Technology

Reddit’s Q2 ad revenue jumps 84% year-over-year to $465 million

Driven by AI-driven ad innovations and a rapidly growing user base, Reddit posted $465 million in ad revenue for Q2 2025, marking an 84% surge from the previous year.

Campaign staff

August 4, 2025

10:30 am

Credit: Getty Images / Cheng Xin

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Reddit’s advertising revenue for Q2 2025 increased an impressive 84% year-over-year to US$465 million, accounting for over 93% of the company’s total revenue of $500 million.

The company reported net income of $89 million for the quarter, a strong turnaround from a $10 million loss in the prior year. Strategic partnerships with AI giants Google and OpenAI have significantly enhanced Reddit’s ad targeting capabilities and fuelled international expansion. This contributed to a 71% year-over-year jump in international revenue to $91 million, boosted by AI-driven translation and localisation technologies.

The growth has primarily been driven by Reddit’s rapid adoption of AI technologies, especially the rollout of Dynamic Product Ads (DPAs). These AI-optimised ads dynamically tailor content in real time, and have shown substantially higher returns for advertisers. AI tools now enable Reddit to insert contextually relevant ads directly into user conversations, improving click-through rates and advertiser ROI. Meanwhile, daily active users increased 21% to 110.4 million, and global average revenue per user jumped 47% to $4.53, indicating effective monetisation of Reddit’s expanding community.

“We’ve been growing our active advertiser base really nicely, but most of our growth still comes from existing advertisers that are well retained,” said chief operating officer Jen Wong.

Reddit provides marketers with diverse ad formats, including conversation placement ads that allow brands to advertise directly within discussion threads in its interest-based communities, known as subreddits.

The company recently launched two new AI-powered ad features designed to help brands drive engagement by tapping into user conversations on the platform. This includes Reddit Insights, a social listening feature that provides marketers with real-time data on trending topics and brand conversations, and Conversation Summary Add-ons, which allows brands to showcase positive user-generated content directly beneath their advertisements. It also has AI content licensing deals with Alphabet’s Google and ChatGPT-maker OpenAI.

According to a recent WARC report, Reddit’s total advertising revenue is forecast to exceed $1.8 billion in 2025, propelled by growth rates significantly outpacing the overall social media ad market. This ascent reflects Reddit’s unique community-driven content model combined with innovative AI-powered ad formats like DPAs, which have demonstrated over 90% higher returns on ad spend versus traditional digital ads.

Looking ahead, Reddit expects Q3 revenue between $535 million and $545 million, indicating it is on track to meet or surpass its $1.8 billion ad revenue forecast for 2025.

This story first appeared on Campaign Asia-Pacific.

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