Overview
- Reddit posted Q3 revenue of $585 million, up 68% year over year, with ad sales up 74% to $549 million and reported 91% gross and 40% adjusted EBITDA margins.
- CFO Drew Vollero said Reddit is an "AI winner" without heavy AI costs, noting Q3 capital expenditures of about $2 million, or 0.4% of revenue.
- Licensing deals with OpenAI and Google permit AI training on Reddit posts, while the company deploys AI for machine translation and better on-platform search.
- International daily active users rose 31% to 64 million versus 7% growth to 51.6 million in the U.S., and more than 75 million people used Reddit search weekly in Q3.
- Shares jumped 7.5% after the report before retracing this week, and analysts are focused on valuation and growth in logged-in usage as Jim Cramer touts Reddit's AI potential.