Reddit has always marched to the beat of its own drummer—so when it came time for its first earnings call as a public company, it had no plans to alter that strategy. The social media giant, on its earnings call Tuesday afternoon, not only took questions from investment firms, but also from its own users.
Reddit reported an $8.19 per share loss for the quarter, but revenues came in much higher than expected, at $243 million, compared to analyst estimates of $212.8 million.
The company solicited questions via the little-known subreddit r/RDDT, screening those questions internally before answering them on the call. As funny as it would have been to hear CEO Steve Huffman explain whether he’d rather fight 100 duck-sized horses or one horse-sized duck, it probably wouldn’t help the company instill confidence with investors—though, to be fair, President Barack Obama was asked that in a 2013 AMA (ask me anything) interview on the site and things worked out pretty well for him.
Huffman said this would be an ongoing practice for the company on future earnings calls. And while the executive team only answered two questions on Tuesday’s call, it said it planned to answer others within the subreddit after the call.
To Redditors’ credit, the question pool was fairly serious, as user/investors, some of whom were given the chance to buy shares at the IPO price, looked to learn about the company’s future direction. (Reddit shares have largely held their value since the IPO, falling just 2% overall. Shares were up 12% after-hours following the earnings announcement.) Here are the questions from users—and answers the company provided.
“How are your initiatives going in terms of licensing data for AI data models? Plans to expand beyond Google?”
AI licensing was a topic of interest for both users and analysts, given the treasure trove of data on Reddit’s servers–something that could be a tremendous revenue driver for the company. In answering this question, Huffman said Reddit was being selective with its partners, but stressed the need “to be very considerate of where our data goes and what it’s being used for.” While declining to comment on any deals under negotiation, he said the company is talking with both large players in the AI space as well as smaller ones. Both, he said, have an increased interest in using Reddit data for a variety of uses.
“Can you go into any specifics about what types of advertising are most responsible for the strong increase in earnings? Is it mostly from increased sales on previously existing types of advertising, or opening new types of advertising on the platform?”
Jen Wong, Reddit’s chief operating officer, took the reins on this one, saying the company had seen growth in both supply and demand, with broad-based strength across managed channels, such as verticals like r/finance and r/pharma. Ad inventory, she added, consists of two types: Those in feeds and those in conversations. Reddit saw strong growth in the conversation-embedded ads, as users dove deeper into the site.
Of course, Reddit being Reddit, there were a few phrases and questions that never got answered, but definitely showed the personality of the site. Among those:
- We all know Reddit has been for sale before. On a scale of “we’ll listen to every offer” to “Diamond Hands never selling,” how likely are Reddit and/or, you u/spez to sell majority stake to someone like . . . Alpha, or Nvidia, or anyone for that matter if the offer was right?
- How does Snoo [the alien mascot of the site] feel about FQ14 results?
Incredibly, no one actually asked any duck-size horses questions.
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