Reddit’s AI-driven ads are boosting revenue

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Reddit has reported strong progress in its second-quarter 2025 earnings, with a growing focus on AI. 

The company is putting a lot of energy into expanding its advertising business, which is still its main source of income. 

In fact, ads brought in $465 million, making up 93% of Reddit’s total revenue.

A big part of this growth comes from new AI tools designed for advertisers. Reddit recently launched two major features: Reddit Insights and Conversation Summary Add-ons. 

Reddit Insights analyzes the billions of posts and comments on the platform to detect trending topics and provide real-time suggestions to help businesses plan their ad campaigns. 

The Conversation Summary tool lets advertisers include real Reddit discussions in their ads, giving people a chance to see what others are saying about certain products or brands. 

This makes ads feel more authentic and rooted in real conversations. Besides ads, Reddit also makes money by licensing its data, mainly to AI companies. 

This part of the business made $35 million this quarter, which is a 24% increase from the same time last year. 

Reddit has already signed data-sharing deals with big names like Google and OpenAI, and while these deals are still new, they’re expected to grow and bring in more money over time.

Another important development is Reddit’s AI-powered Reddit Answers tool, which launched last December. 

This tool gives users quick, clear answers in a chat-like format. It has grown rapidly, now used by 6 million people every week, compared to just 1 million a quarter ago.

CEO Steve Huffman said Reddit is planning to make this AI tool a bigger part of the platform by weaving it more deeply into Reddit’s search features. 

The long-term goal is to make searching and finding answers a central part of the Reddit experience, not just reading posts.

Do you think Reddit’s AI-powered advertising tools will improve the user experience by making ads more relevant? Or will they make the platform feel too commercialized and less authentic? Tell us below in the comments, or reach us via our Twitter or Facebook.