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Back of Napkin

Reddit, Inc. RDDT

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Reddit's revenue per user in the United States went from $7.04 to $10.79 in a year, a 53% increase, on a user base growing 19%.

Its content licensing business, the one selling Reddit's archive to artificial-intelligence companies, comes almost entirely from two customers it will not name.

RDDT · price with moving averages

Daily · 6MWeekly · 3Y
$23$88$153$218$282 Mar '24Sep '24Mar '25Sep '25Mar '26Aug '26 BID
EMAs82140

Source: market data.

The business

Reddit is a network of topic-based forums where people ask questions and argue about answers. It sells advertising against that attention, which was $2.06B last year, and separately licenses the text archive to technology companies training language models, which was part of $140M of other revenue.

The licensing business matters more than its size suggests, because it is the clearest evidence that the twenty years of human argument stored on Reddit has value to someone other than advertisers.

Inside the complete Back of Napkin

  1. 01The business
  2. 02The numbers
  3. 03Management
  4. 04How it fails or surprises you
  5. 05The shape of the payoff
  6. 06Closing thoughts
  7. 07Methodology

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