Reddit is making money

It's been a long 20 years but we made it

Author

Backlog
November 11, 2024

Reddit / reddit.com

Reddit is finally profitable 💰

It has taken almost 20 years but we’re finally here: Reddit is profitable.

Reddit has been on a bit of a rollercoaster lately. They IPO’d back in March 2024 at $34, during fairly adversarial market conditions. The overall sentiment for the public move was quite negative (see: 20 years of unprofitable business above), and the market responded. Reddit lost nearly $575 million during its first quarter on the open market.

But things have turned around. What ‘things’ exactly?

  • Reddit harnessed the power of AI to translate content. Users can translate posts into French, Spanish, Portuguese, Italian, and German. CEO Steve Huffman says Reddit plans to expand to over 30 countries in 2025.

  • Reddit have started licensing their data, notably to Google and OpenAI. In February this year, Reddit reported it made $203m from one of these deals. We can expect many more dollah dollah bills have flown their way since.

  • Lots of product updates such as:

    • Implementing API restrictions to crack down on unwanted web crawlers, making their official deals more exclusive and therefore lucrative.

    • New moderation tools, including the ability to moderate communities on mobile.

    • A new developer platform for Reddit-specific apps (currently in beta).

    • A new video player.

Moves are being made

It’s clear the IPO has given Reddit a kick up the proverbial bum
 and it’s working. So what’s next on the Reddit product roadmap?

CEO Steve Huffman shared a new potential revenue stream: paid communities.

“I think the existing, altruistic, free version of Reddit will continue to exist and grow and thrive just the way it has. But now we will unlock the door for new use cases, new types of subreddits that can be built.”

Steve Huffman, Reddit CEO

With 97.2 million daily active users (a staggering 47% increase YoY), the rising demand for highly targeted content (to feed the AIs), and the recent moves in improving moderation tools, I wouldn’t be surprised to see private communities become a huge revenue stream.

BRB creating a £1,000/mo Backlog private communities. You’ll join, right? Right?