Reddit’s second-quarter earnings show a strong emphasis on artificial intelligence, with significant investments driving both advertising and new product development.
Advertising remains the cornerstone of Reddit’s business, contributing $465 million, about 93% of its total revenue for the quarter. This growth is fueled by advanced AI-powered marketing tools designed to enhance advertiser performance and user engagement.
Recently, Reddit introduced two major features for advertisers: Reddit Insights, which analyzes the platform’s vast network of posts and comments to identify real-time trends for campaign planning, and Conversation Summary Add-ons, which allow brands to embed Reddit community discussions directly into their ads to highlight public sentiment.
Beyond advertising, Reddit is seeing increased revenue from data licensing partnerships with AI companies that pay for access to Reddit’s content. This category rose 24% year-over-year, reaching $35 million compared to $28.1 million in the same quarter last year. Reddit has already signed data-sharing agreements with major AI firms like Google and OpenAI, laying the foundation for a reliable and expanding revenue stream.
Reddit is also pushing forward with its own AI tools. Its Reddit Answers feature was launched in December and now attracts 6 million weekly users, up from 1 million in the previous quarter. This tool uses AI to deliver conversational responses, enhancing how users interact with content.
In a note to shareholders, CEO Steve Huffman emphasized the company’s commitment to integrating Reddit Answers more deeply into search, with the goal of making search a core feature across the platform.
