Reddit’s first quarterly report since its March 2024 IPO delivered a blockbuster performance: Q1 2025 revenue jumped to $392.4 million, up 61% year-over-year, with ad revenue tracking the same gain. Daily active users climbed to 108.1 million—a 31% increase—and the company posted net income of $26.2 million ($0.13 per share). Shares spiked 6.4% in premarket trading on the strength of the results. What’s Driving the Surge?Executives point to Reddit’s AI-enhanced ad offerings and hyper-targeted “Conversation Placement” formats. “These authentic, community-driven ads give brands the precision they need,” CEO Steve Huffman said on the post–earnings call, noting that AI-powered tools are “already attracting big-name advertisers” despite market headwinds. Bullish Outlook for Q2Reddit guided to $410 million–$430 million in Q2 revenue—comfortably above the $395.5 million consensus—citing sustained demand for its ad tech stack. Active advertisers on the platform have grown more than 50% since last year, underscoring broadening brand adoption. Balancing Growth and ProfitabilityCOO Jen Wong stressed that while investing in AI tools remains a priority, “we’re focused equally on driving operational efficiency,” reflecting a shift toward profitability after a string of investments around the IPO. With a user base exceeding 600 million in ad reach and a fast-growing suite of AI-driven ad solutions, Reddit appears to have carved out a unique niche in digital advertising. The key question now is whether it can sustain this momentum, and achieve explosive revenue growth as well as expansion of long-term profit margin