Reddit’s revenue surges as AI and advertising drive growth

Reddit reported its second-quarter earnings on Thursday, revealing strong financial performance driven by its growing focus on artificial intelligence and advertising. The company’s revenue surged, with advertising continuing to dominate its income stream, generating $465 million—accounting for 93% of total revenue. A key driver of this growth is Reddit’s strategic investment in AI-powered advertising tools. Last month, the platform introduced two new features designed to help advertisers leverage its vast user-generated content. Reddit Insights uses the billions of posts and comments across the site to identify real-time trends and provide data-driven campaign insights. Meanwhile, Conversation Summary Add-ons allow advertisers to incorporate authentic user discussions directly into their ads, showcasing public sentiment around products and brands. In addition to advertising, Reddit’s “other revenue” category—primarily driven by data licensing—rose 24% year-over-year to $35 million, up from $28.1 million in the same quarter last year. This growth reflects increasing demand from AI companies seeking access to Reddit’s rich dataset. The platform has already secured data licensing deals with major AI players, including Google and OpenAI, and these partnerships are beginning to contribute meaningfully to its bottom line. Another major AI initiative is Reddit Answers, a conversational tool launched in December that delivers concise, community-sourced answers to user queries. The feature has seen rapid adoption, growing from 1 million weekly users in the previous quarter to 6 million in just a few months. CEO Steve Huffman highlighted the tool’s success in a letter to shareholders, stating that Reddit is working to integrate it more deeply into the platform’s core search experience to make search a central part of the user journey. With AI now embedded across advertising, data monetization, and user experience, Reddit is positioning itself as a key player in the evolving AI landscape—transforming its community-driven content into a valuable asset for both businesses and machine learning models.