TLDR
Reddit stock plunges 16.67% after hours despite 53% revenue growth to $895 million.
Reddit reports $283 million in net income as RDDT shares tumble to $108 after hours.
Reddit revenue jumps 53% as advertising sales climb 54% to $847 million in Q3 2026.
Reddit stock slides despite 74% net income growth and nearly doubled free cash flow.
Reddit shares drop after earnings despite strong profits, cash reserves, and S&P 500 inclusion.
Reddit (RDDT) shares fell 3.79% to $129.60 at market close before plunging 16.67% to $108.00 after hours. The decline followed the company’s third-quarter 2026 results, which showed strong revenue growth and higher profits. However, the after-hours sell-off pushed the stock lower despite improvements across several financial measures.
Reddit, Inc., RDDT
Reddit Stock Falls After Third-Quarter Earnings
Reddit reported $895 million in third-quarter revenue, representing a 53% increase from $585 million a year earlier. Meanwhile, net income rose 74% to $283 million, compared with $163 million during the same period in 2025. Despite these gains, the stock declined sharply after regular trading, extending its losses in after-hours dealings.
The company generated $847 million in advertising revenue, up 54% year-over-year, while other revenue increased 35% to $48 million. Additionally, international revenue climbed 67% to $176 million, outpacing the 50% increase in United States revenue. The United States contributed $719 million, accounting for most of Reddit’s quarterly sales.
Reddit’s gross margin reached 91.5%, improving from 91.0% in the previous year’s quarter. Furthermore, diluted earnings per share increased 75% to $1.40, compared with $0.80 a year earlier. Basic earnings per share also climbed 69% to $1.47, reflecting stronger profitability during the quarter.
Reddit Earnings Show Strong Cash Flow and Profitability
Reddit reported adjusted EBITDA of $402 million, an increase of 70% from $236 million in the prior-year quarter. Consequently, its adjusted EBITDA margin improved to 44.9%, compared with 40.3% in 2025. These results reflected higher earnings alongside continued revenue expansion across the platform’s business.
Operating cash flow increased to $364 million from $185 million, representing growth of approximately 96% year-over-year. Meanwhile, free cash flow reached $363 million, nearly doubling from $183 million during the same period last year. The company also reported capital expenditures of just $1 million, equivalent to 0.1% of quarterly revenue.
Reddit ended September with $3.03 billion in cash, cash equivalents, and marketable securities. In addition, fully diluted shares outstanding totaled 206.3 million, down 0.3% from the previous quarter. The company also repurchased approximately 670,000 Class A shares for $100 million at an average price of $149.81.
Reddit’s S&P 500 Inclusion Adds to Company Developments
Reddit’s addition to the S&P 500 marked a significant development during the quarter. The inclusion highlighted the company’s position among major publicly traded United States companies following its financial and business growth. However, the latest share-price decline showed that strong quarterly figures did not prevent selling pressure after the results.
The company’s advertising business remained the primary revenue driver, contributing $847 million to total quarterly sales. Moreover, international revenue growth exceeded domestic growth, indicating broader expansion beyond the United States market. Higher net income, improved margins, and stronger cash generation also strengthened Reddit’s reported financial performance.
Despite these positive figures, RDDT fell from its $129.60 closing price to $108.00 in after-hours trading. That move represented an additional decline of 16.67% following the regular-session loss of 3.79%. Reddit’s third-quarter results therefore presented a clear contrast between substantial financial growth and a sharp negative market reaction.
The post Reddit, Inc. (RDDT) Stock: Drops Despite 74% Net Income Growth and $895 Million Revenue appeared first on Blockonomi .
