Reddit, the social platform, has announced its first-ever profit as a public company. For the period ending in September, Reddit claimed a profit of $29.9 million, equating to 16 cents per share. Additionally, the company reported sales of $348.4 million, which exceeded the projected $312.8 million by analysts.
User growth has been significant for Reddit, with the number of daily users increasing to 97.2 million, marking a 47% rise from the same period last year, as per a company statement.
In a letter to shareholders, Reddit CEO Steve Huffman highlighted the company’s new AI translation feature as a key contributor to this growth. This feature enables users to translate posts between English, French, Spanish, Portuguese, Italian, and German, particularly boosting international user engagement in countries such as France, India, and the Philippines.
Huffman also revealed plans to expand this AI translation feature to over 30 countries by 2025, indicating a strategic move to further enhance Reddit’s global reach and user base.
In 2024 so far, ‘Reddit’ was the sixth most Googled word in the U.S. This shows that when people seek answers, advice, or community, they turn to Reddit. As 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 advertising is still Reddit’s main source of revenue, its earnings summary indicates that recent data licensing agreements are starting to bring financial returns. Both Google and OpenAI have signed deals with Reddit to train their artificial intelligence models on its content. San Francisco-based Reddit Inc., with investors including OpenAI CEO Sam Altman, went public in March at $34 a share. Before that, it made profits in the first quarter of 2021 and the fourth quarter of 2023.
Reddit has achieved its first profit as a public company, driven by explosive user growth and the implementation of AI tools. Since its initial public offering, the stock price has tripled, increasing by 42% to close at $116.05 on Wednesday.
