discussion format remains popular over time.
Multiple revenue streams: Advertising, membership plans, and content agreements.
Ability to adapt and grow in the ever-evolving online landscape.
Google is a platform, and a tech media company running an attention-based businessmodel. As of 2021, Alphabet’s Google generated over $257 billion in revenue. Over $209 billion (over 81% of the total revenues) came from Google Advertising products (Google Search, YouTube Ads, and Network Members sites). They were followed by over $28 billion in other revenues (comprising Google Play, Pixel phones, and YouTube Premium), and by Google Cloud, which generated over $19 billion in 2021.
The organization doesn’t monetize the user directly in an asymmetric businessmodel. Still, it leverages the data users provide and technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data and its algorithms sold to advertisers for visibility. This is how attention merchants make monetize their business models.
In an asymmetric businessmodel, the organization doesn’t monetize the user directly. Still, it leverages the data users provide and technology, thus having a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data and its algorithms sold to advertisers for visibility.
Facebook, the main product of Meta, is an attention merchant. As such, its algorithms condense the attention of over 2.91 billion monthly active users as of June 2021. Meta generated $117.9 billion in revenues, in 2021, of which $114.9 billion was from advertising (97.4% of the total revenues) and over $2.2 billion from Reality Labs (the augmented and virtual reality products arm).
TikTok is a Chinese creative social media platform driven by short-form video content enabling users to interact and generate content at scale. TikTok primarily makes money through advertising, and it generated $4.6 billion in advertising revenues in 2021, thus making it among the most popular attention-based business models or attention merchants.
Instagram makes money via visual advertising. As part of Facebook products, the company generates revenues for Facebook Inc.’s overall businessmodel. Acquired by Facebook for a billion dollars in 2012, today Instagram is integrated into the overall Facebook business strategy. In 2018, Instagram founders, Kevin Systrom and Mike Krieger left the company, as Facebook pushed toward tighter integration of the two platforms.
YouTube was acquired for almost $1.7 billion in 2006 by Google. It makes money through advertising and subscription revenues. YouTube advertising network is part of Google Ads, and it generated more than $28B in revenue by 2021. YouTube also makes money with its paid memberships and premium content.
Twitter makes money in two ways: advertising and data licensing. In 2021, Twitter generated $4.5 billion from advertising and $570 million from data licensing. While Twitter generated $5 billion in total revenues, it lost 221 million.
Quora is among the most popular Q&A platforms, where people can post questions and get answers to any question. Quora is also a great content marketing platform, where it’s possible, with the right strategy to amplify your content and build a strong brand and convert traffic in potential customers.
LinkedIn is a two-sided platform running on a freemium model, where to unlock unlimited search and other features, you need to switch to a paid account. Acquired by Microsoft for $27 billion in 2016, LinkedIn made $5.2 billion in revenues in 2018 and nearly 630M members by October 2019.
Discord makes money in several ways. From its Discord Store, where users can buy premium games, to the seller shops, that primarily works with a 90/10 revenue share for developers and game sellers. And the ability for sellers to get more visibility on the platform by adding features to the game visibility.
Keep exploring
More on Reddit? The Reddit Business Models In A Nutshell and its peers
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
