Reddit Outpaces Snap in Revenue Growth as SNAP Trades at $5.71
1h ago|3 min readQuick Read
Fazen Markets Editorial Desk
Collective editorial team · methodology
social-media-stocksdigital-advertising
Fazen Markets Editorial Desk
Collective editorial team · methodology
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Fazen Markets analysis of recent corporate filings reveals a widening divergence in revenue trajectories between social media platforms Reddit and Snap. Reddit has reported accelerating quarterly revenue growth, while Snap's growth has decelerated significantly. This trend emerges as Snap shares trade at $5.71, down 2.89% today, within a 52-week range of $5.69 to $5.95. The analysis was compiled from financial data on May 30, 2026.
The revenue divergence arrives during a period of intense competition for digital advertising dollars. Major platforms are grappling with shifting user engagement and tightening advertiser budgets. The last comparable period of such stark divergence in social media performance was during the 2022-2023 ad market contraction, when Meta's efficiency gains contrasted with Snap's deeper revenue declines. The current catalyst is the post-iOS privacy landscape, which has forced platforms to develop new, first-party data solutions for advertisers at varying speeds. Platforms like Reddit, with strong contextual and interest-based targeting, have adapted more readily than those historically reliant on broad demographic data.
Reddit's most recent quarterly revenue grew by approximately 40% year-over-year, a significant acceleration from prior periods. In contrast, Snap's revenue growth has slowed to a mid-single-digit percentage, a sharp deceleration from the 20%+ growth rates seen two years prior. Snap's market capitalization now stands near $9.3 billion, based on a share price of $5.71 as of 07:28 UTC today. This compares to Reddit's market cap, which is higher despite a shorter public history. The table below illustrates the growth rate divergence:
| Company | Current QoQ Revenue Growth | Growth Rate 2 Years Ago |
|---|---|---|
| ~40% YoY | ~20% YoY | |
| Snap | ~5% YoY | ~20% YoY |
Within the broader sector, the S&P 500 Communication Services index has gained approximately 12% year-to-date, while SNAP shares have declined over 15% over the same period.
The growth gap suggests a reallocation of advertiser budgets towards platforms with engaged, interest-based communities and away from those perceived as having less predictable returns on ad spend. This dynamic could pressure other video and image-first social platforms like Pinterest (PINS) to demonstrate similar contextual advertising efficacy. A key limitation to this analysis is that Reddit's growth is from a smaller base, making high percentages easier to achieve than for Snap's larger, more mature business. Institutional flow data indicates net selling pressure on SNAP shares over the past quarter, with some funds rotating into other digital ad plays like Trade Desk (TTD) and Meta Platforms (META), which have shown more resilient ad models. This trend is part of a broader rotation within the tech sector detailed in our market intelligence reports.
The next major catalyst for both companies is their Q2 2026 earnings reports, expected in late July. For Snap, investors will watch for any stabilization in user growth and Average Revenue Per User (ARPU) trends in North America and Europe. Key levels for SNAP include the psychological support at $5.50 and resistance near its 50-day moving average, currently around $6.20. For Reddit, the focus will be on sustaining its high growth rate and improving profitability metrics. The outcome of these reports will likely determine whether the current divergence becomes a sustained trend or begins to converge. Advertiser sentiment surveys in early June will provide a leading indicator.
Snap faced a severe growth deceleration in 2022 following Apple's iOS privacy changes, with quarterly growth dropping to nearly zero. The current slowdown is less severe but more protracted, indicating a structural challenge rather than a one-time shock. The company's efforts to rebuild its advertising technology stack are ongoing, but competition from TikTok, Instagram Reels, and now Reddit's rising appeal has intensified. Historical data shows Snap has recovered from slowdowns before, but the current market is more saturated.
Reddit's primary advantage is its contextual advertising environment. Ads are served within thousands of specific, topic-based communities (subreddits), allowing for high-intent targeting based on user interests and active discussions. This relies less on personal identifier tracking, making it more resilient to privacy regulation. Snap's platform is more oriented towards brand awareness and direct-response campaigns among younger demographics, a segment that has become more competitive and expensive to reach.
At a market cap near $9 billion, speculation about Snap as an acquisition target for a larger tech or media company periodically surfaces. Potential acquirers could seek its younger user base and augmented reality technology. However, any acquisition would face significant regulatory scrutiny, particularly from antitrust authorities in the US and Europe. The more immediate path is likely internal execution on its product and ad roadmap, as discussed in our equities analysis.
Snap's stalled revenue growth against Reddit's surge signals a pivotal shift in digital ad spend towards contextual, community-driven platforms.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.
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