Reddit's CEO, Steve Huffman, has articulated a vision for the platform as a "de facto search engine," noting that a significant portion of online searches, even those initiated on other platforms, often lead users to Reddit discussions for authentic answers. This strategic positioning highlights Reddit's increasing influence in how individuals discover information online.
Financially, Reddit has reported a substantial 78% year-over-year revenue increase in the second quarter of 2025, reaching $500 million. This growth was primarily fueled by the introduction of new AI-enabled advertising tools and robust user engagement. The company has projected third-quarter revenue to be between $535 million and $545 million. Daily active users surpassed 110 million in Q2 2025, a 21% increase from the previous year.
Reddit is actively enhancing its core application, focusing on improving user onboarding and personalization. As part of its search-centric strategy, the company has temporarily paused plans for paid subreddits. Key AI initiatives include "Reddit Answers," designed to distill user-generated content into concise summaries. This feature has seen rapid adoption, growing from 1 million to 6 million users in a single quarter.
AI-enhanced campaigns are contributing significantly to advertising performance, accounting for 93% of Q2 2025 revenue and showing a 15% higher ad engagement rate than industry averages. Reddit's ability to leverage authentic, community-driven conversations for AI training has positioned it as a leading source in AI-related search citations, often surpassing established platforms like Wikipedia and Google in certain metrics. The platform's advertising business saw an 84% year-over-year increase, with analysts anticipating continued revenue growth driven by its expanding international footprint and increasing user engagement.