Reddit’s recently launched A.I. marketing tools are already fueling strong advertising growth. In the latest quarter ended June, the social media company reported a 78 percent year-over-year revenue increase to $500 million, with 93 percent coming from advertising, the company reported yesterday (July 31). Touting the momentum, CEO Steve Huffman told analysts on an earnings call that one major advertiser plans to feature Reddit’s A.I. tools in a Super Bowl ad next year and another client said the tools uncovered a previously untapped customer segment.
Introduced in June, the new products—Reddit Insights, which tracks user engagement across posts and comments, and Conversation Summary Add-ons, which incorporate real user commentary into ads—have been warmly received.
“We’ve just gotten them out the door and I think they’ve been very well received,” Reddit chief operating officer Jen Wong rang an optimistic bell on yesterday’s earnings call. “We’re really excited to see more broad based adoption and impact from them.” Wong added that Reddit’s number of advertising accounts grew by 50 percent in the April–June quarter.
Beyond advertising, Reddit brought in $35 million primarily from A.I. licensing deals, including a partnership with Google. The agreement, signed last year, allows Google to train its Gemini A.I. models using Reddit’s vast archive of human-generated content. In return, Reddit gains access to Google’s Vertex AI platform, which has boosted the visibility of Reddit posts in Google Search results.
Reddit has also been building its own A.I.-driven tools. Last year it rolled out Reddit Answers, a search assistant that uses Vertex AI to summarize community discussions in response to user questions. As of the end of June, Reddit Answers had grown to six million weekly users—five times more than a year earlier.
That growth has also helped Reddit better understand the depth of its content and the opportunity it presents. “On our own product, we’re seeing that the corpus is deeper and broader, that I think even we realized before we built Reddit Answers,” Huffman said. “There’s a huge opportunity to provide users with broad and varied viewpoints on subjective questions, which I think is an important category of questions that users have on the internet.”
To make Reddit Answers more central to the user experience, the company plans to replace its existing interest boxes with a dedicated Reddit Answers search bar on the app’s homepage. “What we’re building towards this year is to have a product that starts personalizing instantly, removing as many barriers as we can for a new user to start finding their home on Reddit,” Huffman said.
While Reddit’s A.I. tools and ad business are driving short-term success, some analysts remain cautious. Redburn Atlantic warned that Reddit’s reliance on Google could eventually limit its growth potential, including its ability to attract new users.
For now, the platform’s user base continues to grow. At the end of June, Reddit had 110 million daily active users, up 21 percent from the same period last year.
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