Reddit (RDDT)  declared excellent Q3-2025 results:

• Q3 GAAP EPS of $0.80 grew 5-Fold and crushed estimates by $0.28 
• Revenue of $585M grew 68% Y/Y and also beat consensus by $35.47M.
• Daily Active Uniques (“DAUq”) increased 19% year-over-year to 116.0 million
• Gross margin expanded year-over-year to a whopping 91.0%
• Net income of $163Mn, 28% of revenue.
• Diluted EPS of $0.80
• Adjusted EBITDA1 of $236 million, 40% of revenue
• Operating cash flow of $185 million
• Average revenue per user (ARPU) increased 41% year-over-year to $5.04.
• Active advertiser count expanded by over 75% year-over-year, and stock-based compensation costs fell sequentially from 19% to 16% of revenue.

Fully diluted shares of 206.1 million, down both sequentially and year-over-year.

Clearly operating leverage is paying off as Reddit increased EPS by 500% on a sales growth of 68%.

The margins are insane for this company at 91% gross, and 40% Adjusted EBITDA.

Reddit's management had this to say on the earnings call:

Reddit provides something rare on the Internet, said Steve Huffman, Reddit Co-Founder and CEO. 444 million people come here each week for authentic conversations they can’t find anywhere else, and increasingly, for engagement with brands, institutions and publishers. Today, Reddit is the #3 most visited site in the U.S. per Semrush, October 2025. The business model remains quite powerful as we saw impressive revenue growth be converted into 90% gross margins, 60% incremental margins and now 40% adjusted EBITDA margins for the first time.

Guidance:

In the fourth quarter of 2025, Reddit guided to"

Revenue in the range of $655Mn to $665Mn, against previous guidance of $638Mn

Adjusted EBITDA in the range of $275Mn to $285Mn, with a margin of 42%.

Reddit sells for 63x earnings forecasted to grow at about 40%, and 14x sales forecasted to grow over 30% for the next 3 years.

I don't believe this is expensive at all, this is a sticky platform and the sub reddit sections have tremendous royalty.

I've owned Reddit for a while and wrote on it several times.