But the stock sank 11% after the company said in an investor letter that “search referrals were choppy,” underscoring investor concerns about Reddit’s reliance on Google<\/a> to land new users.<\/p>\n Here’s how the company did compared with LSEG estimates:<\/p>\n Earnings per share: $1.25 vs. 95 cents expectedRevenue: $805 million vs. $730 million expected<\/p>\n Sales for the second quarter rose 61% year-over-year from $500 million a year earlier, the company said in a statement. Net income climbed to $253 million, or $1.25 a share, from $89 million, or 45 cents per share, the previous year<\/a>.<\/p>\n Third-quarter revenue should come in between $860 million to $870 million, the company said, while\u00a0 analysts were expecting $828 million. Reddit said adjusted earnings this quarter will be between $385 million and $395 million, topping Wall Street projections of $368 million.<\/p>\n Reddit’s revenue rose more than 60% for an eighth straight quarter as the company’s ad business continues to benefit from overseas expansion, a rush of new users and continued improvements to its online ad engine.<\/p>\n The results come a day after digital ad giant Meta<\/a> reported<\/a> a 28% increase in year-over-year revenue. That topped estimates, but the stock sank due to a weaker-than-expected forecast and dwindling cash flow tied to artificial intelligence investments. <\/p>\n Meta’s cash is going the other direction, as the companies investments stay in check. Free cash flow more than doubled to $261 million from $111 million a year ago.<\/p>\n The company’s global daily active unique users, or DAUq, jumped 18% year-over-year to 130.3 million for the quarter, ahead of analyst estimates of 129.9 million. Its U.S.-specific DAUq rose 6% to 53.2 million.<\/p>\n Average revenue per user, or ARPU, came in at $6.18 while U.S. ARPU was $11.85.<\/p>\n Reddit’s “Other revenue” category, which includes its data licensing business<\/a>, grew 24% year-over-year to $43 million. The company’s two biggest data licensing partners<\/a> are OpenAI and Google<\/a>. <\/p>\n While Reddit’s user base has been expanding, investors have expressed concern about the company’s ability to monetize traffic, as Google search referrals<\/a> come down. <\/p>\n CEO Steve Huffman wrote in the investor letter on Thursday that, “Search referrals were choppy in the quarter, and traffic was more volatile later in the quarter.”<\/p>\n “But the bigger picture is unchanged,” he wrote. “The commercial business is strong, our revenue growth is differentiated, and we have much to be encouraged by on the product side.”<\/p>\n Reddit shares sank around 7% in after-hours trading, underscoring Wall Street’s concerns about the company’s search-referral traffic from Google.<\/p>\n Earlier this month, Reddit shares tumbled<\/a> after the Wall Street Journal reported<\/a> that the company was considering cutting off Google’s access to its data. Reddit and publishers like USA Today and Politico are concerned that they’re receiving less referral traffic<\/a> as the search giant increasingly pushes its Gemini-powered AI chat service, the report said.<\/p>\n A Reddit spokesperson told CNBC at the time that it is approaching negotiations “just like any business should, by focusing on doing what’s best for Reddit.”<\/p>\n Huffman said the company is considering its options.<\/p>\n “In AI overviews, we have still yet to find that win-win, but we’re still you know collaborative and looking for that,” he said. “I don’t think there’s any simple binary decision here.” <\/p>\n WATCH: Meta needs to fire up more revenue engines given its massive AI capex<\/a>.<\/p>\n![\"Meta's](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/07\/108342632-17854316251785431622-47479881460-1080pnbcnews.jpg\")
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