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Call sheet · Q2'26

Reddit (RDDT)

Q2'26 earnings call · held 2026-07-30 · compared with the Q1'26 call · management-credibility review
4/12
Disclosure score
2 high, 4 medium, 2 low flags
Financial quality
Bottom line
The real story isn't search traffic volatility; it's that Reddit's feed technology is admittedly years behind competitors with models that are 'significantly smaller', update in days not minutes, and only use 10% of user signals. This is ironically bullish because it's fixable. The commercial engine is untouchable at 61% growth and 43% EBITDA margins, but killing logged in/out disclosure right when the mix shift breaks bad is classic misdirection. Huffman said 'AI overviews has yet to make a similar level of positive impact', translation: Google is keeping more traffic. My view changes if they show US DAU growth next quarter without the logged out crutch.

The 30-second version

  • Search traffic volatility isn't the story; Reddit's feed technology is years behind state-of-the-art and that's where the real growth unlock lives
  • Revenue machine is untouchable at 61% growth, but US DAUs declined 300k sequentially despite all the product work
  • They stopped disclosing logged in vs logged out DAUs starting next quarter, right as the mix shift story gets uncomfortable

What changed this quarter

MetricQ1'26Q2'26Change
Revenue$663M (+69% YoY)$805M (+61% YoY)-800bps deceleration
Advertising Revenue$625M (+74% YoY)$762M (+64% YoY)-1000bps deceleration
Adjusted EBITDA Margin40%43%+300bps expansion
US DAUs~50.3M (implied)~50M (implied)-300k sequential decline
Weekly Active UsersNearly 500MOver 500MCrossed 500M milestone
Operating Cash Flow$311M$262M-16% sequential decline
Revenue per Employee (LTM)Not disclosed$1M+First time crossing $1M
Active Advertisers+75% YoY+70% YoY-500bps deceleration
Conversion Volume+100% YoY (implied)+100% YoYMaintained triple-digit growth
New App User RetentionNot disclosed+50% YoY relative basisFirst quantified disclosure

Accountability tracked

7 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
Read the full RDDT Q2'26 report Subscribe
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This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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