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Reddit exceeds expectations: How to avoid the midsized platform trap

15 April 2025
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In the year following its IPO, Reddit has defied our expectations, reporting five straight quarters of positive adjusted operating income and strong growth.

Profitability stems from disciplined cost management alongside exceptional user growth, with a focus on advertising performance and limited distractions.

The platform's human-generated conversations are proving valuable in the AI era, but AI strength could become a vulnerability if synthetic content overwhelms authentic discussion.

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Reddit's Wall Street Bet: Still no playbook for midsized platforms

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Reddit, a unique and valuable online space, has reported its first quarterly results as a public company, following a very successful IPO.

In the longer term, Reddit is doomed to scratch out an unprofitable existence as a wannabe scale ad platform, echoing peers in the public markets.

Advertising is probably the least-bad business strategy, as user payments, ecommerce and licensing revenues are even less proven. Dialling back growth ambitions to improve the bottom line is the most sustainable path.

Access report

  • Reddit's Wall Street Bet: Still no playbook for midsized platforms

    13 May 2024

    Reddit, a unique and valuable online space, has reported its first quarterly results as a public company, following a very successful IPO.

    In the longer term, Reddit is doomed to scratch out an unprofitable existence as a wannabe scale ad platform, echoing peers in the public markets.

    Advertising is probably the least-bad business strategy, as user payments, ecommerce and licensing revenues are even less proven. Dialling back growth ambitions to improve the bottom line is the most sustainable path.

    Access report