Reddit Achieves First-Ever Profit, Driven by AI Tools and Explosive User Growth

Reddit's explosive user growth and AI tools help it soar to its first-ever profit

For the first time in its nearly 20-year history, Reddit is turning a profit NEW YORK -- For the first time in its nearly 20-year history, Reddit is turning a profit. The social platform claimed a profit of $29.9 million, or 16 cents per share, for the period ending in September, and reported sales of $348.4 million, an amount surpassing the $312.8 million analysts had projected. Reddit also grew its number of daily users to 97.2 million, a 47% increase from the same time last year, according to a company statement. In a letter to shareholders, Reddit CEO Steve Huffman said its new AI translation feature -- which allows readers to convert posts between English, French, Spanish, Portuguese, Italian and German -- was a primary driver of user growth, especially internationally in countries like France, India and the Philippines. Huffman wrote that Reddit plans to expand this feature to over 30 countries going into 2025. "In 2024 so far, 'Reddit' was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice, or community, they're turning to Reddit," Huffman wrote. "We saw this play out in real-time when the White House came to Reddit to share critical information during recent hurricanes, reaching people in the affected areas with timely updates." While the company's advertising remains its main source of revenue, Reddit's earnings summary notes its recent data licensing agreements are beginning to pay off financially. Both Google and OpenAI have signed deals with Reddit to train their artificial intelligence models on its content. Reddit, whose investors include OpenAI CEO Sam Altman, went public in March at $34 a share. The stock has since tripled, surging 34% to $110.20 in morning trading Wednesday.

Reddit's explosive user growth and AI tools help it soar to its first-ever profit

NEW YORK (AP) -- For the first time in its nearly 20-year history, Reddit is turning a profit. The social platform claimed a profit of $29.9 million, or 16 cents per share, for the period ending in September, and reported sales of $348.4 million, an amount surpassing the $312.8 million analysts had projected. Reddit also grew its number of daily users to 97.2 million, a 47% increase from the same time last year, according to a company statement. In a letter to shareholders, Reddit CEO Steve Huffman said its new AI translation feature -- which allows readers to convert posts between English, French, Spanish, Portuguese, Italian and German -- was a primary driver of user growth, especially internationally in countries like France, India and the Philippines. Huffman wrote that Reddit plans to expand this feature to over 30 countries going into 2025. "In 2024 so far, 'Reddit' was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice, or community, they're turning to Reddit," Huffman wrote. "We saw this play out in real-time when the White House came to Reddit to share critical information during recent hurricanes, reaching people in the affected areas with timely updates." While the company's advertising remains its main source of revenue, Reddit's earnings summary notes its recent data licensing agreements are beginning to pay off financially. Both Google and OpenAI have signed deals with Reddit to train their artificial intelligence models on its content. Reddit, whose investors include OpenAI CEO Sam Altman, went public in March at $34 a share. The stock has since tripled, surging 34% to $110.20 in morning trading Wednesday.

Reddit's Explosive User Growth and AI Tools Help It Soar to Its First-Ever Profit

NEW YORK (AP) -- For the first time in its nearly 20-year history, Reddit is turning a profit. The social platform claimed a profit of $29.9 million, or 16 cents per share, for the period ending in September, and reported sales of $348.4 million, an amount surpassing the $312.8 million analysts had projected. Reddit also grew its number of daily users to 97.2 million, a 47% increase from the same time last year, according to a company statement. In a letter to shareholders, Reddit CEO Steve Huffman said its new AI translation feature -- which allows readers to convert posts between English, French, Spanish, Portuguese, Italian and German -- was a primary driver of user growth, especially internationally in countries like France, India and the Philippines. Huffman wrote that Reddit plans to expand this feature to over 30 countries going into 2025. "In 2024 so far, 'Reddit' was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice, or community, they're turning to Reddit," Huffman wrote. "We saw this play out in real-time when the White House came to Reddit to share critical information during recent hurricanes, reaching people in the affected areas with timely updates." While the company's advertising remains its main source of revenue, Reddit's earnings summary notes its recent data licensing agreements are beginning to pay off financially. Both Google and OpenAI have signed deals with Reddit to train their artificial intelligence models on its content. Reddit, whose investors include OpenAI CEO Sam Altman, went public in March at $34 a share. The stock has since tripled, surging 34% to $110.20 in morning trading Wednesday. Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Reddit's Sees First-Ever Profit as Explosive User Growth and AI Tools Help it Soar

