Reddit is experiencing significant success. For the first time in its 20-year journey, the social media platform has reported profitability, achieving an impressive 97.2 million daily active users—a 47% increase compared to last year. At times during the quarter, active users even surpassed the 100 million mark, a milestone highlighted by Reddit CEO and co-founder Steve Huffman in a letter to shareholders as a noteworthy achievement for the site.
The public company shared these results in its earnings announcement for the third quarter, following its initial public offering in March.
In an impressive rebound, Reddit reported a profit of $29.9 million, a significant turnaround from the $575 million loss it faced earlier in the year during its first quarter as a publicly traded company. The company had previously reduced its loss to $10 million in the last quarter.
Strong financial results can be attributed to ad revenues reaching $315.1 million, marking a 56% increase year-over-year. Additionally, “other revenue,” which includes partnerships with Google and AI initiatives that leverage Reddit content for training AI models, amounted to $33.2 million, reflecting an extraordinary 547% growth from the previous year.
“This quarter has been another strong period for Reddit and our communities, as we have achieved significant milestones in user traffic, revenue growth, and profitability,” Huffman stated on Tuesday.
The CEO noted that so far this year, “Reddit” ranks as the sixth most Googled term in the U.S., as individuals increasingly seek out the platform for information, guidance, and community support.
Huffman emphasized the platform’s impact, citing a recent instance when the White House utilized Reddit to disseminate vital information during hurricanes, effectively reaching individuals in the regions affected by the disasters.
However, Reddit has faced challenges as well. The company received substantial backlash last year for its decision to implement fees for API access, which greatly affected third-party applications and led to some closures.
Additionally, the company is currently under investigation by the Federal Trade Commission regarding its practices related to the sale of user-generated content for training large language models run by both Google and OpenAI.