Reddit Shares Rise 7% as Piper Sandler Reports August User Growth Accelerated

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Reddit shares rose about 7% on Thursday, snapping a four-session losing streak, after Piper Sandler said the social-media platform's average users grew 8% month over month in August, the strongest monthly increase this year. Piper said the gain followed a 2% decline in July, with growth in Reddit's Feed audience more than offsetting a decline in Conversation users, and total audience growth accelerated to 18% year over year in August from 12.8% in July based on the brokerage's analysis of Reddit Ads Manager data. International users grew 29.3% in August, accelerating from 19% in July, while U.S. users increased 5.2%, and Piper noted weekly user momentum has been strong since early July, driven largely by the International Feed. Piper cautioned that changes to Reddit's Ads Manager forecasting model are expected to reduce September audience-size estimates by about 20%, a one-time reset reflecting methodology changes that does not indicate deterioration in underlying user trends and affects forecasting rather than auctions, optimization, or ad delivery. The brokerage also said August ad spending across its digital advertising dataset was 60 basis points above expectations, with the biggest beats from Netflix, Roku, YouTube, and Pinterest, while its estimate for third-quarter spending growth rose 30 basis points and Reddit's own third-quarter ad-spending growth estimate was raised 30 basis points.

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Piper Sandler reported Reddit's average users grew 8% month over month in August, the strongest monthly increase this year, with total audience growth accelerating to 18% year over year.