For the first time in its nearly 20-year history, Reddit is turning a profit. The social platform claimed a profit of $29.9 million, or 16 cents per share, for the period ending in September, and reported sales of $348.4 million, an amount surpassing the $312.8 million analysts had projected. Reddit also grew its number of daily users to 97.2 million, a 47 percent increase from the same time last year, according to a company statement. In a letter to shareholders, Reddit CEO Steve Huffman said its new AI translation feature -- which allows readers to convert posts between English, French, Spanish, Portuguese, Italian and German -- was a primary driver of user growth, especially internationally in countries like France, India and the Philippines. Huffman wrote that Reddit plans to expand this feature to over 30 countries going into 2025. "In 2024 so far, 'Reddit' was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice, or community, they're turning to Reddit," Huffman wrote. "We saw this play out in real-time when the White House came to Reddit to share critical information during recent hurricanes, reaching people in the affected areas with timely updates." While the company's advertising remains its main source of revenue, Reddit's earnings summary notes its recent data licensing agreements are beginning to pay off financially. Both Google and OpenAI have signed deals with Reddit to train their artificial intelligence models on its content.

Reddit is profitable for the first time ever, with nearly 100 million daily users

Reddit just turned a profit for the first time. As part of its third-quarter earnings results released on Tuesday, the company reported a profit of $29.9 million, along with $348.4 million in revenue -- a 68 percent increase year over year. The company reportedly hasn't been profitable at any point in its nearly 20-year history. Since going public, Reddit lost $575 million during its first quarter on the market, but it decreased that loss to $10 million last quarter, and is now finally in the green. Reddit also grew to 97.2 million daily users over the past few months, marking a 47 percent increase from the same time last year. That number exceeded 100 million users on some days during the quarter, Reddit says. Reddit's advertising revenue grew to $315.1 million, while "other" revenue reached $33.2 million on account of "data licensing agreements signed earlier this year." Both Google and OpenAI have cut deals with Reddit to train their AI models on its posts. In a letter to shareholders, Reddit CEO Steve Huffman attributed the recent increase in users to the platform's AI-powered translation feature. Reddit started letting users translate posts into French last year before expanding it to Spanish, Portuguese, Italian, and German. Now Huffman says Reddit plans to expand translation to over 30 countries through 2025. "Reddit's influence continues to grow across the broader internet," Huffman wrote. "In 2024 so far, 'Reddit' was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice, or community, they're turning to Reddit." The platform is also working to make its search feature "easier and more intuitive." Since going public earlier this year, Reddit has made a number of changes to generate more revenue, including inking advertising deals with professional sports leagues, upgrading its "ask me anything" posts, and cracking down on web crawlers attempting to scrape its content. Huffman has even weighed the idea of letting users create paid subreddits and even moved to prevent sitewide protests.

Reddit shares soar after company turns first-ever profit

Monthly users rose by nearly half thanks to an AI translation feature, and deals for AI training with Google and OpenAI boosted revenue Reddit on Tuesday reported a quarterly profit for the first time in its 20-year history. Shares of the company, popular for its user-led communities known as subreddits, rose more than 35% as markets opened the next day. The company reported nearly 100m monthly users, an increase of 47% from the year prior, and a profit of $29.9m. Its revenue reached $348.4m, a year-over-year increase of 68%, handily beating analysts' expectations. CEO Steve Huffman said the site's new feature that translates English posts into French, Spanish, Portuguese, Italian and German via artificial intelligence drove the increase in users. Reddit plans to expand the feature to more languages in the coming months, according to Huffman's letter to shareholders. The company forecast current-quarter revenue above Wall Street estimates, helped by its AI content licensing deals and strong digital advertising spending. The company's content licensing deals with Alphabet's Google and Microsoft-backed OpenAI for training their AI models have also been boosting its revenue, analysts have said. The social media platform also has deals with sports leagues such as the National Basketball Association (NBA), which are helping the company to bring more sports content on the platform and attract ad dollars. "Reddit's AI partnerships with Google and OpenAI are a huge bonus right now, and while they contributed a good deal to this quarter's revenue, they're like training wheels on a bike - good for stability, but they won't fuel long-term growth," said Jeremy Goldman, senior director of briefings at Emarketer.

