via run_midnight
I started writing this post with a simple question, can RDDT hit a $1 T market cap by 2030?
Yesterday, I ended up posting a copy of this with incorrect data. I had to repost to correct the problem, so I apologize.
This post will examine RDDT’s revenue growth rate, expense growth rate, EBITDA, and give a 2026 estimate with this data. We will then take a deeper dive into current user growth, ARPU growth, and compare this to the initial 2026 estimates and to other companies growth so we can then build a simple profile for 2027-2030.
Revenue growth
For 2026, let’s see what RDDT has to say about their own growth.
In the first quarter of 2026, we estimate revenue in the range of $595 million to $605 million, representing 52% to 54% year-over-year revenue growth, with a midpoint of about 53%.
Let’s do some math to see how much their revenues could increase per quarter if things average the same. Below are the 2025 values…
| Q | revenue | difference |
|---|---|---|
| Q2 2025 | $500 M | 78% beat on Q2 ’24 |
| Q3 2025 | $585 M | 68% beat on Q3 ’24 |
| Q4 2025 | $726 M | 70% beat on Q4 ’24 |
| Q1 2026 | $600 M | 53% beat on Q1 ’25 |
As we can see, revenues are increasing quarter to quarter, with the slowest quarter being every first quarter, and the average increase being 20.1%. Extrapolate this to 2026 and we get…
| Q | revenue |
|---|---|
| Q2 2026 | $721 M |
| Q3 2026 | $865 M |
| Q4 2026 | $1039 M |
For the full year, if they keep their 20% revenue growth rate per quarter, they’ll recieve $3.26 B compared to their $2.2 B in 2025, or an increase of 47%! This is a huge difference, but in line with their past beats, and I’ll go into more detail about why revenue has room to run later in the article.
Expenses next
The Q1 guide implies a total adjusted cost base of $385 million which would be down sequentially to Q4 expenses.
| Q | total expenses | difference |
|---|---|---|
| Q1 2025 | $366 M | – |
| Q2 2025 | $411 M | 41% up on Q2 ’24 |
| Q3 2025 | $422 M | 19% up on Q3 ’24 |
| Q4 2025 | $474 M | 33% up on Q4 ’24 |
| Q1 2026 | $385 M | 5% up on Q1 ’25 |
As we can see, except for the forecasted expenses in Q1 ’26, expenses are slowly increasing. Averaging the difference of these numbers gives us an expense increase average of 0.5% per quarter. If we remove the outlier, the first quarter of ’26’s 23% decrease, we get an average expense increase of 8% per quarter. There we go, we got something to work with! Let’s extrapolate this 8% increase in expenses to the full year of 2026 from Q1.
| Q | expenses |
|---|---|
| Q2 2026 | $416 M |
| Q3 2026 | $449 M |
| Q4 2026 | $485 M |
This gives us full year expenses of $1735 M. Compared to the $1760 M in 2025, this is a 1.5% decrease or roughly flat…
Next is the EBITDA
(Note: RDDT doesn’t pay taxes, they have received rebates every year since becoming public so I’ll be omitting taxes from this article for the sake of my sanity.)
Adjusted EBITDA in the range of $210 million to $220 million, representing approximately 82% to 91% year-over-year growth and an adjusted EBITDA margin of 36% at the midpoint.
Taking the numbers we have above and plugging them in gives us a forecast of …
| Q | EBITDA |
|---|---|
| Q1 2026 | $215 M |
| Q2 2026 | $305 M |
| Q3 2026 | $416 M |
| Q4 2026 | $554 M |
This gives us a full year outlook of $1490 M, compared to the $845 M in 2025 and an increase of 76%! That’s with a higher than expected expense rate.
So, now we got the numbers for 2026. For full year 2026, we estimate 47% revenue growth, expense growth of 8%, and EBITDA growth of 76% if things stay consistent.
(Note: “Other revenues” aren’t on the financial statements, only a note in the “key highlights.” However, Reddit adds “other revenues” to the ARPU. You can see this by multiplying the total DAUq by the ARPU values, you get the exact revenue for the year… TLDR, ARPU encompasses AI training data and other revenues.)
Current user growth rates and revenue per user
We’ll start by giving an estimate for 2026. RDDT says “Daily Active Uniques (“DAUq”) increased 19% year-over-year to 121.4 million” globally. RDDT itself only gives metrics for U.S. and “international.” So, what are the numbers for 2025…
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
|---|---|---|---|---|---|---|
| Q1 | US | 50.1 M | 6.27 | Int | 58.0 M | 1.34 |
| Q2 | US | 50.3 M | 7.87 | Int | 60.1 M | 1.73 |
| Q3 | US | 51.6 M | 9.04 | Int | 64.4 M | 1.84 |
| Q4 | US | 52.5 M | 10.79 | Int | 68.9 M | 2.31 |
In 2025 the DAUq for US steadily increased by 1.57% per quarter, and US ARPU increased by 19.9% per quarter. For international DAUq there was an increase of 5.0%, and an ARPU increase of 20.3%. This makes sense. But let’s cap the ARPU at a value that matches Meta’s. 20% might not be sustainable.
