Reddit's third-quarter earnings, released on Tuesday, surprised investors with record growth and profitability.
Reddit reported a profit for the first time in its 19-year history, with a net income of $29.9 million, or 16 cents a share, for the quarter compared to a net loss of $7.4 million at the same time last year. Analysts forecasted a loss of seven cents a share for the quarter.
Revenue was up, increasing 68% year-over-year to reach $348.4 million, better than the $312.8 million analysts expected. Ad revenue drove the bulk of the increase, contributing to $315.1 million of the overall total.
The earnings also showed that Reddit's user base is growing, with 97.2 million people visiting the site daily in the third quarter, a record high and a nearly 50% increase from the same time last year. Reddit shares were up over 22% on Tuesday after the earnings announcement.
Related: Here's Why Reddit Turned Down an Acquisition Offer From Google in Its Early Days, According to Cofounder Alexis Ohanian
"I'm excited to share that Q3 was a landmark quarter for Reddit," Reddit CEO Steve Huffman wrote in his quarterly letter to shareholders. He added later that "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."
Reddit CEO Steve Huffman. Credit: Greg Doherty/Variety via Getty Images
Huffman stated that Reddit started using AI to translate content on its website into other languages, starting with French in the first half of the year. The site has now expanded the effort to Spanish, Portuguese, Italian, and German, per the letter.
Going forward, it will try to make the search experience better for people searching internally or those navigating to Reddit from an external search engine like Google, according to the company.
Related: Reddit Traffic Nearly Triples in 8 Months, Posts Rise to the Top of Google Search
Reddit was up over 120% year-to-date at the time of writing.
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