In Q2 2025, Reddit delivered its strongest quarter ever, giving it the runway to reinvest aggressively. Revenue jumped 78% year-over-year to $500 million, and Reddit swung to a net profit of $89 million (18% of revenue). Adjusted EBITDA hit $167 million (33% margin), driven by booming advertising (ad sales grew 84% to $465 million). Daily active users reached 110.4 million (up 21% YoY). In short, Reddit is flush with cash and users. These results empower the company to pursue its strategic priorities – above all, transforming Reddit into a go-to search destination.
- Q2 Highlights: $500M revenue (+78% YoY); $89M net income (from a $10M loss a year prior); $167M Adj. EBITDA (33% of revenue); 110.4M daily users (+21% YoY); ad revenue $465M (+84% YoY).
These record results give Reddit the resources to double down on search. The leadership is clear that search is now a top priority for investment and product innovation.
Search Usage and AI-Powered Tools
In fact, Reddit’s own search is already huge: over 70 million unique users perform searches on Reddit each week. (Huffman notes that “hundreds of millions of people come to Reddit looking for advice” and Reddit is turning that intent into users of its native search.) Meanwhile, the new AI-powered Reddit Answers feature (launched Dec 2024) is gaining traction. It summarizes popular threads into concise answers, and its weekly user count jumped from 1 million in Q1 to 6 million in Q2 – a roughly 5× increase. Reddit is now integrating Reddit Answers more deeply: the company plans to fold these AI summaries directly into the main search bar and roll the feature out globally. The idea is to make answering common questions a one-step experience on Reddit itself, rather than sending users off to Google.
- Core Reddit Search: >70M weekly users (signaling that many people append “reddit” to Google searches for community answers).
- Reddit Answers (AI Q&A): Launched Dec 2024, now 6M weekly users (up from 1M last quarter). Available in the U.S., U.K., Canada, Australia and India, with deeper integration and international expansion coming.
By marrying human-generated forum content with AI summarization, Reddit aims to make its search stickier. Surveys cited by Reddit suggest most people still trust human answers over generic AI ones, which the company views as its unique edge.
CEO Steve Huffman’s Vision
Reddit’s CEO Steve Huffman has made the strategy explicit. In the Q2 shareholder letter, he wrote that Reddit is “concentrating our resources on the areas that will drive results for our most pressing needs,” including “making Reddit a go-to search engine.”. He emphasizes that Reddit’s value is in its “breadth of conversations and knowledge you can’t find anywhere else”. Huffman noted that each week hundreds of millions of people visit Reddit seeking advice, and the goal is to convert that intent into use of Reddit’s own search feature. Crucially, he also highlights Reddit’s human side: a survey cited by Reddit found a vast majority believe some questions can only be fully answered by humans (not AI). In other words, Reddit’s strategy is to double down on community-powered answers – using AI like Reddit Answers to surface the best threads, but ensuring the answers are grounded in real user discussions.
In practice, Huffman says Reddit will do things like feature the search bar more prominently, integrate AI summaries directly into search results, and continue globalizing the product. “We’re expanding Reddit Answers globally, integrating it more deeply into the core search experience, and making search a central feature across Reddit,” the company stated. All of this is aimed at making Reddit the first place people go when they have a question, instead of a last resort.
Strategic Imperatives
Reddit’s push to become a search destination boils down to several clear goals:
- Merge Search & Answers: Unify the legacy search function with Reddit Answers. The plan is to treat AI-powered Q&A as part of the main search UI. Every app launch will foreground the search bar, so users are immediately in an answer-seeking mindset.
- Scale AI Internationally: Continue rolling out Reddit Answers in new regions and languages. The product is currently in a handful of English-speaking markets; Reddit is investing to make it work in more countries and languages.
- Boost Engagement for Ads: Longer, richer search sessions mean more ad impressions. With ad revenue already up 84% to $465M, Reddit is aligning its monetization strategy around search. High-margin advertising and data licensing give Reddit the budget to innovate.
- Reduce Google Dependence: By improving its own search, Reddit wants to recapture traffic that would otherwise go to Google. As Huffman notes, Google is increasingly providing direct answers via AI, leaving fewer clicks for sites. If Google becomes a less reliable source of traffic, Reddit aims to be the alternative destination people trust for answers.
These strategic moves are supported by Reddit’s strong financials. The 33% EBITDA margin and rapid revenue growth give it flexibility to fund development. In effect, Reddit is betting that superior search tools on its own platform will keep users (and advertisers) from drifting away.
Competitive Landscape and Outlook
Reddit’s gamble comes at a time when search behavior is shifting. Many users already append “reddit” to Google queries to find community-driven perspectives – a classic hack for getting human answers. But as mainstream search engines like Google and Microsoft invest in AI answer boxes, the web’s traffic patterns are changing. Sites are seeing fewer clicks when answers appear instantly in the search results. Reddit’s strategy is to capture that demand itself: serve up the answers on Reddit so users don’t leave the app.
Data licensing deals underscore Reddit’s content value. Tech giants like OpenAI and Google have already paid to train on Reddit’s data (reflecting its vast, organic QA dataset). Those partnerships bring revenue, but also validate Reddit’s unique resource of user knowledge. On top of that, Reddit’s own advertising business – with high growth and profit margins – provides the funding for continued innovation. In the coming quarters, Reddit expects to keep growing (Q3 guidance is $535–$545M revenue) and will likely emphasize search and AI even more in product roadmaps.
In summary: Reddit’s blowout Q2 gives it the runway to evolve from social forum to search front-runner. By combining its massive community content with AI-powered answers, and making search a core feature, Reddit aims to become the preferred destination for real-world questions. It’s a bold move: if successful, Reddit could become a major challenger to traditional search engines by selling the one thing they struggle to generate on their own – human-sourced answers.