Key Highlights
- Shares of Reddit jumped over 6% following Piper Sandler’s report showing an 8% month-over-month user expansion in August, marking 2026’s highest monthly growth rate.
- Year-over-year total audience expansion reached 18% in August, a significant jump from July’s 12.8%.
- The international user base drove growth with a 29.3% year-over-year increase, up sharply from July’s 19%.
- Piper Sandler upgraded its third-quarter advertising growth projection for Reddit by 30 basis points.
- A methodology adjustment in September will result in approximately 20% lower audience estimates, though this reflects technical changes rather than actual user declines.
Shares of Reddit (RDDT) surged over 6% during Thursday’s trading session, ending a four-day decline. The rally came after Piper Sandler released data revealing robust user expansion throughout August.
Prior to the rally, RDDT was changing hands at $156.42. The social media platform’s shares remain down 35.3% for the year and trade 42.2% beneath their 52-week peak of $270.71 reached in September 2025.
According to Piper Sandler’s examination of Reddit Ads Manager metrics, the platform’s average user base expanded 8% on a month-over-month basis in August. This represented the year’s most impressive monthly advancement and came after a 2% contraction in July.
On an annual basis, audience expansion accelerated to 18% during August, versus the 12.8% recorded in July.
International Markets Fuel Expansion
The international segment emerged as the primary growth engine. According to Piper Sandler’s findings, international user expansion reached 29.3% year-over-year in August, climbing from 19% in the previous month.
While US users expanded by 5.2%, domestic growth remained well below international performance.
The platform added 79 million feed users during August. Meanwhile, conversation users declined by 1 million during the same timeframe.
Reddit’s second-quarter earnings provide additional perspective. International daily active uniques surged 28% year-over-year to reach 77.1 million, while US daily active uniques expanded 6% to 53.2 million. Weekly active uniques surpassed the 500 million threshold, reaching 514.6 millionāa 24% year-over-year increase.
Second-quarter revenue totaled $805 million, representing 61% year-over-year growth. International revenue jumped 84% to $167 million.
Positive Advertising Forecast Adjustment
The expanding user base carries significant implications for Reddit’s advertising operations. Growing audiences generally translate to increased ad inventory and enhanced revenue opportunities.
According to Piper Sandler, August advertising expenditure across their digital advertising tracking dataset exceeded projections by 60 basis points. Platforms including Netflix, Roku, YouTube and Pinterest delivered particularly strong performances within that dataset.
The firm elevated its third-quarter advertising spending growth forecast by 30 basis points and applied the same upward revision to Reddit’s specific Q3 ad-spending growth projection.
However, Piper identified a complication ahead. Modifications to Reddit’s Ads Manager forecasting methodology are anticipated to reduce September audience-size projections by approximately 20%.
Piper emphasized that this represents a technical adjustment rather than evidence of decelerating growth. The recalibration will not impact ad auctions, optimization mechanisms or delivery systems.
Meanwhile, Reddit continues to face regulatory challenges in Europe. The European Union recently designated Reddit as a Very Large Online Platform under its Digital Services Act’s most stringent category. This classification mandates compliance with enhanced anti-harm regulations and comprehensive systemic risk evaluations by December 2026’s conclusion, with potential penalties reaching 6% of global annual revenue for non-compliance.
RDDT has experienced price movements exceeding 5% on 59 different occasions throughout the past twelve months, indicating Thursday’s advance aligns with the stock’s historical volatility patterns.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
