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Reddit Achieves First Profitable Quarter Thanks to User Surge and AI Revenue Boost

For the first time since its founding nearly 20 years ago, Reddit has become profitable, reporting a $29.9 million profit in its third quarter, along with a 68% revenue increase year-over-year to $348.4 million. This success is largely driven by a rise in advertising and strategic AI licensing deals.

Reddit’s daily active users have surged to 97.2 million, marking a 47% jump from the same period last year, and even crossing the 100 million mark on peak days. CEO Steve Huffman credited this growth in part to new language translation features powered by AI, which have made Reddit more accessible in regions outside the U.S. “Reddit’s influence continues to grow across the internet,” Huffman said, adding that Reddit plans to expand its translation capabilities to over 30 countries by 2025.

A significant portion of Reddit’s revenue boost came from its recent content licensing partnerships with Google and OpenAI. Both companies have signed agreements to train their AI models using Reddit’s vast collection of user-generated content, adding $33.2 million to the platform’s revenue. However, analysts note that while these deals have contributed to Reddit’s recent profitability, continued growth will require more advanced ad targeting and improved user experience.

Reddit’s stock rose 22% in after-hours trading following the news. With additional enhancements planned for the platform’s search capabilities and advertising strategies, Reddit expects next quarter’s revenue to reach between $385 million and $400 million, above analysts’ projections.

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