Reddit has beaten analyst forecasts for the second quarter of this year with revenue up by 61% to $805 million, beating Wall Street’s expectations.
The company expects third-quarter revenue of $860-$870 million, well above the average analyst forecast of $829.1 million.
According to Reddit, new AI features help advertisers set up and optimise campaigns. Among other things, the tools can recommend successful ads, generate ad copy tailored to Reddit, measure user actions after an ad, and select target groups based on interests and subreddit communities.
Chief operating officer Jen Wong said that the number of advertisers rose by about 70% in the second quarter. Medium-sized, small and international companies in particular contributed to that growth.
However, the number of US users grew less rapidly than before. Reddit attributed this to changes in search algorithms that temporarily drove less traffic to the platform via search engines. Despite that slowdown, the company continues to benefit from increasing demand for digital advertising and from investments in AI technology.
Investors continue to keep a close eye on the company because of the important role Reddit plays in the AI sector. Large technology companies use Reddit’s content to train language models, while at the same time there are concerns that AI chatbots may affect the number of visitors coming from search engines.
Emerce
Ltd
