# Reddit shares soar after company turns first-ever profit

Source: https://www.theguardian.com/technology/2024/oct/30/reddit-stock
Kiwi News: https://news.kiwistand.com/stories/Reddit-shares-soar-after-company-turns-first-ever-profit?index=0x67227341ce76afc529e4cd11eb2f054e0c78976a8494c7aa4b9ee92b25ea690bf02482e8
Submitted by misha on 2024-10-30 UTC, 4 upvotes, 1 comment

## Summary

Reddit reported its first quarterly profit as a publicly traded company, $29.9 million on revenue of $348.4 million, up 68%, and its shares rose more than 35% the next day. CEO Steve Huffman said a new AI feature translating English posts into French, Spanish, Portuguese, Italian and German drove user growth to nearly 100 million monthly users, up 47% from the year before, according to his shareholder letter. The company forecast current-quarter revenue above Wall Street estimates, helped by content licensing deals with Google and OpenAI. Jeremy Goldman of eMarketer said those AI deals are good for stability but will not fuel long-term growth.

## Article

Reddit on Tuesday reported a quarterly profit for the first time as a publicly traded company. Shares of the company, popular for its user-led communities known as subreddits, rose more than 35% as markets opened the next day.

The company reported nearly 100 million monthly users, an increase of 47% from the year before, and a profit of $29.9m. Its revenue reached $348.4m, a year-over-year increase of 68%, handily beating analysts’ expectations.

The CEO, Steve Huffman, said the site’s new feature that translates English posts into French, Spanish, Portuguese, Italian and German using artificial intelligence drove the increase in users. Reddit plans to expand the feature to more languages in the coming months, according to Huffman’s letter to shareholders.

The company forecast current-quarter revenue above Wall Street estimates, helped by its AI content licensing deals and strong digital advertising spending. Before going public, Reddit recorded profitable a profitable quarter in 2021 and another in 2023.

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The company’s content licensing deals with Alphabet’s Google and Microsoft-backed OpenAI for training their AI models have also been boosting its revenue, analysts have said. The social media platform also has deals with sports leagues such as the National Basketball Association (NBA), which are helping the company to bring more sports content on the platform and attract ad dollars.

“Reddit’s AI partnerships with Google and OpenAI are a huge bonus right now, and while they contributed a good deal to this quarter’s revenue, they’re like training wheels on a bike – good for stability, but they won’t fuel long-term growth,” said Jeremy Goldman, senior director of briefings at eMarketer.

## Comments

**misha**: > Monthly users rose by nearly half thanks to AI translation feature, and deals for AI training with Google and OpenAI boosted revenue

The AI revolution seems to be happening.