Reddit shares soar 25% as it turns its first profit

Reddit, the social media platform known for its devoted online communities and raucous debates, surprised Wall Street by turning a profit for the first time just months after going public, sending shares up 25 per cent to a record high. On a call with analysts, Reddit's executives said that investments in its ad tech, designed to improve the performance of ads, were bearing fruit, as was its move to use "machine translation" to automatically translate its content into languages to boost its audience. It now has nearly 100mn daily active users, up 47 per cent year-on-year in the quarter. Net income for the company, which floated on the New York Stock Exchange in March, was $29.9mn in the third quarter, up from a net loss of $7.4mn in the same period last year, and well above Wall Street estimates of $10mn in losses. "Continuing to look to 2025 and beyond, we'll seek opportunities to accelerate our road map, whether through new product development, global expansion or growing our ads business," Steve Huffman, Reddit chief executive said, "all while maintaining our commitment to scaling profitably and ensuring that Reddit is to be the go to place for conversations and community on the internet." Reddit's third-quarter revenues were up 68 per cent to $348.4mn, compared to Wall Street consensus of a rise to $314.8mn. It also forecast revenues for the current quarter of between $385mn and $400mn, above Wall Street's forecasts. Huffman said the company would invest in modernising its search capabilities, including developing "beautiful results pages" and integrating large language models into its results data. Huffman also said that the company was looking to support businesses, brands and creators having an official presence on Reddit, marking a new direction for a platform that was once known to host edgy, anonymous conversations and take a more hands-off approach to moderation. The White House now has an official account with its new Reddit Pro business offering, he added, and had used this to share critical information with local communities during the recent hurricanes in the US. However, Huffman appeared more cautious when talking about the licensing deals -- to sell its data to tech and AI companies to train their models -- that it had been touting ahead of its listing. In particular, the company had generated enthusiasm by citing this as a potential revenue driver when it struck deals with Google and, later, OpenAI. However on Tuesday, Huffman said that while the company was still in conversation about future deals, these were "limited" in number and mainly with smaller players. "The story here is Reddit data is extremely valuable for a lot of players on the market," Huffman said. "So we're open for business and finding the right balance between making this information accessible and building our own products on top of it."

Reddit's AI Licensing Deals Help it Notch First-Ever Profitable Quarter

Social media company Reddit posted its first profit as a public company in the third quarter, along with much higher revenue and adjusted earnings before interest, taxes, depreciation and amortization than executives had projected. Shares soared more than 20% in after-hours trading. The company reported net income of $29.9 million on revenue of $348.4 million, marking its first profitable

Reddit stock price soars after social media player reports profit milestone

Reddit's stock price is surging after the social media player notched its first profit in the company's nearly 20-year history. Reddit on Tuesday reported net income of nearly $30 million for the third quarter, while its revenue of $348.4 million for the period topped analyst forecasts. Those figures were up from a loss of $7.4 million on sales of $207.5 million a year ago. Showing impressive customer growth, the business now has more than 97 million daily users, up 47% from a year ago. A key factor behind Reddit's fast growth of late is artificial intelligence. In a letter to shareholders, Reddit co-founder and CEO Steve Huffman said a new AI-powered service that lets people translate posts between English, French, Spanish, Portuguese, Italian and German quadrupled its number of users. Reddit plans to roll out the feature to more than 30 countries over the course of 2025, he added. "In 2024 so far, 'Reddit' was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice or community, they're turning to Reddit," Huffman wrote. "We saw this play out in real time when the White House came to Reddit to share critical information during recent hurricanes, reaching people in the affected areas with timely updates." Reddit was launched by Huffman, Alexis Ohanian and Aaron Swartz in 2005, only some 16 months after Mark Zuckerberg launched Facebook. But Reddit didn't go public until earlier this year and had never turned a profit, piling up hundreds of millions in losses even as its audience steadily grew. Reddit's stock, which in March debuted on the New York Stock Exchange at $34 a share under the ticker symbol "RDDT," have since more than tripled in value and traded Wednesday afternoon at $113.50, up 39% on the day. Today, the company's main source of revenue remains advertising, although it now also brings in money through financial agreements with companies like Google and OpenAI that train their generative-AI tools on Reddit's content. "Looking ahead, including the search experience on Reddit is a key part of our strategy," Huffman said Tuesday in a call with Wall Street analysts. "We want to ensure that all users have the best experience possible. This includes users coming to Reddit from external search and those searching directly on Reddit who are looking for recommendations on what to buy, what to watch, or what products or services are the best."

