Share count
202Mpeak FY2025
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RDDT, Reddit Inc.
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The business
What it sells, where the money comes from, the kind of company it is.
Revenue · FY2025
$2.2B
+69.4% YoY · 49% 3-yr CAGR
Vital signs · TTM, with 4-yr average
Revenue $2.5B 4-yr avg $1.2B
Revenue $663M +69.1% vs yr-ago qtr
Operating margin 27.6% yr-ago 1.0%
Net income $204M yr-ago $26M
Net margin 30.7% yr-ago 6.7%
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Net current asset value. Current assets alone exceed every liability combined, and the surplus is most of the balance sheet: the shape Graham called a net-net.
- What moves the needle
- Operating margin has reached 20% at its best but run negative through the cycle (median −26%) on a 86% gross margin — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. The cash cycle has run negative through the cycle (a median of −36 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
Where the money comes from
read the 10-K →19% of revenue comes from outside the United States.
Revenue by geography, FY2025
- United States81%$1.8B
- International19%$417M
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record
Ten years of arithmetic, read across the cycle.
The record, 2022–2025
realized figures from each filing · older years to the left| 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|
| Income statement | |||||
| $667M | $804M | $1.3B | $2.2B | $2.5B | RevenueRevenue |
| 84% | 86% | 90% | 91% | 91% | Gross marginGross mgn |
| 22% | 20% | 35% | 13% | 11% | SG&A / revenueSG&A/rev |
| 55% | 55% | 72% | 36% | 32% | R&D / revenueR&D/rev |
| ($172M) | ($140M) | ($561M) | $442M | $621M | Operating incomeOp. inc. |
| −25.8% | −17.4% | −43.1% | 20.1% | 25.1% | Operating marginOp. mgn |
| ($159M) | ($91M) | ($484M) | $530M | $708M | Net incomeNet inc. |
| — | — | — | -0% | 0% | Effective tax rateTax rate |
| Cash flow & returns | |||||
| ($94M) | ($75M) | $222M | $691M | $876M | Operating cash flowOp. cash |
| $8M | $14M | $16M | $16M | $16M | DepreciationDeprec. |
| $1M | ($46M) | ($111M) | ($198M) | ($174M) | Working capital & otherWC & other |
| $6M | $10M | $6M | $7M | $7M | CapexCapex |
| 0.9% | 1.2% | 0.5% | 0.3% | 0.3% | Capex / revenueCapex/rev |
| ($100M) | ($85M) | $216M | $684M | $869M | Owner earningsOwner earn. |
| −15.0% | −10.6% | 16.6% | 31.1% | 35.1% | Owner earnings marginOE mgn |
| ($100M) | ($85M) | $216M | $684M | $869M | Free cash flowFCF |
| −15.0% | −10.6% | 16.6% | 31.1% | 35.1% | Free cash flow marginFCF mgn |
| $42M | $0 | $17M | $0 | $0 | AcquisitionsAcquis. |
| — | — | -28% | 22% | 34% | ROICROIC |
| — | — | -23% | 18% | 22% | Return on equityROE |
| — | — | −23% | 18% | 22% | Retained to equityRetained/eq |
| Balance sheet | |||||
| $436M | $401M | $562M | $954M | $1.4B | Cash & investmentsCash+inv |
| — | $245M | $350M | $590M | $523M | ReceivablesReceiv. |
| — | $47M | $45M | $63M | $52M | Accounts payablePayables |
| — | $199M | $304M | $527M | $471M | Operating working capitalOper. WC |
| — | $1.5B | $2.2B | $3.1B | $3.4B | Current assetsCur. assets |
| — | $134M | $176M | $271M | $266M | Current liabilitiesCur. liab. |
| — | 11.1× | 12.6× | 11.6× | 12.7× | Current ratioCurr. ratio |
| — | $26M | $42M | $42M | $42M | GoodwillGoodwill |
| — | $1.6B | $2.3B | $3.2B | $3.5B | Total assetsAssets |
| ($436M) | ($401M) | ($562M) | ($954M) | ($1.4B) | Net debt / (cash)Net debt |
| ($379M) | ($413M) | $2.1B | $2.9B | $3.2B | Shareholders’ equityEquity |
| 8.3% | 5.9% | 61.7% | 15.6% | 13.2% | Stock comp / revenueSBC/rev |
| Per share | |||||
| 57.3M | 59.1M | 145M | 202M | 203M | Shares out (diluted)Shares |
| $11.65 | $13.60 | $8.94 | $10.90 | $12.21 | Revenue / shareRev/sh |
| $-2.77 | $-1.54 | $-3.33 | $2.62 | $3.49 | EPS (diluted)EPS |
| $-1.75 | $-1.43 | $1.48 | $3.39 | $4.29 | Owner earnings / shareOE/sh |
| $-1.75 | $-1.43 | $1.48 | $3.39 | $4.29 | Free cash flow / shareFCF/sh |
| $0.11 | $0.16 | $0.04 | $0.03 | $0.03 | Cap. spending / shareCapex/sh |
| $-6.62 | $-6.98 | $14.65 | $14.49 | $15.70 | Book value / shareBVPS |
The diluted share count moved ×2.46 into 2024 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
Per-share growththe realized rate an owner's share compounded
| 3-yr | 5-yr | |
|---|---|---|
| Revenue / share | −2.2%/yr | −2.2%/yr (3-yr) |
| Capital spending / share | −32.7%/yr | −32.7%/yr (3-yr) |
The record, charted
FY2022–2025Each measure over its full record; the current point and the worst year marked.
