The Two Types of Reddit Users

Reddit CEO Steve Huffman categorizes the platform’s users into two groups: Scrollers and Seekers. Scrollers engage with community conversations on topics they are passionate about, such as r/sourdough or r/popculturechat. On the other hand, Seekers use Reddit to find specific answers and opinions by typing their query into Google Search and adding "Reddit" to the end.

Introduction of Reddit Answers

Reddit Answers, an AI-powered chatbot, is designed for Seekers. It provides verbatim answers and summaries from existing Reddit posts. According to Huffman, early results indicate that Reddit Answers is gaining traction. The company has not previously built a product for Seekers, who are looking for answers rather than community engagement.

Growth and Expansion of Reddit Answers

During the company’s first-quarter earnings call, Reddit announced that Answers has 1 million weekly active users since its beta launch in December. The feature has been expanded to Australia, the U.K., Canada, and India. Currently, Answers is a separate experience in the navigation bar, but Reddit plans to integrate it more deeply into the platform in 2025.

Integration Plans for Reddit Answers

Huffman outlined plans to integrate Answers into the primary search box, allowing users to type in full queries. The company is also exploring ways to introduce Answers at the beginning of the user journey, helping new users discover Reddit’s content. Additionally, Reddit aims to integrate Answers into external search results, providing users with a summarized version of the answer on Reddit.

Benefits of Integration

By integrating Answers, Reddit can reduce its reliance on Google Search. A Google Search algorithm change in the fourth quarter of 2024 caused volatility in Reddit’s user growth, which affected the company’s stock price. Huffman acknowledged that being an open platform can create variability, but the company wants to make it easy for users to find Reddit content.

Company Performance

Reddit’s stock price soared in after-hours trading as the company beat analyst earnings expectations and reported strong user growth. The company reported revenue of $392.4 million, up 61% year-over-year, and an adjusted EBITDA of $115.3 million. Daily active unique users reached 108.1 million, a 31% year-over-year increase. For the second quarter, Reddit estimates revenue between $410 million and $430 million and adjusted EBITDA between $110 million and $130 million.