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Reddit, the social media platform famous for its dedicated online communities and lively debates, surprised Wall Street by turning profitable for the first time just months after its IPO, sending shares up 25%. % reached a record high.
On a call with analysts, Reddit executives said that investments in ad technology, designed to improve the performance of ads, are paying off, as is the momentum. Thai uses “machine translation” to automatically translate content into languages to increase its audience. It now has nearly 100 million daily active users, up 47% YoY in the quarter.
Net income for the company, which listed on the New York Stock Exchange in March, was $29.9 million in the third quarter, up from a net loss of $7.4 million in the same period last year and much higher. vs. Wall Street estimates of $10 million in Q3 losses.
“Continuing to look toward 2025 and beyond, we will look for opportunities to accelerate our roadmap, whether through new product development, expansion globally or growing our advertising business,” said Steve Huffman, chief executive officer of Reddit, “all while maintaining our commitment to profitably scale and ensuring that Reddit will be the go-to place for conversation and community on the internet.”
Reddit’s third-quarter revenue rose 68% to $348.4 million, compared with the Wall Street consensus for a rise to $314.8 million. It also forecasts revenue for the current quarter of between $385 million and $400 million, above Wall Street forecasts.
Huffman said the company will invest in modernizing its search capabilities, including developing “beautiful results pages” and integrating large language models into its results data.
Huffman also said the company is looking to help businesses, brands and creators have an official presence on Reddit, marking a new direction for a platform once known for hosting social conversations. sharp chat, anonymous and has a more relaxed approach to moderation.
He added that the White House now has an official account with the new Reddit Pro business service and has used this account to share important information with local communities during recent storms in the US.
However, Huffman was more cautious when talking about the licensing deals – selling its data to tech and AI companies to train their models – that it touted before its listing.
In particular, the company generated enthusiasm as a potential revenue driver when it struck a deal with Google and later OpenAI.
However, on Tuesday, Huffman said that while the company was still discussing future transactions, these were “limited” in number and primarily with smaller players.
“The story here is that Reddit data is extremely valuable to a lot of players in the market,” Huffman said. “So we’re open to business and finding the right balance between making this information accessible and building our own products around it.”
