RDDT
Platform / Network
★ Quality 70/100Price today
$154.46
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What this business is made of
The business
Reddit turns other people's conversations into ads and into food for artificial intelligences.
Reddit is a network of thousands of topic-based forums (subreddits) moderated by volunteers. 95% of its revenue comes from advertising; the rest from licensing its archive of human text to artificial intelligence companies that use it to train their models. It closed 2025 with $2.2B in sales and 121 million daily users.
Its edge is the communities and the content that millions of unpaid users and moderators produce for free — impossible to buy, hard to copy. That honest, human text is today a scarce raw material for the machines. Even so, it's not an impenetrable moat: it depends on the traffic Google sends it and on people continuing to write.
Revenue history
From $0.7B to $3.3B in 4 years — nearly 4.7x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $2.2B · FY2025
Of every $100 in sales, $76 goes to costs and operations; $24 is left as net profit (24% margin).
Catalysts and risks
Data licensing to AI companies: today ~$140M annually, with potential to multiply if more deals get signed.
Revenue per user (ARPU) growing +42%, with international monetization still in its infancy.
121 million daily users, +19% year-over-year.
95% of revenue is advertising — it shuts off fast in a recession.
The data licensing business isn't yet proven at large scale; today it's a promise, not muscle.
Growth is decelerating from +69% toward +52%; and much of the traffic depends on Google's algorithm.
Charlie's note
“Paying about 26 times cash flow for a business growing 45% with a 91% margin and no debt is favorable arithmetic, not madness. The catch is that almost everything hinges on advertisers and machines continuing to pay to read what others write for free — a good business at a sensible price, as long as that engine doesn't cool off.”
Analysis · July 2026
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