As a world-renowned online forum, Reddit finally achieved profitability in the third quarter of 2023 after years of losses. This breakthrough not only marks an improvement in the company's financial situation, but also lays a solid foundation for its future development. The following will provide a detailed analysis of Reddit's significant results in this quarter and the key factors behind it.
After 19 years of losses, Reddit finally made a profit after its listing. The online forum showed in its third quarter report for 2023, net revenue reached US$29.9 million, with revenue of 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 is a milestone for Reddit," Steve Huffman, co-founder and CEO of Reddit, said in a quarterly report. He noted that the platform has more than 97 million daily active users, an increase from last year. 47%. What is even more exciting is that in this quarter, the number of users exceeded 100 million many times, which is an important goal for Reddit for a long time.
So, how does Reddit make profits? Huffman gave the answer: Artificial Intelligence. He mentioned that Reddit began to use AI technology to translate platform content in multiple languages this year, so that non-English users can also enjoy these content.
“This quarter, the number of users brought by machine translation has increased four times compared to the previous quarter,” Huffman said, and is expected to expand machine translation to more than 30 countries by 2025.
Currently, Reddit's translation functions mainly cover French, Spanish, Portuguese, Italian and German. Reddit has earlier reached a partnership with Google and OpenAI to allow the two companies to access their data APIs, while Reddit is also leveraging these AI tools. Although the specific uses of these AI tools were not clear at that time, it now seems that the translation content is obviously the focus.
Reddit expects to remain profitable in the fourth quarter, with revenue expected to grow to $400 million and EBITDA reaching $125 million. However, Reddit needs to prove to its users how it will use these profits to improve the platform. Huffman mentioned that improving user search experience will be a key point in the future, which is also one of the improvements that users are looking forward to.
"Looking forward in 2025 and beyond, we will seek to accelerate our product roadmap, whether through new product development, global expansion or growing our advertising business." However, he did not disclose much specific plans.
Key points:
Reddit achieved profitability for the first time, with net revenue of $29.9 million in the third quarter.
The number of users has increased significantly, with the daily active users of 97 million, and exceeded 100 million in multiple periods.
Artificial intelligence helps expand translation functions and is expected to cover 30 countries by 2025.
Reddit's success not only demonstrates its innovation in the application of AI technology, but also provides valuable experience for other online platforms. In the future, Reddit will continue to expand its business globally, enhance user experience and further consolidate its market position.