Reddit's third-quarter earnings, released Tuesday, surprised investors with record growth and profitability.
Reddit reported a profit for the first time in its 19-year history, with net income of $29.9 million, or 16 cents per share, for the quarter compared with a net loss of $7.4 million at the same time last year. The analysts predicted a loss of seven cents per share for the quarter.
Revenue was up, rising 68% year-over-year to $348.4 million, better than Analysts were expecting $312.8 million. Advertising revenue drove most of the increase, contributing $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 every day in the third quarter, a record high and a nearly 50% increase from the same time last year. Reddit shares were over 22% on Tuesday after the earnings announcement.
“I'm excited to share that the third quarter was a historic quarter for Reddit,” Reddit CEO Steve Huffman wrote in the. his quarterly letter to shareholders. He later added that “In 2024 year to date, 'Reddit' was the sixth most searched word on Google in the US, highlighting that when people are looking for answers, advice or community, they are turning to Reddit.”
Reddit CEO Steve Huffman. Credit: Greg Doherty/Variety via Getty Images
Huffman stated that Reddit began 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 efforts into Spanish, Portuguese, Italian and German, according to the letter.
Going forward, it will try to make the search experience better for people searching internally or those navigating Reddit from an external search engine like Google, according to the company.
Related: Reddit traffic nearly triples in 8 months, posts rise to top of Google search
Reddit took off over 120% year to date at the time of writing.