After 19 years of operating primarily in the red, Reddit has finally achieved profitability, marking a significant milestone in its history. The company reported a net income of $29.9 million, translating to 16 cents per share in Q3 2024, a remarkable turnaround from the $7.4 million loss it experienced in the same quarter the previous year. Reddit’s revenue surged by an impressive 68% year-over-year, reaching $348.4 million and surpassing analysts’ expectations of $312.8 million. Ad revenue played a crucial role in this financial success, contributing $315.1 million to the overall revenue. This surge in ad revenue coincided with a dramatic increase in the platform’s daily user base, which reached a record 97.2 million, an almost 50% increase compared to the same period last year.
The news of Reddit’s financial performance had an immediate impact on its stock, leading to a 22% rise in shares on the day of the earnings announcement. CEO Steve Huffman highlighted the platform’s growing popularity and noted that it had become the sixth most Googled term in the United States in 2024. This popularity surge is partly attributed to Reddit’s strategic investments in artificial intelligence. The company has begun using AI to translate content into multiple languages, thereby making the platform more accessible to international users. Additionally, Reddit is enhancing its search capabilities not just for internal site searches but also for external queries, further solidifying its role as a comprehensive information hub and community forum.
User Growth and Future Prospects
After 19 years of mostly running at a loss, Reddit has finally turned a profit, hitting a significant milestone. The company reported a net income of $29.9 million, or 16 cents per share, for Q3 2024, a stark reversal from the $7.4 million loss in the same quarter last year. Revenue skyrocketed by 68% year-over-year to $348.4 million, well above analyst predictions of $312.8 million. Advertising played a key role, bringing in $315.1 million. The spike in ad revenue coincided with Reddit’s daily user base climbing to a record 97.2 million, nearly 50% more than last year.
The positive financial report sent Reddit’s stock soaring by 22% on the day of the announcement. CEO Steve Huffman emphasized the platform’s rise in popularity, mentioning it had become the sixth most Googled term in the U.S. in 2024. This surge is partly due to Reddit’s investments in artificial intelligence, including using AI to translate content into multiple languages to attract international users. The company is also boosting its search capabilities for both internal and external queries, solidifying its role as a key information hub and community forum.