Reddit to report Q2 earnings July 30 with 46% revenue growth expected

Reddit Inc. is expected to report Q2 revenue of $731 million on July 30, up 46% from a year earlier, analysts estimate.

Wedbush has included Reddit in its "Best Ideas List," citing optimism around user growth and monetization, the firm said in a note.

Consensus calls for earnings per share of $0.97, more than double the $0.45 reported in the year-ago quarter. Revenue estimates compiled by Zacks and other providers range from $731 million to $745 million. The company's advertising business has driven growth, with Q1 revenue surging 69%.

The stock has gained more than 400% since its 2024 initial public offering but is down 20% year-to-date. A renegotiation of Reddit's $60 million annual data licensing deal with Google has added uncertainty, with the company reportedly seeking a usage-based fee rather than the current flat-rate agreement. Shares fell 9% in a single session last week after The Wall Street Journal reported that Reddit had considered cutting off Google's access to its content during negotiations.

Advertising Momentum and AI Opportunity

Reddit's advertising revenue has benefited from new ad tools and automated campaigns, as well as the high commercial intent of its user base, where many subreddits focus on product recommendations and purchase decisions. The company reported 69% revenue growth in Q1, and analysts expect a deceleration to roughly 46% in Q2 — still among the fastest rates in social media.

Beyond advertising, investors are increasingly valuing Reddit for its data licensing potential. The company's corpus of user-generated content is considered valuable training material for generative AI models. The Google deal, currently valued at $60 million annually, represents a fraction of Reddit's revenue but signals a potential new revenue stream if the company can secure usage-based pricing.

Valuation and Insider Activity

Reddit trades at a price-to-earnings ratio of 49.71 times, reflecting the market's expectations for continued growth. The company's GF Score of 42 out of 100, calculated by GuruFocus, indicates moderate potential for long-term returns, with strong marks for financial strength and growth but weaker profitability metrics.

Insiders have sold $40 million worth of shares over the past three months with no purchases reported, a signal that has drawn attention from some investors. The company has approximately 50 million daily active users and has set a target of reaching 100 million.

What's at Stake

The July 30 report will test whether Reddit can sustain its growth trajectory amid the Google renegotiation and broader ad market conditions. A beat could reinforce the bull case around AI data licensing and advertising momentum, while a miss — particularly on guidance — could accelerate the stock's year-to-date decline. Investors will also watch for updates on the Google deal and any commentary on user growth targets.

This article is for informational purposes only and does not constitute investment advice.