For the first time in its 20-year history, Reddit has reported a profit, achieving $29.9 million in the third quarter, alongside a revenue surge to $348.4 million—up 68% year over year.
This milestone represents a major turnaround for Reddit. Since going public, the company initially reported a $575 million loss but has worked to trim it significantly, reaching just a $10 million deficit last quarter before finally breaking even. Daily active users also soared by 47% from the previous year, reaching 97.2 million on average, with peaks above 100 million on some days.
Reddit’s advertising revenue hit $315.1 million this quarter, complemented by $33.2 million from data licensing deals with major players like Google and OpenAI. These agreements allow tech giants to leverage Reddit’s posts for training their AI models, adding another robust income stream.
CEO Steve Huffman attributes the surge in user engagement partly to Reddit’s new AI-driven translation feature. Originally launched in French, it now supports multiple languages, including Spanish, Portuguese, Italian, and German, with plans to expand across 30 countries by 2025.
Reddit’s Strategic Moves Post-IPO
Reddit has actively pursued new revenue streams since going public. From partnerships with professional sports leagues to enhancing “Ask Me Anything” sessions, Reddit is also intensifying measures against web crawlers. Huffman even hinted at introducing paid subreddits to provide creators with revenue-earning opportunities while strengthening Reddit’s community-based model.
In a letter to shareholders, Huffman noted that “Reddit” ranked as the sixth most Googled term in the U.S. this year, highlighting Reddit’s growing influence as a go-to platform for advice, community, and information. Reddit is also committed to making its search function more user-friendly, aiming to further solidify its role as an information hub.
As Reddit continues to optimize its operations, it stands poised to leverage this profitability into sustained growth, potentially reshaping its long-standing business model and internet presence in the process.