Gross margin
91%low FY2022
Owner earnings vs. net income
Owner earningsNet incomeThe accountant's number, and the cash an owner can take; the gap is the tell.
$684Mowner earningsvs.$530Mnet incomelow FY2022
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2025 the business turned $530M of profit into $684M of owner earnings: more cash than the profit line showed, after the non-cash charges and the capital it put back in.
| FY2025 | FY2024 | FY2023 | FY2022 | |
|---|---|---|---|---|
| Reported net income | $530M | ($484M) | ($91M) | ($159M) |
| Depreciation & amortizationnon-cash charge added back | +$16M | +$16M | +$14M | +$8M |
| Stock-based compensationreal costnon-cash, but a real cost | +$343M | +$802M | +$48M | +$55M |
| Working capital & othertiming of cash in and out, other non-cash items | −$198M | −$111M | −$46M | +$1M |
| Cash from operations | $691M | $222M | ($75M) | ($94M) |
| Capital expenditurecash put back in to keep running and to grow | −$7M | −$6M | −$10M | −$6M |
| Owner earnings | $684M | $216M | ($85M) | ($100M) |
| Owner-earnings marginowner earnings ÷ revenue | 31% | 17% | -11% | -15% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $343M), owner earnings is nearer $341M.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
FY2025 10-K · source on SEC EDGAR →
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- Net cash, debt-freeCash $954M − debt $0
What this means
Cash and short-term investments exceed every dollar of debt by $954M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Negative, funded by othersDSO 98 + DIO 0 − DPO 118 days
What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)
Is it a good business?
- Not enough dataIndustry peers: median 3%
What this means
The filing data didn't include the inputs for this check.
- Positive this year, negative across the cyclelatest $684M = operating cash $691M − maintenance capex $7M (positive this year), after an earlier loss stretch (4-yr median -11%)Industry peers: median 12%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 31% of revenue this year, a -11% median across 4 years. Treating stock comp as the real expense it is (less $343M of SBC) leaves $341M.
- Cash-backedCash from ops $691M ÷ net income $530M
In the filing’s words The filing leans on adjusted, non-GAAP earnings, but the GAAP profit is itself cash-backed — the adjustments are not papering over a cash shortfall here.
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Not enough data
What this means
The filing data didn't include the inputs for this check.
- Investing or harvesting? 0.42×HarvestingCapex $7M ÷ depreciation $16M
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 2 of 2 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size PassRevenue ≥ $2B · $2.2B
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 11.56×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $-0.08/share (latest year $2.77), the averaged base the calculator's gate runs on, and book value is $15.29/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2022–2025
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 1 of 4
What this means
Lost money in 3 year(s), look at what happened there before trusting the average.
- Operating margin −22% → −12% (2-yr avg ends)
What this means
Through the cycle the operating margin widened — about −22% early to −12% lately, median −26% — pricing power intact or improving.
- Worst year 2024 · −43.1% op. margin
What this means
Operations went underwater in 2024, understand why before trusting the good years.
- How management talks about it Owner’s terms
What this means
The record and the register agree: capital is compounding and the filing reasons in an owner’s terms — per-share value, return on capital, the long term — not a promoter’s.
Does AI threaten the moat?
Elevated contestabilityThe product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.
