Reddit Reports Strong Q4 Growth, but Faces Challenges in U.S. Market

Reddit has released its Q4 2024 performance report, showing steady growth in both user engagement and revenue. The platform now boasts 101.7 million daily active users, an increase of 3.5 million from the previous quarter. However, while global numbers are on the rise, Reddit saw a decline in U.S. users, a key market where the majority of its advertising revenue is generated.

Financially, Reddit brought in $428 million for the quarter, marking a significant 71% year-over-year increase. This growth is largely attributed to the expansion of its advertising business, which continues to attract more brands. Features such as the new “Reddit Pro” dashboard, which provides advertisers with trend insights and performance analytics, have contributed to this success. Additionally, Reddit’s “Ask Me Anything” ads and AI-powered automation tools are helping to drive ad engagement.

International expansion played a major role in Reddit’s user growth. The company credits its improved machine translation tools for driving between 40-50% of international user increases in Q4. With declining engagement in the U.S., Reddit may need to focus more on building its presence in overseas markets to sustain momentum.

The report also highlighted some volatility in search traffic due to Google’s algorithm changes. While Reddit states that its referral traffic has since stabilized, the platform noted an increase in searches specifically including the term “Reddit,” suggesting that users are actively seeking out its content despite search fluctuations. This lines up with the common trick of avoiding Google’s ads and AI search results by specifically adding “Reddit” to their search queries, ensuring that they only get informative or useful threads about a topic.