Impact of DAU vs. WAU
Hi all,
I see a lot of analyst notes and comments here stating their concerns on low US DAU growth. While US DAU is undoubtedly one of the most important metrics due to the high ARPU US users provide, I wanted to address the fact that WAU also needs to be taken into consideration in order to measure how valuable Reddit is to the advertisers.
Reddit's US DAU and WAU currently sits at 53.5mn and 196.5mn respectively. The reason DAU is so important is because from the advertisers' perspectives, DAU's visit the site more often and hence view the ads more often and have higher chance of conversion as they are exposed to more ads as they consume more content. But WAU's obviously also have the exposure to the ads; what's important is ultimately how many times ads are exposed to the users.
To break this down, we need to distribute the number of users who visit once per week, twice per week, three times per week, and so on for full 7 days. We already know 53.5mn out of 196.5mn visits 7 times a week (27.2% of WAU are DAU). We also know from a previous interview that apart from the DAU's, users who visit once per week have the highest proportion. So if we assume the same proportion of people visit once per week as those who visit everyday, and distribute the rest of the users evenly among other number of days (for the sake of simple assumption), we get something like below.
Visit frequency is simply the days visit per week divided by 7. We multiply that by number of users for each days, and add them up to get total visit frequency x users of 112.3mn.
Now, this obviously is a very rough assumption given that there are variables such as difference in chance of conversion among the users with different number of visits per week, heavier skew towards 1 day or 2 days of visits per week vs. 6 or 7 days of visits per week, and of course the actual frequency of visits, especially for DAU's, maybe more than just 1 per day (like myself).
However, assuming the assumed high-level stats don't differ significantly with peers like Facebook who has US DAU of 200mn and WAU of 210~220mn, we can see that 112.3mn is a huge number of eyeballs viewing ads for advertisers.
Additionally, if you study across different ad platforms, there is not a very high correlation between number of users and ARPU. ARPU is impacted more heavily by the quality of ad algorithms and number of advertisers on board bidding for the ad space; higher users would of course attract more advertisers, but that is just one side of the equation.
Also, I've stated this many, many times - but US WAU maxes out at 210-220mn. We can see this from WAU of Youtube and Facebook. So in terms of WAU, Reddit has already almost reached saturation.
Taking the above factors into consideration, couple of factors can be presumed:
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We still have so much ARPU room to grow (for US, about $10 per quarter for Reddit vs $80 for Facebook and $70 for Google) considering the size of the Reddit users., and
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Yes, DAU/MAU conversion is critical to further grow US DAU from here, BUT even at current levels, Reddit can very easily become $100bn+ platform; further & faster US DAU growth would be indicating that Reddit has potential to grow to become a 'big-tech' company level, beyond $100-$200bn scale.
Again, I'm not here to state the DAU growth isn't important - but I just wanted to clarify that DAU number alone doesn't show the full picture of how big Reddit is as an ad platform, and considering the WAU together, ARPU growth alone is enough to get to where more of us are expecting this company to be in the future, and that the US DAU growth concern is simply overdone for a company at ~$30bn market cap.
Posted Jun 2, 2026, 1:05 PM UTC