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 revealed that the majority of Reddit’s revenue continues to come from advertising, bringing $465 million, accounting for 93% of the company’s total revenue.
Last month, Reddit launched two new features for advertisers. RedditInsights, a tool that leverages billions of posts and comments on the platform to discover trends, provide real-time insights into campaign strategies, and allows advertisers to include Reddit user discussions directly in their ads, demonstrating public opinion about their products and brands.
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 users a week, a significant jump from 1 million users in the last quarter.
In a letter to shareholders, Reddit CEO Steve Huffman said the platform is working to “integrate the tools “more deeper into the core search experience” and “find the core features of Reddit as a whole.”
