The surge in profitability is underscored by an impressive increase in daily users, which rose to 97.2 million, representing a 47% growth compared to the same period last year. This spike in user engagement reflects Reddit’s ability to attract and retain a large audience.
In a letter to shareholders, CEO Steve Huffman attributed much of this international growth to the company’s new AI translation feature, which enables users to convert posts between English, French, Spanish, Portuguese, Italian, and German. This tool has proven particularly effective in boosting user engagement in countries like France, India, and the Philippines. Huffman noted that Reddit plans to expand this feature to over 30 countries by 2025.
He emphasized Reddit’s growing prominence, stating, “In 2024, ‘Reddit’ was the sixth most Googled term in the U.S., highlighting that when people seek answers, advice, or community, they turn to Reddit.” He pointed to the platform’s role during recent natural disasters, where the White House utilized Reddit to disseminate crucial information and updates to affected communities.
Advertising remains Reddit’s primary source of revenue, but the company has started to benefit financially from recent data licensing agreements. Notably, Google and OpenAI have signed deals with Reddit to train their AI models using the platform’s extensive content.
Founded in 2005 and based in San Francisco, Reddit went public in March at a share price of $34. Since then, the stock has experienced significant growth, tripling in value and closing at $116.05 on Wednesday, a 42% increase.
This achievement is particularly noteworthy as it marks Reddit’s first profit since its initial public offering, not just in its 20-year history, emphasizing the company’s turnaround and its potential for future growth. With a strong user base and innovative features, Reddit is well-positioned to continue expanding its influence in the social media landscape.
