Reddit just turned a profit for the first time

Reddit’s recent success has been monumental. The platform achieved its first-ever profit in its 20-year history and now boasts a record 97.2 million daily active users, showing a remarkable 47% year-over-year increase. At times during the quarter, the user count even exceeded 100 million, a milestone that Reddit CEO Steve Huffman described as long-awaited.

Following its public debut in March, Reddit announced its third-quarter earnings, revealing a profit of $29.9 million. This is a significant improvement from the $575 million loss earlier in the year, which was reduced to $10 million in the last quarter.

The company’s success can be attributed to its ad revenue of $315.1 million, a 56% increase from the previous year, and the substantial growth in “other revenue,” including partnerships with Google and AI for AI model training using Reddit content, reaching $33.2 million, a staggering 547% increase from the previous year.

“Reddit and our communities achieved important milestones in user traffic, revenue growth, and profitability,” Huffman stated. He also noted that “Reddit” has been the sixth most Googled word in the U.S. this year, indicating the platform’s increasing popularity as a source of information, advice, and community engagement.

Despite its success, Reddit has faced challenges, such as backlash for charging for API access and scrutiny from the FTC over the sale of user-generated content for training language models by Google and OpenAI.

Overall, Reddit’s success story is a testament to its growing influence and impact on online communities and information sharing.