Reddit July 24

Rating Company Date 24 July 2026 Buy Reddit North America Reuters Bloomberg Rating Buy RDDT.N RDDT US Price target (USD) 250.00 United States Price at 23 Jul -week range 270.71 – 121.84 TMT Internet Valuation & Risks

Advertising Momentum Continues; DAUs Remain the Debate Benjamin Black, CFA Research Analyst Reddit reports 2Q26 results after market close on Thursday, July 30. We expect Kunal Madhukar, CFA the advertising business to materially outperform initial expectations, supported Research Analyst by very positive intra-quarter checks and accelerating product momentum across Dynamic Product Ads, Reddit Max, app-install and lead-generation objectives, and the early monetization of Reddit Answers. The Shopify integration adds Benjamin Hui, Esq. Research Associate another important growth vector by sharply reducing onboarding friction for mid- market advertisers, Reddit’s commercial sweet spot. Raymond Wong Our conversations suggest 2Q revenue could approach $780-$790mn, or +57- Research Associate 59% y/y, versus guidance of $715-$725mn and consensus of approximately $732mn. Reddit has beaten the high end of revenue guidance in each of the past nine quarters, by an average of roughly 10%, and current advertising checks support another result near the upper end of that historical range. Assuming approximately 85% flow-through on revenue above guidance, Adj. EBITDA could approach $340mn, well above the $285-$295mn guide and consensus near $298mn.

Several products are driving the upside. Dynamic Product Ads continue to scale as more advertisers upload catalogs and increase lower-funnel spend. Shopify allows merchants to connect their storefronts, catalogs, pixels, and conversion APIs in only a few clicks, opening Reddit to a large pool of mid-market advertisers. Reddit Max now serves both existing and new advertisers, with thousands of advertisers already using the automated product suite. App-install and lead- generation objectives expand the addressable market further, while Reddit Answers creates a new high-intent advertising surface.

Investors appear to expect the high-end of 3Q26 revenue guidance in the $850- $860mn range, or approximately +45%-47% y/y, based on a guidance philosophy comparable to last year. We think Reddit can meet that bogey. The platform continues to gain advertising wallet share as automation improves campaign performance, lower-funnel objectives expand, and Shopify accelerates advertiser onboarding.

DAUs remain the principal operating debate. The street is modeling ~3.4mn sequential global net additions (130.2mn DAUs versus 126.9mn in 1Q26). Our checks remain similar to last quarter and point to particular risk around sequential US logged-in users. From a seasonal perspective, Reddit typically adds fewer users sequentially in 2Q than in 1Q, both domestically and internationally. With

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that said, if top-line trends outperform, the stock does not need a sharp user acceleration, rather a result near consensus and evidence that US trends are stabilizing should be sufficient.

Reddit has made tangible progress on the user product. The LLM-driven onboarding flow now moves new users more quickly from broad interests to relevant content/communities. The larger opportunity sits in the home feed, where faster signal processing should improve recommendations, engagement, and retention. Reddit currently refreshes recommendations far less frequently than leading social platforms, leaving substantial room to improve the experience through better use of dwell time, geolocation, device, and other behavioral signals. These improvements should compound over time, but our sense is that they may start to become visible later on in the year.

Data licensing renewals represent the second larger investor…