Reddit’s explosive user growth and AI tools help it soar to its first profit as a public company

NEW YORK — Reddit turned a profit for the first time as a public company.

The social platform reported profit of $29.9 million, or 16 cents per share, for the period ended in September and reported sales of $348.4 million, beating analysts’ estimates of $312.8 million. According to Reddit, the number of daily users increased to 97.2 million, a 47% increase over the same period last year. company statement.

In a letter to shareholdersReddit CEO Steve Huffman said its new AI translation feature, which allows readers to convert posts between English, French, Spanish, Portuguese, Italian and German, has been a major driver of user growth, especially internationally in countries such as France, India and the Philippines. . Huffman wrote that by 2025, Reddit plans to expand the feature to more than 30 countries.

“In 2024, ‘Reddit’ was the sixth most searched word on Google in the US, highlighting that when people are looking for answers, advice or community, they turn to Reddit,” Huffman wrote. “We saw this happen in real time when the White House took to Reddit to share critical information during recent hurricanes, reaching people in affected areas with timely updates.”

While the company’s advertising remains its main source of revenue, Reddit’s earnings report states this latest data license agreements are starting to pay off financially. Both Google and OpenAI have signed deals with Reddit to train their AI models on its content.

San Francisco-based Reddit Inc., whose investors include OpenAI CEO Sam Altman, went public in March for $34 a share. Prior to that, it posted earnings in the first quarter of 2021 and the fourth quarter of 2023.

The stock has tripled since its initial public offering, rising 42% to close at $116.05 on Wednesday.

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This story has been updated to correct that Reddit made its first profit after going public, not in its 20-year history.