Reddit reports a solid quarter but shows signs of AI’s impact

Core Impact Points

• Reddit's total revenue of $805 million jumped 61% compared to the year-ago quarter, beating Wall Street's expectations.
• The company's net income was $253 million, up 183%, and expects to hit revenue of $860 million to $870 million next quarter.
• CEO Steve Huffman warned that search referrals were 'choppy' and traffic was more volatile later in the quarter, citing AI's impact on search engines.
• Reddit's global users are up, but the platform saw a slight decline in U.S. users, with daily active uniques decreasing from 53.5 million to 53.2 million.
• Analysts questioned AI's impact on Reddit's audience, with one saying that the stock is down sharply due to concerns about user growth and logged-out traffic.
• Huffman emphasized that Reddit's human aspect, including communities and conversation, will continue to make it a destination for users, despite AI's impact.