During Reddit Q2 2024 Results Conference Call On Tuesday, co-founder and CEO Steve Huffman said Reddit’s 342 million energetic users are increasingly using the platform as a search engine, resulting in greater than 1 billion internal searches per 30 days.
Huffman also explained how AI could drive users deeper into Reddit while also adding some promoting dollars to the company’s revenue. AI Could Help moderate content on Reddit to make the site safer and turn it into a search powerhouse.
“Reddit search is a huge opportunity,” Huffman said on the call. “Loads of recent users are doing searches… they’re literally typing in exactly what they’re interested in. So that’s [a] really essential area of consumer services.”
Huffman said Reddit will begin testing recent AI search results pages with summaries and recommendations “later this year” to help users find answers and recent communities. Google, currently the world’s largest search engine, has over 90% of the marketintroduced AI search results earlier this 12 months to mixed reviews, and has since reduced function.
Huffman also said that AI search has long-term promoting potential, which could boost the platform’s revenue. Reddit is famous didn’t make a profit for nearly 20 years of operation before it went public in March, but Huffman said the platform is now profitable on an adjusted basis EBITDA (earnings before interest, taxes, depreciation and amortization).
“We had positive cash flow for the second quarter in a row,” he said. Reddit only published two quarterly reports yet.
Reddit CEO Steve Huffman. Photo Credit: Spencer Platt/Getty Images
Huffman also spoke about other ways users could make money on Reddit. The team is working to monetize the developer platform “this year” so creators can make money, he explained.
While Reddit users may soon have the ability to monetize their conversations, Huffman assured shareholders that Reddit won’t grow to be the next YouTube or Twitch. Reddit’s current free communities will proceed to grow and exist, and paid subreddits will exist alongside them.
“In my experience at Reddit, whenever we add a fundamentally new way to use Reddit, what happens is it expands Reddit, but we haven’t seen it cannibalize existing Reddit,” Huffman said. “Now we’re going to open the door to new use cases, new types of subreddits that you can build that can have exclusive content or private areas, things like that.”
The remainder of Reddit’s report showed that second-quarter revenue rose 54% 12 months over 12 months to $281.2 million. That growth was fueled by a 41% increase in promoting revenue, which jumped to $253.1 million.
The variety of each day energetic users on the platform increased by 51% to 91 million.
Reddit has content licensing agreements with Google and OpenAI, creators of ChatGPT.