Reddit is now a profitable company. The social media platform, which went public in March, announced its third-quarter results on Tuesday, and the results were far better than what Wall Street had expected.
Reddit’s revenue rose 68% year-over-year in the third quarter to $348.4 million. The company announced its first profitable quarter since going public, with net income of $29.9 million, up from a $7.4 million loss in the year-ago period.
This shift to profitability is mainly due to a 56% year-over-year increase in advertising revenue, which reached $315.1 million. Additionally, revenue from data licensing agreements surged by 547% year-over-year.
97 million daily active uniques
In a letter to shareholders, Reddit CEO Steve Huffman said that the platform averaged over 97 million daily active uniques, up 47% year-over-year. The platform exceeded 100 million a few times during the quarter, which Huffman said had been a longstanding milestone for the company.
Reddit introduced a “machine translation” feature that automatically translates its content into various languages. This technology has greatly enhanced the platform’s global reach. The company reported a 44% increase in daily active users outside the U.S., particularly in markets like France, India, and the Philippines.
Reddit became the sixth most Googled word in the U.S.
“Reddit’s influence continues to grow across the broader internet. In 2024 so far, “Reddit” was the sixth most Googled word in the U.S., underscoring that when people are looking for answers, advice, or community, they’re turning to Reddit. We saw this play out in real-time when the White House came to Reddit to share critical information during recent hurricanes, reaching people in the affected areas with timely updates,” Huffman said.
Looking ahead
Reddit said it is committed to expanding its presence in around the world and will also focus on enhancing the user search experience.
“Looking ahead, improving the search experience on Reddit is a key part of our strategy. We want to ensure that all users have the best experience possible. This includes users coming to Reddit from external search and those searching directly on Reddit looking for recommendations on what to buy, what to watch, or which products or services are the best,” Huffman said.
Adding: “We know many users are looking for more than just answers; they are looking for authentic, real-world insights and advice from the communities on Reddit. We are focused on making the experience of navigating conversations and content on Reddit easier and more intuitive.”
Reddit forecasts fourth quarter revenue to be in the $385 million to $400 million range, and expects earnings before interest, taxes, depreciation, and amortization (EBITDA) to be between $110 million and $125 million.
After announcing its quarterly results, shares in Reddit surged by 25% to a record high.
Reference: