In its recent earnings report, Reddit announced a revenue of $281.2 million for the second quarter, surpassing analyst expectations and marking a 54% year-over-year increase.

CEO Steve Huffman reported a 50% year-over-year growth in both users and revenue, highlighting that Reddit now has 342 million active users and over one billion internal searches conducted monthly.

Reddit outperformed other social media platforms in terms of monthly traffic, experiencing a 39% year-over-year increase in website visits, while competitors like Facebook saw declines.

Huffman hinted at exploring non-advertising revenue streams, including the potential for paywalled subreddits that could offer exclusive content.

As Reddit seeks profitability, it must balance new monetization strategies with user satisfaction to avoid backlash, similar to past protests over API pricing.

Huffman emphasized the importance of transparency regarding content usage, stating that Reddit will block access to entities that do not comply with usage terms to protect user privacy.

Despite the introduction of monetization features, Huffman assured shareholders that the existing free version of Reddit will continue to thrive alongside new opportunities for creators.

Huffman highlighted AI's potential to enhance user engagement and generate additional advertising revenue, suggesting it could help moderate content and improve safety on the platform.

Further details about the monetization methods and features are expected to be shared in the coming quarters as Reddit continues to evolve its business strategy.

Reddit is testing AI-powered search features aimed at enhancing user experience by summarizing and recommending content, which could significantly boost engagement.

After nearly 20 years without profit, Huffman announced that Reddit is now profitable on an adjusted EBITDA basis and has achieved positive cash flow for the second consecutive quarter.