Reddit stock price soars after social media player reports first profit

Reddit's banal value is surging aft nan societal media subordinate notched its first profit successful nan company's astir 20-year history.

Reddit connected Tuesday reported nett income of astir $30 cardinal for nan 3rd quarter, while its gross of $348.4 cardinal for nan play topped expert forecasts. Those figures were up from a nonaccomplishment of $7.4 cardinal connected income of $207.5 cardinal a twelvemonth ago. Showing awesome customer growth, nan business now has much than 97 cardinal regular users, up 47% from a twelvemonth ago.

A cardinal facet down Reddit's accelerated maturation of precocious is artificial intelligence. In a letter to shareholders, Reddit co-founder and CEO Steve Huffman said a caller AI-powered work that lets group construe posts betwixt English, French, Spanish, Portuguese, Italian and German quadrupled its number of users. Reddit plans to rotation retired nan characteristic to much than 30 countries complete nan people of 2025, he added.

"In 2024 truthful far, 'Reddit' was nan sixth astir Googled connection successful nan U.S., underscoring that erstwhile group are looking for answers, proposal aliases community, they're turning to Reddit," Huffman wrote. "We saw this play retired successful existent clip erstwhile nan White House came to Reddit to stock captious accusation during caller hurricanes, reaching group successful nan affected areas pinch timely updates."

Reddit was launched by Huffman, Alexis Ohanian and Aaron Swartz successful 2005, only immoderate 16 months aft Mark Zuckerberg launched Facebook. But Reddit didn't go nationalist until earlier this year and had ne'er turned a profit, piling up hundreds of millions successful losses moreover arsenic its assemblage steadily grew. 

Reddit's stock, which successful March debuted connected nan New York Stock Exchange astatine $34 a stock nether nan ticker awesome "RDDT," person since much than tripled successful worth and traded Wednesday day astatine $113.50, up 39% connected nan day.

Today, nan company's main root of gross remains advertising, though it now besides brings successful money done financial agreements pinch companies for illustration Google and OpenAI that train their generative-AI devices connected Reddit's content.

"Looking ahead, including nan hunt acquisition connected Reddit is simply a cardinal portion of our strategy," Huffman said Tuesday successful a telephone pinch Wall Street analysts. "We want to guarantee that each users person nan champion acquisition possible. This includes users coming to Reddit from outer hunt and those searching straight connected Reddit who are looking for recommendations connected what to buy, what to watch, aliases what products aliases services are nan best."

The Associated Press contributed to this report.

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