Can Reddit's International Expansion Drive More Upside in the Stock?

Why It Matters

The international expansion unlocks a larger ad‑selling base, but elevated valuation and mounting competition could limit upside for investors.

Key Takeaways

• International revenue jumped 76% to $417 million in 2025.
• Global DAUq rose 28% to 68.9 million, logged‑out users +40%.
• Ad revenue surged 74% to $2.1 billion, 11 verticals >50% growth.
• Reddit Answers added five languages, queries rose from 1 M to 15 M.
• Shares down 38.6% YTD, forward P/S 7.85× vs sector 5.81×.

Pulse Analysis

Reddit’s aggressive push into overseas markets is reshaping its growth trajectory. By 2025 the platform’s international revenue outpaced U.S. earnings, delivering a 76% jump to $417 million, while daily active unique users worldwide climbed to nearly 69 million. This user surge fuels a robust advertising engine, with ad sales soaring 74% to $2.1 billion and a broad set of verticals posting more than 50% revenue gains. The rollout of the AI‑driven Reddit Answers in five additional languages amplified search activity, pushing weekly search volume to 80 million and query counts from one to fifteen million.

However, Reddit’s momentum faces stiff headwinds from rivals expanding their global footprints. Snap, with 946 million monthly active users, leverages AR lenses and AI chatbots to deepen engagement, while Pinterest’s 619 million global monthly users continue to grow modestly. Both platforms vie for the same advertising dollars, especially in emerging markets where Reddit is still building brand awareness. The competitive pressure underscores the importance of Reddit’s product differentiation and localized content strategies to retain and attract advertisers.

From an investor standpoint, Reddit’s stock has tumbled 38.6% year‑to‑date, and its forward price‑to‑sales ratio of 7.85× sits well above the 5.81× sector average, suggesting premium valuation expectations. While the consensus EPS forecast for 2026 implies 53% earnings growth, the high multiple and intense competition raise questions about sustainable upside. Analysts will watch whether the company can translate its expanding user base into consistent ad revenue and justify its premium multiple in the coming quarters.