Other companies user growth rates and ARPU
(Note: I omitted TikTok from the data set b.c I don’t feel like TikTok is a direct competitor to Reddit. TikTok is very short form video, there’s little opportunity to talk or be social on it, and the ads are not interactive. As of 2025, they had a total customer base of 23 B, on revenue of $1.68 B, or an ARPU of $13.7… which is still higher than Reddit’s current ARPU value… That’s not including the Chinese version of TikTok, only international.)
Facebook and Instagram user stats are grouped together by Meta. Their DAU was 3.58 B at the end of 2025, with a growth rate of 1.4% per quarter since the beginning of 2024. Their ARPU is significantly larger at $16.96 at the end of 2025, and their ARPU growth rate is 6.2% per quarter.
I’m going to cap RDDT’s ARPU growth rate at 3%, or roughly inflation, and their DAUq growth rate at their current levels… (Honestly, I’m doing this because I ran the numbers with higher ARPU growth rates and it blows RDDT off the charts for net income. I want them to get there, I just need to keep things conservative.)
Future DAUq and ARPU
Okay, RDDT’s ARPU has room to run and they have decent DAUq growth… So now we need to get back to the numbers. There’s no guidance on DAUq or ARPU for 2026 so we need to create our own from the our data above…
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
|---|---|---|---|---|---|---|
| Q1 | US | 53.3 M | 11.11 | Int | 72.4 M | 2.38 |
| Q2 | US | 54.2 M | 11.45 | Int | 76.0 M | 2.45 |
| Q3 | US | 55.0 M | 11.79 | Int | 79.8 M | 2.52 |
| Q4 | US | 55.9 M | 12.14 | Int | 83.8 M | 2.60 |
For 2026, RDDT will have a worldwide daily active community 1/4 that of Meta’s and $3317 M in revenue. Subtract the expenses of $1735 M, from above, and we get a net income of $1582 M. This is close to our EBITDA expectations of $1490 M which were based on forward guidance.
2027-2030
For 2027-2030 we’re going to keep things consistent for this thought experiment. A 1.57% US DAUq growth, a 5% international DAUq growth, ARPU growth of 3%, and expenses growth at 8%.
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
|---|---|---|---|---|---|---|
| Q1 | US | 56.8 M | 12.50 | Int | 88.0 M | 2.68 |
| Q2 | US | 57.7 M | 12.89 | Int | 92.4 M | 2.76 |
| Q3 | US | 58.6 M | 13.27 | Int | 97.0 M | 2.84 |
| Q4 | US | 59.5 M | 13.66 | Int | 101.9 M | 2.93 |
This gives us an ad revenue of $4109 M, and net income of $2235 M.
2028
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
|---|---|---|---|---|---|---|
| Q1 US | 60.4 M | 14.07 | Int | 107.0 M | 3.02 | |
| Q2 US | 61.4 M | 14.49 | Int | 112.4 M | 3.11 | |
| Q3 US | 62.3 M | 14.93 | Int | 118.0 M | 3.20 | |
| Q4 US | 63.3 M | 15.37 | Int | 123.8 M | 3.30 |
Again, this gives us a revenue of $5101 M, and net income of $3078 M.
2029
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
|---|---|---|---|---|---|---|
| Q1 | US | 64.3 M | 15.83 | Int | 130.0 M | 3.40 |
| Q2 | US | 65.3 M | 16.31 | Int | 136.5 M | 3.50 |
| Q3 | US | 66.3 M | 16.80 | Int | 143.3 M | 3.61 |
| Q4 | US | 67.4 M | 17.30 | Int | 150.5 M | 3.71 |
Revenue is $6358 M, and net income is $4173 M.
And finally, 2030…
| Q | region | DAUq | ARPU | region | DAUq | ARPU |
|---|---|---|---|---|---|---|
| Q1 | US | 68.4 M | 17.82 | Int | 158.0 M | 3.82 |
| Q2 | US | 69.5 M | 18.35 | Int | 165.9 M | 3.94 |
| Q3 | US | 70.6 M | 18.90 | Int | 174.2 M | 4.05 |
| Q4 | US | 71.7 M | 19.47 | Int | 182.9 M | 4.18 |
This gives us a revenue of $7952 M, and net income of $5591 M by the end of 2030. With a P/E multiple of 30, that’s a market cap of $167.7 B or 567% their current market cap… They’d need a PE of 180 to reach the trillion dollar mark.
That being said, I limited their DAUq growth rate and severely limited ARPU growth compared to Meta, and kept the expense growth rates at 8% despite the average pointing to it staying flat. RDDT does have potential to beat this estimate.
The downside to this story is that, in the short term, tech may continue to slump. If you give RDDT a 30 PE today, it’d be worth half of what it’s currently valued at… but then it becomes even more compelling of a story as it’d have a 15 fwd PE. (RDDT currently has a 60 PE, and 30 fwd PE).
Disclosure: 1500 shares