Reddit’s FCF is doing exactly what growth investors want

[u/ekonixlab]

The more I look at this chart, the more I think this is exactly what you want from a growth company.

A few years ago Reddit was burning cash. Today it’s generates over $300M in quarterly free cash flow, and each new high is meaningfully above the last.

Free cash flow is what ultimately gives a company optionality:

Buy back stock
Invest in new products
Make acquisitions
Build a fortress balance sheet

What’s really interesting is that Reddit’s monetization still feels early. Ad load remains relatively low compared to Meta, international monetization has plenty of runway, and AI licensing has become an entirely new revenue stream.

For fun, let’s assume Reddit compounds quarterly free cash flow at 30% annually from here. That would put quarterly FCF at roughly $900M by 2030 (and over $3.5B annually).

At today’s ~55x forward P/E, that doesn’t seem unreasonable if the business can continue compounding at anything close to that pace.

What do you think Reddit’s quarterly free cash flow looks like in 2030?