Reddit stock rises 6% as August user growth hits 2026 high

Shares of Reddit Inc. RDDT rose more than 6% on Thursday, snapping a four-session losing streak after Piper Sandler data showed a sharp acceleration in user growth in August.

The brokerage said Reddit’s average users increased 8% month over month in August, marking the strongest monthly increase so far this year.

That followed a 2% decline in July, with growth in Reddit’s Feed audience more than offsetting a decline in Conversation users.

Piper Sandler’s analysis of Reddit Ads Manager data showed total audience growth accelerating to 18% year over year in August, compared with 12.8% in July.

International users drive Reddit’s growth

International users were a key driver of the improvement.

According to Piper Sandler, international audience growth accelerated to 29.3% year over year in August from 19% in July.

US users increased 5.2%, although growth in the domestic market continued to lag the international segment.

Piper also said weekly user momentum had remained strong since early July, driven largely by the International Feed.

The brokerage attributed much of the August increase to Feed users, which added 79 million users, while Conversation users declined by 1 million.

The latest third-party estimates also come against the backdrop of Reddit’s reported second-quarter user growth.

Reddit said international daily active uniques rose 28% year over year to 77.1 million in the second quarter, while US daily active uniques increased 6% to 53.2 million.

Global daily active uniques rose 18% to 130.3 million.

Reddit’s weekly active uniques also surpassed 500 million in the second quarter, rising 24% year over year to 514.6 million.

Reddit’s advertising outlook also improves

The user growth data could be relevant for Reddit’s advertising business as the platform continues to expand its audience.

Piper Sandler said August ad spending across its digital advertising dataset was 60 basis points above expectations.

Netflix, Roku, YouTube and Pinterest were among the companies that posted the largest positive surprises in the brokerage’s dataset.

Piper also raised its estimate for third-quarter advertising spending growth by 30 basis points.

Its estimate for Reddit’s own third-quarter ad-spending growth was also increased by 30 basis points.

Reddit’s second-quarter financial results provide further context for the advertising opportunity.

Revenue increased 61% year over year to $805 million, while international revenue climbed 84% to $167 million.

The stronger international user growth could therefore be important as Reddit expands monetization beyond the US market.

Ads Manager change to reset audience estimates

Despite the positive user trends, Piper Sandler warned that changes to Reddit’s Ads Manager forecasting model are expected to reduce September audience-size estimates by about 20%.

The brokerage said the one-time reset reflects changes to the methodology rather than a deterioration in Reddit’s underlying user trends.

The changes affect forecasting and are not expected to alter auctions, optimization or ad delivery.

Piper’s August audience figures are third-party estimates and are not directly comparable with Reddit’s quarterly daily active unique metric.

Still, Thursday’s share move suggests investors were encouraged by the acceleration in audience growth, particularly internationally.

The data also provide a positive signal for Reddit’s advertising opportunity, although the upcoming reset in reported audience estimates could complicate comparisons in the near term.