Reddit Revenue Jumps 78% to $500M as Advertising Business Accelerates

Strong User Growth and Record Profitability

Daily active users (DAUq) reached 110.4 million, up 21% year-over-year. Gross margin improved to 90.8% and the company achieved record profitability with net income of $89 million.

“This was our most profitable quarter yet,” said Steve Huffman, co-founder and CEO of Reddit. Adjusted EBITDA reached $167 million with a 33% margin.

New Advertising Formats for E-commerce

For the e-commerce sector, the introduction of new advertising products is noteworthy. Conversation Summary Add-ons use AI to surface relevant discussions directly below ads, increasing click-through rates by 10% compared to standard image ads.

Shopping Ads, which Reddit launched to general availability, achieve 2x higher return on ad spend (ROAS) compared to conversion campaigns. The number of product catalogues on the platform increased 4x year-over-year.

Global Expansion and Search

Reddit is expanding machine translation to 23 languages and strengthening its search position. Reddit Answers reached 6 million weekly active users, while over 70 million people search on the platform weekly.

The company positions itself as a key source of authentic conversations for AI models – according to Profound data, Reddit is the most cited domain for AI across all models.

Source: Reddit performance report – Letter to shareholders

Optimistic Outlook

For the third quarter of 2025, Reddit expects revenue in the range of $535-545 million and Adjusted EBITDA of $185-195 million. Company shares reacted positively to the announced results.

Reddit continues its strategy of building “the most human, trusted place on the internet” at a time when authentic human conversations are becoming increasingly valuable for brands and AI technologies.

Sourced from Reddit’s Q2 2025 shareholder letter