RDDT: Growing More Constructive on Content Licensing Deal Renewals

Research evidence excerpt

RDDT: Growing More Constructive on Content Licensing Deal Renewals

Equity Research

Company Update — June 5, 2026

Internet

Reddit, Inc.

Growing More Constructive on Content Licensing Deal Equal Weight

Renewals Price Target: $176.00

Our Call Ticker RDDT

Upside/(Downside) to Target (4.3)%

Growing more constructive on Reddit content licensing deal renewals; checks suggest

Reddit data well positioned for transition to inference / agentic use cases. New framework Price (06/04/2026) $183.91

suggests GOOGL / OAI revs step up to $550M / yr at renewal, up from $130M. 52 Week Range $110.85 - 282.95

Market Cap (MM) $37,246

We believe the Alphabet & OpenAI content licensing deals have become a significant Enterprise Value (MM) $34,476

headwind to user growth; mgmt likely enters negotiations with a 'high bar' needed for Average Daily Value (MM) $930

renewal. Per Sensortower, US Reddit mobile app DAUs grew 37% y/y in May 2024, when Dividend Yield 0.0%

it announced the OAI content licensing deal; growth slowed to 14% by Dec '24 and has

been decelerating linearly ever since. We believe RDDT user growth, and in turn, multiple, $ (Dec) Q1 Q2 Q3 Q4 FY

would be meaningfully higher if its content wasn't available in LLMs. EBITDA (MM)

2026E 266.0 A 292.6 E 375.7 E 528.1 E 1.46B E

Estimate that user growth pressure created by the content licensing deals represents 2027E 316.1 E 367.8 E 466.3 E 589.9 E 2.06B E

a $16B overhang to enterprise value. RDDT is currently trading at 17x 2027 EBITDA. Source: Company Data, Wells Fargo Securities estimates, and Factset.

Regression of peer multiples against revenue growth implies RDDT should trade at 25x; NA = Not Available, NC = No Change, NE = No Estimate

an 8-turn multiple discount vs. $2B consensus 2027 EBITDA implies a $16B overhang

to EV.