Investing.com -- Reddit posted a stronger-than-expected fourth quarter and issued upbeat guidance, thanks to ad business as Ai tools draw more marketers to the platform. Reddit also announced its first share repurchase programme of up to $1 billion.

The company reported adjusted earnings of $1.24 a share, beating analysts’ estimates of $0.93. Revenue jumped 70% year over year to $726 million, above expectations of about $667 million, driven by robust advertiser demand and rising user engagement.

Reddit forecast first-quarter 2026 revenue of $595 million to $605 million, topping Wall Street estimates of roughly $577 million. It also projected adjusted EBITDA of $210 million to $220 million, ahead of consensus forecasts, pointing to improving profitability alongside strong top-line growth.

Reddit allows ads to be placed directly within subreddit discussion threads, enabling brands to reach highly engaged and niche communities.

The company has rolled out tools such as an AI copywriter that generates Reddit-specific ad copy and automated image formatting, making campaign creation easier for advertisers.

Reddit is also stepping up competition with larger rivals including Meta Platforms by testing AI-driven “Max” campaigns that automatically adjust bids to meet targeted cost-per-result goals while dynamically selecting creatives and headlines.

User metrics remained strong. Daily active unique visitors rose 19% to 121.4 million in the quarter, while global average revenue per user increased 42%, reflecting improved monetisation across markets.