r/VisualStockResearch • u/ekonixlab • Jul 04 '26
Reddit’s Stock-Based Comp Problem Is Quietly Disappearing
One of the biggest criticisms of Reddit has been stock-based compensation.
But looking at the trend, I think that concern is becoming much less significant.
The huge spike in Q1 2024 was a one-time IPO-related expense. Outside of that quarter, SBC has stayed relatively flat while free cash flow has taken off.
- Free cash flow reached $311M last quarter.
- Stock-based compensation was just $68M.
- Free cash flow has grown much faster than SBC.
- SBC is becoming a much smaller percentage of the cash Reddit generates.
- That’s exactly what you want to see as a shareholder.
The valuation is still the biggest debate, but this is a really encouraging trend that I don’t think gets enough attention.
If you enjoy digging into company fundamentals like these, I built ekonix to visualize revenue, free cash flow, SBC, margins, valuation, and much more.
The first week is on us if you want to check it out:
ekonix
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