One significant area of investment is growing its advertising business, supported by its AI-powered marketing tools. The results revealed that the majority of Reddit’s revenue continues to come from ads, which brought in $465 million, representing 93% of the company’s total revenue.

Reddit reported record profits and growing AI-driven engagement, but analysts warn its reliance on Google search traffic—mostly from logged-out users—could limit long-term value.

Reddit forecast third-quarter revenue above Wall Street estimates on Thursday, betting on growing digital advertising driven by its artificial intelligence-powered marketing tools and sending its shares up 9% in extended trading.