Reddit revenues skyrocket as you bet on AI and ads

Reddit reported second quarter revenue on Thursday, but it is clear that its focus on AI is on a significant increase.

One important area of investment is expanding the advertising business supported by AI-powered marketing tools. The results reveal that the majority of Reddit’s revenue continues to come from ads, and continues to come from ads that have generated $465 million, accounting for 93% of Reddit’s total revenue.

Last month, the company launched two new features for advertisers: Reddit Insights, a tool that leverages billions of posts and comments on the platform to discover trends and provide real-time insights into campaign strategies, as well as a conversational overview add-on that allows advertisers to include user discussions directly in their ads.

The company also saw growth in the “Other Revenue” category, including its data licensing business. This means dealing with AI providers to access your data. Reddit said the category rose to $35 million, up 24% year-on-year, up from $28.1 million in the same period last year.

Reddit has already established content licensing agreements with major AI players, including Google and Openai. While these transactions remain new, the second quarter results point to a stable revenue stream with great potential over the long term.

Another important feature with AI is the Reddit Answers tool, which was released in December. The tool, which provides answers in a conversational interface, attracted 6 million weekly users. 1 million Users from the previous quarter.

in Letters to shareholdersReddit CEO Steve Huffman said the platform is working to integrate the tools “in depth into the core search experience” and “search core features across Reddit.”