Reddit has published its latest earnings results, showing an increase in users, and a big jump in year-on-year revenue, as the platform continues to re-shape its ad business.
First off, on users, Reddit is now up to 108 million daily active users, adding almost 7 million more since last report.
As you can see in this graphic, Reddit’s growth rate has been fairly consistent, with its U.S. numbers, in particular, regaining some momentum in Q1.
Reddit says that it’s seen significant growth in Brazil, with its Brazilian daily active user count reaching an all-time high, and growing by almost 80% year-over-year. It’s also attributes its international user growth to its evolving machine translation tools, which are enabling more people to participate in Reddit discussions.
“Machine translation continues to be an important part of our international strategy. MT is available in 13 languages, up from 8 in Q4, including Vietnamese, Thai, Polish, Romanian, and Latin American Spanish.”
In addition to its daily active user count, Reddit has also shared its weekly active user numbers, which are now above 400 million (+31% YoY).
Which is something of an anomaly in social media circles. Most social platforms see around a 1.8x increase in their daily versus monthly user counts; Snapchat, for example, is now at 460 million DAU, and 900 million MAU. But Reddit is seeing a 4x increase, in weekly users.
That likely points to the transactional way in which people are using the app, coming to Reddit to find specific answers, as opposed to visiting it daily. Indeed, Reddit says that it’s seen a 23% increase in logged-In users, and a 38% rise in logged-out visitors.
The concern on this front is that it means a less stable audience, which is not as good for ad targeting, while it also means that Reddit’s more reliant on Google referrals than other apps. And if Google decides it doesn’t want to send traffic Reddit’s way anymore, that 400 million per week could be cut down very quick, reducing Reddit’s value for brands.
It’s an interesting variance either way, which also makes direct comparison of its performance on this front somewhat difficult.
But more people are coming to Reddit for “real insights”, with Reddit results now also appearing in many Google searches, aligning with audience demand for actual discussion around products, packages, etc.
That’s also helped Reddit drive more revenue, with the company bringing in $392 million for the quarter.
As you can see in these charts, despite its international growth, Reddit is still heavily reliant on the U.S. for its revenue intake. Ideally, it’ll be able to address this moving forward, with a more direct plan to monetize international markets. But right now, its U.S. audience remains the key focus, which is why it’s good to see it regain some growth momentum in the region.
On specific ad products, Reddit says that it’s made “meaningful progress” with its Dynamic Product Ads, which are currently in beta testing.
As you can see in this example, Reddit’s Dynamic Products Ads enable advertisers to showcase their items within related subreddits, helping to reach consumers as they go looking for product recommendations.
Reddit says that its improved machine learning models are driving better performance in its shopping promotions, helping to improve ROI for ad partners.
Overall, it’s a positive report from Reddit, showing steady growth, and a maturation of its business. It’s not clear what its growth potential is, and whether it can significantly expand beyond its dedicated core user base, while it remains heavily reliant on Google traffic for its non-logged in visitors.
But at this stage, Reddit does seem to be on the right track to maximizing its potential.
