Reddit has reported its first quarterly performance update as a publicly listed company, with the platform seeing a solid rise in daily active users, and a 48% year-over-year increase in revenue.
First off, on users. Reddit is now up to an all-time high of 82.7 million daily actives, up 37% year-over-year.
As you can see in this chart, Reddit has seen steady growth in its daily user numbers, reflecting its efforts to maximize platform engagement.
Though I’m not entirely convinced that this is actually an “all-time high” as Reddit claims.
More accurately, this is likely an all-time high based on the period that it’s been reporting daily active users as a stat.
Back in 2019, Reddit reported reaching 430 million monthly actives, which was its actual all-time high in usage, and based on general social media averages, that would suggest that, at one time, Reddit was probably seeing around 200 million daily actives.
Since then, however, the platform has undergone a range of updates designed to improve its business prospects, including significant rule changes to crack down on its most controversial elements. As a result, from 2020 onward, Reddit switched to sharing daily active user counts instead.
So based on this period, this is an all-time high, but I’m not sure that it’s an all-time high for the platform, as such.
Still, Reddit claims that it saw record traffic in Q1, while it also saw relative growth in both the U.S. and international markets.
Reddit says that its international growth remains a top priority, with translation tools helping to open up the platform to more people.
In terms of revenue, Reddit brought in $243 million for the period, with ads revenue up 39% year-over-year.
Which is a relatively good result, though this chart is a concern:
Reddit says that its costs increased in the period due to an increase in stock-based compensation and related taxes as a result of its IPO. Which should mean that such impacts are contained. But right now at least, Reddit’s operating at a $575 million loss. Which is a pretty rough way to open.
It’s hard to know what to expect from Reddit, because while it is working to restructure its business, and maximize its revenue potential, we don’t know what it might make from, say, data sales, and whether advertisers will be able to drive significant results in the app.
Reddit is adding more ad options, and it’s increasingly become an important platform for genuine product insights, which could drive more value for brands. But it still feels like it’s in the relatively early stages of building on this, and the results here largely reflect such.
The question now is whether Reddit will be able to bring in more users, and become a bigger consideration in the broader social media sphere.
Maybe, Reddit communities have driven some benefit from the steady migration away from X (formerly Twitter), but what Reddit does next, and how it keeps adding more users, will be important.
And thus far, it does look to be on the right track, despite the one-off cost increase.
You can read Reddit’s Q1 2024 shareholder overview here.