Reddit, an online forum that had suffered losses for 19 consecutive years, finally achieved profitability in the third quarter of 2023, with net income reaching US$29.9 million, and revenue increasing 68% year-on-year to US$34.84 billion. This impressive result marks that Reddit has successfully turned around and found a new direction for growth. The editor of Downcodes will take you to understand the secrets behind Reddit’s profitability and its future development plans.
After 19 years of losses, Reddit finally turned a profit after going public. This online forum showed in its third quarter report of 2023 that its net income reached US$29.9 million and its revenue was US$34.84 billion, a year-on-year increase of 68%. Compared with the losses in the previous two quarters, this result is impressive, and Reddit seems to have finally found its direction.
"The third quarter was a milestone moment for Reddit," Reddit co-founder and CEO Steve Huffman said in the quarterly report. He noted that the platform has surpassed 97 million daily active users, an increase from last year. 47%. What's even more exciting is that during this quarter, the number of users exceeded 100 million multiple times, which is an important goal of Reddit for a long time.
So, how does Reddit become profitable? Huffman gave the answer: artificial intelligence. He mentioned that Reddit began to use AI technology to translate platform content into multiple languages this year so that non-English users can also enjoy the content.
“This quarter, the number of users brought in by machine translation increased fourfold from the previous quarter,” Huffman said, predicting that Reddit will expand machine translation to more than 30 countries by 2025.
Currently, Reddit's translation feature mainly covers French, Spanish, Portuguese, Italian and German. Reddit has earlier partnered with Google and OpenAI to allow the two companies to access their data APIs, and Reddit is also leveraging these AI tools. Although the specific uses of these AI tools were not clear at the time, it seems now that translated content is clearly a focus.
Reddit expects to remain profitable in the fourth quarter, with revenue expected to grow to $400 million and EBITDA of $125 million. However, Reddit needs to demonstrate to its users how it will use those profits to improve the platform. Huffman mentioned that improving user search experience will be a key point in the future, and this is also one of the improvements that users are looking forward to.
Huffman said, "Looking to 2025 and beyond, we will look to accelerate our product roadmap, whether through new product development, global expansion or growing advertising business." However, he did not disclose too many specific plans.
Reddit's road to profitability has not been smooth sailing, and its future development is also full of challenges and opportunities. The application of artificial intelligence technology has brought new vitality to Reddit, but how to continue to innovate, improve user experience, and maintain profitable growth will be a key issue that Reddit needs to continue to pay attention to in the future. The editor of Downcodes will continue to pay attention to the subsequent development of Reddit.