Reddit has reported its first profit as a public entity, with a $29.9 million profit, equating to 16 cents per share, for the period ending in September. This figure exceeded the projected sales of $312.8 million by analysts, with actual sales reaching $348.4 million.
The social platform also witnessed a significant surge in its daily user base, growing to 97.2 million, marking a 47% increase from the same period in the previous year. According to a company statement, this growth can be attributed to the new AI translation feature, which facilitates post conversion between English, French, Spanish, Portuguese, Italian, and German. This feature has been particularly impactful in international markets such as France, India, and the Philippines.
In a letter to shareholders, Reddit CEO Steve Huffman highlighted the AI translation feature as a key driver of user growth, with plans to extend this service to over 30 countries by 2025. He also noted that ‘Reddit’ was the sixth most Googled word in the U.S. in 2024, indicating that people are increasingly turning to Reddit for answers, advice, or community. This was evident when the White House used Reddit to disseminate critical information during recent hurricanes, ensuring timely updates reached affected areas.
While advertising remains Reddit’s primary revenue stream, the company’s earnings summary indicates that recent data licensing agreements are also yielding financial benefits. Google and OpenAI have both entered into agreements with Reddit to use its content for training their AI models.
Reddit Inc., based in San Francisco and backed by investors including OpenAI CEO Sam Altman, went public in March at $34 a share. It achieved profits in the first quarter of 2021 and the fourth quarter of 2023. Since its initial public offering, the stock price has tripled, increasing by 42% to close at $116.05 on Wednesday.