In its S-1 filing, Reddit said it had $804 million in revenue last year, the vast majority of which came from advertising. However, the company is unprofitable with a net loss of $90.8 million in 2023.
In an unusual twist, Reddit is also giving an unspecified number of its top users, including moderators and those with high karma scores, the chance to buy shares in its IPO. This privilege is typically reserved for professional investors who want to buy stocks at a theoretically lower price before everyone else can purchase them on the public market.
Reddit will allocate shares using a tiered system, starting with “specific users and moderators identified by us who have made meaningful contributions to Reddit community programs.” After this first stage, people with a karma score of at least 2,000 and people “who have performed at least 5,000 facilitation actions” will be invited to purchase shares.
In its SEC filing, Reddit says there are 267.5 million weekly active users, more than 100,000 active communities, and 1 billion total posts. The company says it has reserved 1.3 million shares of Class A common stock “to fund community-based programs that give Redditors the opportunity to bring their ideas to life.”
Reddit lists data licensing and model training as part of its monetization strategy. Earlier Thursday, the company announced an AI training data deal with Google that will give the search giant “more efficient ways to train models” and real-time access, at a reported price of about $60 million per year. Reddit currently generates most of its revenue from advertising, as 98 percent of its revenue came from ads in 2022-23.
“We expect our data advantage and intellectual property will continue to be a key element in educating future LLMs.”
“I have never been more excited about the future of Reddit than I am now,” Reddit CEO Steve Huffman wrote in the filing. “We have many opportunities to grow both the platform and the business, the latter through advertising, monetizing trading on the platform and licensing data… As the world becomes increasingly data-driven, we offer solutions based on people and experience. concentrated. We expect our data edge and intellectual property to continue to be a key element in educating future LLMs.”