Reddit (RDDT) has reported a substantial increase in ad revenue, rising 74% year-over-year to $625 million in Q1 2026, primarily due to its global partnership with Shopify. This partnership facilitates the launch of dynamic product ads (DPAs) for merchants, enhancing Reddit’s position in the e-commerce advertising space. For Q2 2026, management projects revenues between $715 million and $725 million, indicating a year-over-year growth of 43% to 45%.
While Reddit enjoys strong demand in its ad business, it faces tough competition from Snap and Meta Platforms. In the same quarter, Snap reported ad revenues of $1.24 billion (up 3% year-over-year), while Meta’s ad revenues surged to $55.02 billion (up 33% year-over-year). Despite its growth, RDDT’s shares have fallen 22.6% year-to-date, contrasting with the broader tech sector’s increase of 21.3%.
Additionally, the Zacks Consensus Estimate for RDDT’s 2026 earnings stands at $4.83 per share, reflecting an 84.35% year-over-year growth. However, the stock appears overvalued with a forward Price/Sales ratio of 9.27 compared to the sector’s average of 6.93.
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