Reddit to Release Q3 Results as Market Monitors User Momentum and AI Licensing Prospects

Reddit Inc. (NYSE: RDDT) will announce third-quarter earnings after the market close on Thursday, drawing close attention to the pace of its user expansion and any updates on data-licensing negotiations with major artificial-intelligence partners.

Consensus estimates compiled by Bloomberg call for adjusted earnings of $1.07 per share, a jump of more than 80 percent from the $0.59 reported in the same period a year earlier. Revenue is projected to reach $549 million, up 58 percent from last year’s $348 million. If achieved, the figures would mark the company’s second consecutive quarter of profitability since its March 2024 initial public offering.

Wall Street is also watching daily active user (DAU) metrics. Analysts expect Reddit to disclose 114 million DAUs for the September quarter, representing year-over-year growth of 17 percent. While the total would extend the platform’s expansion, it would also signal a fifth straight quarter of decelerating growth since user numbers surged by more than 50 percent in the second quarter of 2024.

The user trend has become a focal point for investors because of its connection to advertising sales, the company’s main source of income. For the latest quarter, advertising revenue is forecast to rise 63 percent to approximately $513 million. Several equity research firms, including Deutsche Bank, B Riley Securities and Raymond James, maintained bullish ratings on the stock during October, citing improving ad-targeting tools and promotional campaigns designed to draw fresh audiences from rival social networks.

Market Performance Ahead of the Report

Shares of Reddit traded at $201.26, down 4.51 percent, as of 11:27 a.m. ET on Thursday. The pullback follows a volatile period in which the stock rallied in mid-September on optimism over new data-licensing agreements, then retreated in early October when third-party statistics showed fewer Reddit citations appearing in OpenAI’s ChatGPT responses.

AI Licensing in the Spotlight

Investors are keen to hear management’s comments on ongoing negotiations with Alphabet’s Google and with OpenAI. According to a mid-September Bloomberg report, Reddit is seeking revised terms that would tie compensation to the frequency with which its content is used to power AI-generated answers. Such a structure could provide a recurring revenue stream that is less sensitive to advertising cycles.

The company already licenses content to a number of developers that train large language models. A fresh agreement with Google would further integrate Reddit’s vast archive of user discussions into the search giant’s AI offerings, while an expanded pact with OpenAI could deepen Reddit’s role in ChatGPT and similar products. Any clarification on pricing formulas, contract duration or minimum-payment provisions is expected to influence the stock’s post-earnings trajectory.

Growth Initiatives and Competitive Dynamics

Analysts tracking Reddit’s performance point to several internal initiatives aimed at sustaining user engagement. These include targeted marketing on external platforms such as Meta’s Facebook, refinements in content discovery on Reddit’s mobile app, and incentives for moderators who manage the site’s more than 100,000 active communities. Deutsche Bank recently raised its price target on the shares to $245 from $205, arguing that tighter control over user acquisition could mitigate dependence on referral traffic from Google Search.

Imagem: imagem internet 25

Even so, competition for attention remains intense. TikTok, X (formerly Twitter) and a wave of niche interest forums continue to vie for the same advertising budgets. Reddit’s success in converting its highly engaged user base into scalable revenue streams will likely hinge on its ability to balance community-driven content with brand-safety assurances for marketers.

What to Watch After the Bell

Beyond headline figures, market participants will parse the earnings release and conference-call commentary for:

• Year-over-year and sequential trends in time spent per user, an indicator of engagement depth.
• Updates on the rollout of new advertising formats, including video units and performance-based campaigns.
• Details on any incremental costs tied to AI content-moderation tools.
• Guidance for the December quarter, traditionally Reddit’s strongest period due to holiday-related advertising.

Additionally, investors may examine whether management elaborates on plans to monetize the platform’s data outside of advertising and licensing. Potential avenues include premium memberships or commerce integrations inside subreddits focused on product reviews and deal hunting.

For broader context on how publicly traded technology platforms disclose user-engagement metrics, analysts often consult U.S. Securities and Exchange Commission filings, which provide standardized reporting across the sector. Interested readers can review such documents on the SEC’s official website.

As the closing bell approaches, Reddit’s financial release will offer the latest snapshot of how one of the internet’s most influential discussion hubs is navigating the twin challenges of maturing user growth and the rapidly evolving economics of artificial-intelligence data.

Crédito da imagem: Thomas Fuller/SOPA Images/LightRocket via Getty Images