Reddit reports first profitable quarter in 19-year history

After 19 years of losses, all it took was a machine translation of its posts to get out of the red After months of uncertainty, it looks like going public was a good thing for Reddit's bottom line, as the online forum just posted a profit for the first time in its 19-year history. This isn't some barely-in-the-green "profit" either - Reddit made a net income of $29.9 million in its third quarter as a publicly-traded firm, which ended September 30, on revenues of $348.4 million - a 68 percent year-over-year increase. Compare that to the previous two quarters, in which Reddit lost $10.1 million and $575.1 million, and it's hard to see Q3 as anything but the outfit finally coming into its own after an IPO many users objected to. "Q3 was a landmark quarter for Reddit," said co-founder and CEO Steve Huffman in the quarterly report [PDF] to shareholders. "We averaged over 97 million daily active uniques, an increase of 47% from last year, and for the first time, we exceeded 100 million a few times during the quarter, which has been a longstanding milestone for us." It's fair to wonder what the hell just happened to swing Reddit into the green for the first time in its history, but Huffman has a ready answer: Artificial intelligence. "This year, we started using AI to translate Reddit's corpus into other languages, making it more accessible for non-English speakers to enjoy in their native languages," Huffman said. "This quarter, machine translation drove four times more users than last quarter, and based on the success we've seen so far, we plan to expand machine translation to over 30 countries through 2025." Machine translation is currently translating English-language posts into French, Spanish, Portuguese, Italian, and German. Reddit had been very vocal about a pair of deals it signed with Google and OpenAI earlier this year, granting both companies access to its Data API, while Reddit leverages their products for its own uses. It wasn't clear at the time what Reddit intended to do with these AI tools, but it appears translating posts to extend the site's reach was at the top of the list. Reddit's outlook is predicting further profit in the fourth quarter, with revenues predicted to grow to as much as $400 million, and EBITDA as high as $125 million. That said, Reddit will likely have to show its users, who can be a contentious bunch, that it'll make good use of those profits to improve the platform. Huffman said that enhancing the search experience on the site, an oft-requested improvement, is a key part of Reddit's strategy for the near future. That includes improving external searches that drive users to Reddit, something the company said it hoped to do with all that new AI, but that hasn't materialized yet. "As we look to 2025 and beyond, we'll seek opportunities to accelerate our roadmap, whether through new product developments, global expansion, or growing our ads business," Huffman said, without giving much in the way of specifics. We've reached out to the company to learn more about its plans for all that profit, but haven't heard back. ®

Reddit's getting more popular -- and profitable

In May 2023, Reddit announced that its API would no longer be free, signaling the demise of most third-party Reddit apps and the start of a new Reddit era. Reddit was always interested in making money, but the social media platform's drive to reach profitability intensified with its API rule changes, which was followed by it going public and other big moves. With Reddit reporting this week that it has finally turned its first profit, we can expect further evolution from Reddit, whether old-time Redditors like it or not. In its fiscal Q4 2024 results announced on Tuesday [PDF], Reddit said that in the quarter ending on September 30, it made a profit of $29.9 million. This is significant growth from fiscal Q3 2024, when Reddit lost $7.4 million. Revenue, meanwhile, was up 68 percent year over year, going from $207.5 million to $384.4 million. Reddit is expecting $385 to $400 million in revenue for fiscal Q4. During the Reddit app-ocalypse, many Reddit users and moderators said that they would quit the platform because they were disgusted with how Reddit treated third-party developers and moderators, particularly during user protests against the API rule changes. Still, Reddit's results show it averaging 47 percent more daily active unique users in Q3 2024 (97.2 million) than it did in Q3 2023 (66 million). Reddit CEO Steve Huffman told shareholders [PDF] that "machine translation drove 4x incremental" daily active unique users in Q3 compared to Q2. Huffman's letter says that Reddit plans to launch machine translation in more countries in Q4 and in 2025. "Large-language model ... driven machine translation is showing early traction in breaking the language barrier and driving millions of incremental users to the platform," Huffman said. Of course, more users give ads sold on Reddit the chance to gain more eyeballs, something that can help drive ad sales. Reddit's ad revenue has grown alongside its daily user base. In Q3 2024, Reddit made $315.1 million in ad revenue, a 56 percent year-over-year increase. Reddit has historically made the majority of its revenue from ad sales. Huffman has long claimed that Reddit started charging for its API in order to prevent big companies, like Google, from using Reddit content for free AI training. However, the high pricing killing third-party apps also fed Reddit's goals of getting users onto its native website and apps -- where Reddit sells ads.