Reddit, Inc.

What does it do?

Reddit is the internet's giant bulletin board — split into thousands of communities called 'subreddits' where people discuss everything from investing to cat photos to niche hobbies. Think of it like a massive collection of forums, each run by volunteer moderators, where users post content and vote things up or down. If you've ever Googled something and ended up on a Reddit thread, you've used the product. It went public in March 2024 and now has roughly 100 million daily active users worldwide.

How does it make money?

Reddit makes most of its money from advertising — brands pay to show ads inside subreddit feeds, similar to how Facebook or Twitter monetise their feeds. It also struck data licensing deals, selling access to its massive archive of posts and comments to AI companies like Google to help train their models — a newer but fast-growing revenue stream. Total revenue hit $2.2 billion in the latest year, up sharply from $1.3 billion the prior year. The company also reported $0.5 billion in net income, meaning it's actually profitable — which is rare for a recently-listed tech company.

Why do investors care?

The bull story is simple: Reddit has a huge, highly engaged audience that has been dramatically under-monetised compared to platforms like Meta. Advertising revenue per user is still far below what peers generate, so there's a real runway to grow without needing more users. The AI data licensing angle is a bonus revenue stream that didn't exist a few years ago and could keep growing as demand for quality training data rises. For the thesis to work, Reddit needs to keep growing its user base internationally and convince more advertisers that its niche communities deliver better-targeted audiences than generic social feeds.