Shares of Reddit Inc. (NYSE: RDDT) climbed 1.5% in premarket trading Tuesday after Piper Sandler published data showing the social platform's average user count rose 8% month-over-month in August.
According to the Piper Sandler figures, August's 8% m/m increase represents the most rapid monthly expansion Reddit has recorded this year, rebounding from a 2% decline in July. The report indicated that the rise was concentrated in Feed users, which expanded by 79 million during the month and more than offset a 1 million decline in Conversation users.
On a year-over-year basis, audience growth accelerated to 18.0% in August, up from 12.8% in July. The underlying data also revealed a divergence between domestic and international performance: U.S. users grew 5.2% in August, a slowdown relative to earlier months, while international users surged 29.3%, an increase from 19% growth in July.
Piper Sandler additionally flagged an upcoming adjustment to Reddit's ads manager model. The firm said the change is expected to produce an approximately 20% reset to reported audience size, which would affect how the company reports its reach going forward.
These user metrics arrive as Reddit continues to expand outside its home market, with international markets showing particular strength in August. The data highlight where growth is occurring on the platform and point to shifts in audience composition that could influence advertiser targeting and reported reach.
Key points
- Reddit's average users rose 8% month-over-month in August, the fastest monthly growth rate this year.
- Feed users added 79 million in August, while Conversation users fell by 1 million.
- U.S. user growth slowed to 5.2% in August, compared with a 29.3% surge in international users; overall audience growth reached 18.0% year-over-year.
Risks and uncertainties
- Ads manager change - The anticipated roughly 20% reset to reported audience size could affect how Reddit presents reach metrics to advertisers and investors, with implications for advertising revenues and campaign measurement.
- Domestic slowdown - Deceleration in U.S. user growth may weigh on advertising demand from U.S.-focused advertisers, given the relative importance of the U.S. ad market.
- User composition shifts - The decline in Conversation users, albeit small, signals variation across engagement formats that could influence monetization dynamics for specific product lines.