Reddit's explosive user growth and AI tools helped it turn a profit for the first time as a public company

NEW YORK (AP) — Reddit has turned a profit for the first time as a public company.

The social platform claimed a profit of $29.9 million, or 16 cents per share, for the period ended in September and reported sales of $348.4 million, beating analysts' estimates of $312.8 million. Reddit grew its daily user base to 97.2 million, a 47% increase from the same period last year, according to A company statement.

A LETTER TO SHAREHOLDERSReddit CEO Steve Huffman said its new AI translation feature — which allows readers to convert posts between English, French, Spanish, Portuguese, Italian and German — was a primary driver of user growth, especially internationally in countries like France, India and the Philippines. Huffman wrote that Reddit plans to expand the feature to more than 30 countries by 2025.

Huffman wrote, “So far in 2024, 'Reddit' was the sixth most Googled term in the US, 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 took to Reddit to share critical information during recent hurricanes, reaching people in affected areas with timely updates.”

While the company's advertising is its main source of revenue, Reddit's revenue summary states Recent Data Licensing Agreements Begins to pay off financially. Both Google and OpenAI have contracted with Reddit to train their artificial intelligence models on its content.

San Francisco-based Reddit Inc., whose investors include OpenAI CEO Sam Altman, went public in March at $34 a share. Before that, it had booked profits in the first quarter of 2021 and the fourth quarter of 2023.

Since the initial public offering, the stock has tripled, up 42% to close at $116.05 on Wednesday.