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Executive Summary:
In its latest quarterly report since going public, Reddit announced significant gains in both advertising revenue and user growth, solidifying its position as a key player in the competitive social media ad market. Reddit’s daily active users (DAUs) increased by 6 million from Q2, reaching 97 million, marking a 47% year-over-year increase. Weekly active users also grew to 365 million, representing a 53% rise from the previous year. Engagement metrics were robust, with total conversation page views exceeding 90 billion, up more than 40% year-over-year.
Reddit’s Q3 advertising revenue surged 68% year-over-year to over $348 million, bolstered by a 56% increase in impressions driven by user growth and expanded ad placements. Key drivers included enhanced security for advertisers, partnerships with DoubleVerify, and reduced moderator control over ad placements. Performance revenue now makes up 60% of Reddit’s ad revenue, while small-to-medium business (SMB) advertising rose by over 80%, with SMB revenue seeing a 100% increase year-over-year.
Additionally, Reddit’s data-sharing agreements, including a major deal with Google, contributed $33.2 million in “Other” revenue, a 547% year-over-year rise. To improve user experience, Reddit has also introduced new machine translation tools, expanded search options, and rolled out its “CAPI” integration partnerships, doubling adoption from the prior quarter. With ongoing expansions and product improvements, Reddit is poised for further growth across its advertising and user engagement channels.
