Reddit posted a profit for the first time in its nearly 20-year history, earning $29.9 million in the quarter. The platform also reached nearly 100 million daily users, up 47% from a year earlier. The company attributed its financial success not only to user growth and advertising, but also to content licensing deals with Google and OpenAI, The Verge reports.
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As part of its annual earnings report, the company reported total third-quarter revenue of $348.4 million, up 68% year-over-year. Previously, Reddit suffered significant losses, losing $575 million in the first quarter after going public, but the situation gradually improved and managed to turn positive.
The number of active users on Reddit has increased significantly. In recent months, the platform has increased its audience to 97.2 million daily users. On some days, this figure even exceeded 100 million. According to company representatives, the growth in audience is associated with new features, including the ability to translate posts into different languages.
It is noted that Reddit’s main source of income is advertising, which brought the company $315.1 million. An additional $33.2 million came from other sources, including content licensing agreements. In particular, Google and OpenAI acquired access to data from Reddit to train their artificial intelligence models.
Reddit CEO Steve Huffman noted in a letter to shareholders that one of the key reasons for the growth in the number of users was the function of translating posts into different languages using AI. The platform first offered translation into French, and then added support for Spanish, Portuguese, Italian and German. “We plan to expand the ability to translate posts into the languages of more than 30 countries by 2025,” Huffman said.
According to Huffman, Reddit’s popularity continues to grow. Thus, in 2024, the keyword “Reddit” became the sixth most searched keyword on Google in the United States. By the way, the platform is also actively working to improve its own search, making it simpler and more intuitive.