Reddit has reported impressive Q3 2024 earnings, sending its stock up after hours.
Total revenue jumped 68% to $348.4 million, fueled largely by a 56% year-over-year boost in ad revenue, which reached $315.1 million. While Reddit’s data-licensing business—selling data to LLM AI companies—is a small part of the mix, it grew by 547% to $33.2 million, showing potential for future expansion. For now, though, Reddit’s growth is clearly driven by ads.
Average revenue per user (ARPU) also saw solid gains across the board: global ARPU rose 14% to $3.58, U.S. ARPU increased 12% to $5.88, and international ARPU was up 16% to $1.32.
In a letter to shareholders, Reddit pointed to several ad-related wins, with performance-driven revenue making up 60% of total ad revenue and SMB/mid-market advertising growing over 80% year-over-year. Perhaps most importantly, industries like financial services and pharma, often cautious about brand safety, spent more on Reddit.
Reddit credited its ad revenue growth to higher user engagement, of course, but also better ad load, and ads in new places, like post comments.
Why This Matters:
Reddit’s Q3 results highlight an untapped opportunity for advertisers that’s finally getting tapped. Record-breaking user growth is contributing. Daily active users soared 47% year-over-year to 97.2 million, even breaking the 100 million mark on peak days. The platform saw weekly active users climb 53%, with increases across both registered and unregistered visitors.
This surge in user activity means advertisers have another platform to more confidently reach a large, engaged audience. As Reddit continues to roll out new ad formats and improve its advertising technology, brands have more ways to connect with users at scale.
Experts React:
Here are some top reactions to the Reddit Q3 report:
Our Take:
Reddit has historically struggled to attract major advertisers. Its reputation as a vast network of forums, paired with concerns about brand safety, has made some brands hesitant to invest.
However, Reddit’s strengths—valuable and entertaining, SEO-optimized content that has cultivated a large, loyal audience—are now impossible to ignore. As a result, based on the earnings, advertisers are opening their wallets. Reddit’s focus on attracting SMB advertisers is also a smart move, as these brands are generally less concerned with brand safety.
