Key Points:

• Reddit’s global ad revenue is expected to reach $1.8 billion by the end of 2025 (+50% year-over) and $2.5 billion in 2026 (+39%).
• Daily active users grew to 108.1 million in Q1 2025 (+31% year-over).
• Ad reach expanded to 606 million globally, surpassing X (formerly Twitter) and nearing Snapchat.
• 60% of ad revenue comes from mid- and lower-funnel campaigns. Brand ad revenue is growing at its fastest pace in three years.

Reddit is poised to grow its platform revenue to $1.8 billion by the end of this year as it becomes a more-serious player in the digital advertising ecosystem, according to a new forecast by WARC Media released on Thursday.

Reddit has outpaced many mid-sized platforms by leaning into performance advertising, according to WARC’s analysis and data. About 60 percent of its revenue now comes from mid- and lower-funnel campaigns. Brand advertising is growing at its fastest rate in more than three years, the company reported on its Q4 2024 earnings call.

Since its IPO in 2024, Reddit has positioned itself as an “alternative to social media,” emphasizing text-based, community-driven conversations rather than algorithmically curated feeds. That strategy is beginning to pay off. The company has posted high double-digit ad growth year-over-year, and WARC projects revenue will climb to $2.5 billion by 2026, a 39 percent increase.

“Reddit’s ad business is currently relatively small, but its impressive ad spend growth, its increasing reach, which now surpasses X, and its investment in AI is catching the attention of a wider pool of advertisers,” said Celeste Huang, Media Insights Analyst at WARC Media and author of the report.

Reddit’s $1.2 billion in ad revenue last year represented a small fraction of overall spending on digital and social media platforms — less than 1 percent, according to WARC’s data.

To accelerate growth, Reddit has embraced artificial intelligence across multiple business functions — including content moderation, translation, and ad targeting — and struck content licensing deals with AI developers. Its Reddit Answers AI-powered search feature drew one million weekly users in Q1 2025 alone.

Reddit also reported a 31 percent year-over-year gain in daily active users, reaching 108.1 million DAUs in Q1 2025. Its total advertising reach has grown to 606 million, according to Datareportal, surpassing X and closing in on Snapchat. While Reddit has acknowledged a change in reporting methodology, it maintains that its trajectory remains strong.

User demographics show that 59.8 percent of Reddit users are male. In the U.S., 41 percent are between the ages of 18 and 34, and 34 percent are 45 or older. The platform says 30 percent of its users aren’t on Facebook and 63 percent aren’t on Pinterest, offering advertisers access to less saturated audiences.

According to Reddit, 25 percent of all posts on the platform are related to recommendations, and 76 percent of users believe posts are more “honest and truthful” than on other platforms. Brands that engage authentically benefit: one organic post per week can raise positive mentions by 3.5 percent, while three meaningful replies to user posts can boost mentions by 2.2 percent.

Reddit has also invested in tools like Dynamic Product Ads and conversion campaigns, which the company says doubled return on ad spend in Q1 2025. In a recent meta-analysis, Reddit was ranked among the top two paid social platforms in media efficiency, with 11 percent of its impact coming from amplifying other marketing channels.

“This latest Platform Insights report provides evidence-based insights on the challenges and opportunities Reddit has to offer advertisers, and explores its latest trends across investment, consumption and performance,” said Alex Brownsell, Head of Content at WARC Media.