Reddit reported a strong second quarter for 2025, with ad revenue reaching $500 million – marking a notable increase from the previous quarter. The platform is continuing to build momentum on its monetization strategy, even as user growth shows signs of plateauing.
Daily active users rose to 110.4 million, a modest gain over Q1. While U.S. engagement remained relatively flat, international growth decelerated, raising questions about the platform’s expansion potential outside its core markets.
Despite this, Reddit leadership maintains confidence in the platform’s broader growth trajectory. According to the company, strategic refinements in its product roadmap and user experience are expected to drive long-term engagement. Improvements in machine translation and localized experiences are also aimed at enhancing its appeal in global markets.
A key focus for Reddit remains its unique role in consumer research and shopping discovery. The company reported that 40% of posts have commercial intent, and 80% of users believe that only human input—not AI-generated content—can adequately answer certain questions. Reddit is also leaning into this trend by expanding “Reddit Answers,” an AI product that draws insights directly from subreddit discussions. The feature now supports 6 million weekly queries, with 70 million users performing searches each week.
However, investments in AI are contributing to higher operating costs. While new ad products such as Conversation Summary Add-Ons are gaining traction, managing expenses while scaling these tools will be key to maintaining profitability. Reddit’s financial performance this quarter suggests strong progress on the monetization front, but questions remain about user growth and the sustainability of its evolving business model.
