Reddit's Data-Licensing Revenue Grows, But Advertising Remains Top Priority

Reddit's data-licensing revenue grew by 24% to $43 million in Q2, representing only 5% of its total revenue of $805 million. The company's data licensing business is still a relatively small part of its overall income statement.

The two largest buyers of Reddit's data are Google and OpenAI, which use it to train large language models and improve AI-powered search summaries. However, management views data licensing as an expanding marketplace with various opportunities beyond AI training.

While data licensing revenue is growing, advertising remains the main focus for the company, with ad revenue climbing 64% year-over-year to $762 million in Q2. The key goal is to increase weekly active users (up 24% YoY) into daily active users (up 18% to 130 million), which drives more ad impressions.