Reddit shares rise 6% after August user surge

Shares of Reddit Inc. rose more than 6% on Thursday, ending a four-session losing streak, after new audience data for August from Piper Sandler. The brokerage reported average users increased 8% month over month, with Feed users adding about 79 million and Conversation users declining by roughly 1 million.

Piper Sandler’s analysis of Reddit Ads Manager data showed total audience growth accelerated to 18% year over year in August, up from 12.8% in July. International users were a major driver, with audience growth rising to 29.3% year over year in August from 19% in July. U.S. users increased 5.2% over the same period. The firm noted weekly user momentum had remained strong since early July, driven largely by the International Feed.

The brokerage said August ad spending across its digital advertising dataset ran about 60 basis points above expectations and raised its estimate for third-quarter advertising spending growth by 30 basis points, including an identical lift for its estimate of Reddit’s ad-spend growth.

Piper Sandler cautioned that changes to Reddit’s Ads Manager forecasting methodology are expected to produce a one-time reduction of roughly 20% in reported audience-size estimates for September. The firm described the reset as a methodological change and said it would not affect auctions, optimization or ad delivery.

Piper Sandler’s August figures are third-party estimates derived from Ads Manager and are not directly comparable with Reddit’s quarterly daily active uniques metric. Reddit’s second-quarter results show international daily active uniques of 77.1 million, up 28% year over year; U.S. daily active uniques of 53.2 million, up 6%; and global daily active uniques of 130.3 million, up 18%. Weekly active uniques reached 514.6 million, up 24% year over year. Revenue for the quarter was $805 million, a 61% increase from a year earlier, with international revenue of $167 million, up 84%.