For the first time in its nearly 20-year history, Reddit has achieved profitability. In its third-quarter earnings report, Reddit announced a net profit of $29.9 million, backed by $348.4 million in revenue—a significant 68% jump from last year. This is a major milestone for Reddit, which, despite its massive user base and cultural impact, has never turned a profit until now.
Historically, Reddit has struggled with financial losses, even losing $575 million in its first quarter after going public. However, by last quarter, it had trimmed its losses down to $10 million, and now, the company has finally managed to get into the green. Much of this success stems from a sharp increase in daily active users, which reached 97.2 million this past quarter—a 47% increase from the previous year, with daily active users occasionally surpassing the 100 million mark.
Reddit’s ad revenue was key in its financial turnaround, hitting $315.1 million this quarter. The company also earned $33.2 million from other revenue sources, including data licensing agreements with major tech players like Google and OpenAI, which use Reddit posts to help train their AI models.
CEO Steve Huffman attributed Reddit’s recent growth to its AI-driven translation tools, allowing users to translate posts into multiple languages. Initially launched with French, the feature has expanded to include Spanish, Portuguese, Italian, and German, with plans to roll it out to over 30 languages by 2025.
Reddit’s efforts to increase revenue don’t stop there. Since going public, the platform has inked advertising deals with professional sports leagues, revamped its “ask me anything” feature, and taken steps to limit content scraping by web crawlers. Huffman has also floated the idea of allowing paid community memberships. In a letter to shareholders, Huffman underscored Reddit’s growing presence, noting that in 2024, “Reddit” was the sixth most-Googled word in the U.S., proving that the platform remains a go-to resource for answers, advice, and community interaction.
As Reddit continues to evolve its offerings, we’ll likely see more innovations and revenue-generating strategies to capitalize on its recent success and maintain profitability.