In its own filing A competitive risk, new this year
Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.
“While we have made, and expect to continue to make, significant investments to integrate AI, including generative AI, into our platform, AI technologies are rapidly evolving and there can be no guarantee that our products and services will remain competitive as new AI technologies are developed, adopted, and integrated…”
AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of the latest quarter, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
Current assets$3.4B
- Cash & short-term investments$1.4B
- Receivables$523M
- Other current assets$1.5B
Current liabilities$266M
- Accounts payable$52M
- Other current liabilities$214M
Current ratio12.73×all current assets ÷ what's due · Graham looked for 2×
Quick ratio12.73×stricter: inventory excluded
Cash ratio5.17×strictest: cash alone against what's due
Working capital$3.1Bthe cushion left after near-term bills
Revenue, latest quarter vs. a year ago+69.1%the freshest read on whether the business is still growing
Current ratio, recent quarters12.4× → 12.7×
Deeper floors
Tangible book value$3.1Bequity stripped of goodwill & intangibles
Net current asset value$3.1BGraham's net-net: current assets less all liabilities
Debt incl. operating leases$21M$21M of it operating leases
Deferred revenue$28Mcustomer cash collected before delivery; operating float
From the company's latest filing.
How the cash was used, 2022–2025
Over the record, the business generated $744M of operating cash; how management split it reads as a cash builder, a large share of cash simply built up on the balance sheet.
- Reinvested$29M · 4%
- Retained (debt / cash)$715M · 96%
- Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span cash and short-term investments rose $939M.
- Net change in share count253.7%
The diluted count rose from 57M to 203M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
- Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid.
- Insider ownership5%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
- Stock-based compensation$343M
The slice of the business handed to employees in shares this year, 16% of revenue, equal to 78% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Revenue recognition as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, IT Services & Consulting
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| VRSKVerisk Analytics Inc. | $3.1B | 65% | 40.3% | 14% | 32% |
| PLTKPlaytika Holding Corp. | $2.8B | 72% | 18.8% | 34% | 19% |
| RNGRingCentral Inc. | $2.5B | 72% | -4.2% | -11% | 7% |
| CLVTClarivate Plc | $2.5B | 66% | -10.8% | -2% | 12% |
| RDDTReddit Inc. | $2.2B | 88% | -21.6% | 22% | 3% |
| PEGAPegasystems | $1.7B | 71% | 1.9% | 3% | 7% |
| FAFirst Advantage Corporation | $1.6B | — | 9.8% | 4% | 17% |
| FIVNFive9 | $1.1B | 57% | -3.4% | -5% | 9% |
| Group median | — | 71% | -0.8% | 4% | 11% |
The price
What a price has to assume.
What the price implies
reverse-DCFType today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Reddit Inc. has delivered.
Reddit Inc.’s latest year runs above its own through-cycle margin — the reported figure may flatter a peak. So the tool opens on the through-cycle base, Graham’s averaging cutting both ways; clear the toggle below to read the latest year exactly as reported.
$
Through the cycle, Reddit Inc. earns about $67M on its 3.0% median owner-earnings margin. This year’s 31.1% margin runs above that; the reported figure may flatter a peak you'd be paying on. Normalize, below, values the price on that through-cycle figure rather than the latest year. It comes pre-checked here for that reason, the same rule that already normalizes a trough; clear it to price the year as filed.
Base
—
The assumptions
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Implied by the price—
Owner-earnings growth · since FY2024+217%/yr
Owner-earnings growth · since FY2024+217%/yr
Owner-earnings yield—
What a growth belief costs, in multiples
The growth each return requires, at your price
P/E (3-yr earnings ’23–’25)—
P/B—
Graham’s price gate—
Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.
Against a high-grade bond: Graham’s yardstick bond yield%
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Owner-earnings yield—
High-grade bond yield—
Margin over the bond—
Owner earnings $869M on 192M shares outstanding (a weighted basic average, the only count this filer tags); net cash $1.4B. The if-converted diluted count is 203M, 6% above the shares outstanding: the dilution overhang (convertibles, options) a buyer inherits. The base opens on the through-cycle figure (the latest year sits above the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
Cite: Owner Scorecard, "Reddit Inc. (RDDT), the owner's record," https://ownerscorecard.com/c/RDDT, data as of 2026-07-09.
Manual order: ← RCUS its page in the Manual RDN →
Industry order: ← RAMP the IT Services & Consulting chapter RGTI →