NEW YORK — In a significant milestone, Reddit has posted a profit for the first time in its almost 20-year existence.
The platform reported a profit of $29.9 million, translating to 16 cents per share, for the period that ended in September, alongside revenues of $348.4 million, exceeding analysts’ expectations of $312.8 million. Additionally, Reddit saw an increase in its daily active users, reaching 97.2 million, reflecting a remarkable 47% rise compared to the same period last year, as indicated in a recent company announcement.
In a message directed to shareholders, Reddit’s CEO Steve Huffman emphasized that the introduction of a new AI-powered translation feature has been a significant contributor to this surge in user numbers, particularly in international markets such as France, India, and the Philippines. This feature facilitates translations of posts across several languages, including English, Spanish, French, Portuguese, Italian, and German, with plans to broaden its reach to more than 30 nations by 2025.
Huffman pointed out that in 2024, “Reddit” emerged as the sixth most searched term on Google in the United States, highlighting how users are increasingly relying on the platform for answers, community support, and advice. He noted a practical example of this when the White House utilized Reddit to disseminate essential information during recent hurricanes, effectively communicating updates to individuals in affected areas.
While advertising continues to be the mainstay of Reddit’s revenue stream, the company’s earnings report suggests that recent data licensing arrangements have started to yield substantial financial returns. Both Google and OpenAI have entered into agreements with Reddit to utilize its content for training their artificial intelligence systems.
Having gone public in March at an initial share price of $34, Reddit’s stock has experienced impressive growth, tripling in value and reaching $110.20 during morning trading on Wednesday, following a 34% increase.