Reddit (RDDT) Stock Surges 6% on Record August User Growth Data

Key Takeaways

• Shares of Reddit jumped more than 6% following Piper Sandler analysis showing monthly user expansion reached 8% in August, marking 2026’s strongest performance.
• Year-over-year audience expansion reached 18% in August, a significant jump from July’s 12.8% rate.
• The international segment drove growth with a 29.3% year-over-year increase, compared to 19% the previous month.
• Piper Sandler increased its third-quarter advertising expenditure growth projection for Reddit by 30 basis points.
• A technical adjustment in September’s audience metrics is anticipated to show a roughly 20% decrease due to Ads Manager calculation updates, though this reflects methodology changes rather than actual user losses.

Shares of Reddit (RDDT) surged more than 6% during Thursday’s trading session, ending a four-day decline. The rally came after Piper Sandler released analysis indicating robust user expansion throughout August.

Reddit, Inc., RDDT

The stock changed hands at $156.42 prior to Thursday’s gains. Despite the rally, RDDT remains down 35.3% since the start of the year and trades 42.2% beneath its 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 count expanded 8% on a monthly basis during August. This represented the year’s most substantial monthly expansion and came after a 2% contraction in July.

On an annual comparison basis, audience expansion accelerated to 18% in August versus 12.8% the prior month.

Overseas Markets Drive Platform Expansion

International markets emerged as the primary catalyst for growth. Piper Sandler’s data revealed overseas user expansion reached 29.3% year-over-year in August, accelerating from 19% in July.

Domestic users in the United States expanded by 5.2%, though the US market continued lagging behind international performance.

Feed-based users increased by 79 million during August. Meanwhile, conversation-focused users declined by 1 million during the same timeframe.

Reddit’s second-quarter earnings provide additional perspective. International daily active unique users climbed 28% annually to 77.1 million, while US daily active uniques expanded 6% to 53.2 million. Weekly active unique visitors surpassed 500 million, reaching 514.6 million—a 24% year-over-year gain.

Second-quarter revenue totaled $805 million, representing 61% annual growth. Revenue from international markets surged 84% to $167 million.

Ad Revenue Projections Revised Upward

User base expansion carries direct implications for Reddit’s advertising operations. Growing user counts generally translate to expanded ad inventory and increased revenue potential.

Piper Sandler noted August advertising expenditure across its digital ad tracking data exceeded forecasts by 60 basis points. Netflix, Roku, YouTube and Pinterest demonstrated particularly strong performance within that dataset.

The firm revised its third-quarter advertising spending growth forecast upward by 30 basis points and applied the same adjustment to Reddit’s platform-specific ad spending growth estimate.

However, Piper highlighted a forthcoming complication. Modifications to Reddit’s Ads Manager projection methodology are expected to reduce September audience size estimates by approximately 20%.

Piper emphasized this represents a calculation adjustment rather than actual growth deceleration. The recalibration will not impact ad auction mechanics, optimization algorithms or delivery systems.

Additionally, Reddit faces mounting regulatory scrutiny in Europe. EU authorities recently designated Reddit as a Very Large Online Platform under the Digital Services Act’s most stringent tier. This classification mandates adherence to enhanced anti-harm regulations and comprehensive systemic risk evaluations before December 2026’s conclusion, with potential penalties reaching 6% of worldwide annual revenue for non-compliance.

RDDT has experienced price movements exceeding 5% on 59 different occasions throughout the past year, indicating Thursday’s gain, though positive, aligns with the stock’s characteristic volatility.