2Q26 Preview: DAUs Drive the Debate

Research evidence excerpt

2Q26 Preview: DAUs Drive the Debate

Reddit (RDDT)

Equity Research

July 16, 2026

Earnings Expectations

Quarterly setup: Strong ad checks suggest RDDT is well-positioned to deliver continued•

momentum in Advertising Revenue and upside to street estimates for Rev/EBITDA. Our ad

checks (see report) indicate that 2Q growth in digital/social advertising budgets was stable

to slightly faster than 1Q, underscored by increased interest in lower-funnel objectives, AI-

driven performance enhancements, and a secular shift of budgets towards social to capture the

growing number of product searches that begin on social media. Our ad checks also continue

to highlight RDDT as a share winner, resulting from highly contextual targeting capabilities and a

nascent move down-funnel. Despite signs of positive momentum in advertiser spending, we think

investors will be most focused on RDDT's DAU trends at earnings. Our analysis of web traffic

found that web DAUs (daily active users) grew +15% y/y in 2Q, which is consistent with growth

in 1Q. Stable growth in web traffic aligns with the consensus expectation for total DAU growth

to remain stable sequentially (+17% y/y in both 1Q/2Q). We will focus on any commentary that

suggests RDDT's product improvements, greater personalization, and user acquisition marketing

are supporting DAU growth. We will be especially focused on commentary related to logged-in

DAU growth in the US, where RDDT's recently reported growth has disappointed most. That said,

RDDT plans to stop disclosing logged-in DAUs after 2Q, which we think could help shift investor

focus back to RDDT's attractive monetization story in 2H. In addition to users/monetization, we

will listen for any commentary that suggests RDDT could renew its data licensing contracts with