Read it out with its first earnings report as a public company, shares markedly higher seven percent. Let's bring in Reddit CEO Steve Huffman and Steve the core to gone forty eight per cent top line growth. You're doing well, the ad environment seems really good. But I actually want to start with the next big thing, and that seems to be the user economy. That seems to be your focus. Tell me about the user economy strategy.
So, good morning, thanks for having me.
So, the user economy is the family of products and features that we're building to facilitate transactions between users on the platform, so user to user, gifting user to use their subscription, user community, subscriptions, things like that.
We think there's a ton of potential here.
One of our sayings that Reddit is the only thing that scales with the users is users. And so look, the ads business is great and can scale pretty much infinitely from our point of view, but we'd love to have another business model to sit alongside it, and that's what the user economy.
Is, Steve alongside. Also, the ad business that you say can infinitely scale has been AI and the selling of data and licensing to some of those big businesses that are creating large language models based upon the data that you license, Google being one of them. How infinite is that revenue stream? Because once the models are trained, how necessary is it to keep on licensing.
So I think there's a couple of ways to look at this.
First, the potential value here is I think quite large, and between us and other folks in the market, we're actually still developing that. You know, we're finding increasingly folks coming to Reddit, and I think what we're seeing overall big picture is in the AI era, where increasingly content online is written by machines, there's this increasing premium on content, perspectives, conversation that comes from real humans, and that's what Reddit provides.
So so far we've done one kind of major content licensing deal with Google, but we're talking to others as well. But your question about is is it a one time thing or ongoing? I think what's really important here is folks want real time access to up to date information, conversation perspectives.
Right.
Imagine a search engine that stopped indexing in twenty twenty one, it wouldn't be very helpful, and so I think that real time feed is really important.
Steve, you took the interesting step to ask redditors and particularly redditors who are investors in the IPO, to submit questions, and those some of which you answered on the call and some of which you'll follow up in video form. We're showing one of them now, which is what is the justification for having one billion dollars in working capital? Now? I want to take that question and apply it to AI.
Data licensing is a revenue generation tool for you. But on the technology side, might we see some M and A that answers that question from your reddit A community, but also helps us understand a bit more like what are you guys going to do to increase competence to increase the technology offering on AI?
Sure, we'll look.
Our first priority with the cash is to invest in the business, so to continue to develop the core Reddit product, the user economy, which we discussed, the developer platform, our
AI efforts, all of those things. Our second priority would be M and A And so you know, we're always I think looking in the market for teams and technology that can really kind of help advance our initiatives, and right as you allude to, I think there's just a tremendous opportunity in AI in search, both to make our core product better and potentially to expand it as well.
Let's talk about expansion and particularly internationally, because there's much talk about how you're basically translating able to bring what is all the reviews, the content, the discussion groups, not just to those that are writing and speaking in the English language, but in French and European countries. How is this likely to be enabled by AI but also add to the scale of international growth.
Well, this is really exciting, Like, not that long ago, we didn't have the capability of translating our content at human quality, but with today's large language models, we can do that, and so we can translate our what is today our mostly English corpus into just about any language. And so we're doing that in French right now and testing that in France, and it's going very well, and so almost immediately French speakers can see the entire Reddit
corpus or consume their entire redit corpus in English. And a lot of reddits content is universal, right, it's just people talking about life. But even the content that is maybe regionally specific to America, I think it's still really interesting to read and vice versa, and so I'm really excited at this idea that we can fulfill the promise of the Internet, which has allow people around the world, in different countries and different cultures to communicate in their native language.
For our Bloomberg television and radio audience worldwide, we're speaking to the Reddit CEO, Steve Huffman, and Steve things are going well right now. It seems one of the technology changes at the start of this year and even before that, was that Google started applying its work in large language models and AI to its search engine. And there is a school of thoughts that Reddit was a beneficiary of that that just within search, Reddit becomes more commonplace, higher
up the results that are given. Can you give us any sort of granularity on how that's helping you with growing the redditor base and keeping the redditor base.
Well, let's just take a step up for a second.
Reddit has what people want, right, People have questions.
They often go to Google with questions. Reddit has the best answers on the internet.
They want advice, they want information, they want a sense of community and belonging. These are the things that Reddit provides and search engines like Google ten years ago, last year, today, tomorrow help people find that content on Reddit. They're looking for those answers, they're looking for those communities they're looking for And so I think I look at this as
a natural evolution. Search engines are getting smarter, they're getting better, they're getting more effective, which means they're getting more effective at helping users find what they're looking for on Reddit, which of course benefits our platform, our business, and so I think these are all I think welcome evolutions. But red It's been a net beneficiary of search for a long time and I expect that to continue.
How much have you been a net beneficiary of going public, Steve? How much did the IPO help draw people to the platform. How much was it a pr event do you think and actually boosted some of the community there.
Well, look, I'm sure that's an aspect to it.
You know, it's hard to say, and you know Reddit primarily grows through word of mouth anyway.
You know, we don't really do consumer marketing, and.
So I think anytime we're in the news that helps in the IPO with a lot of news. But look, the reason I was most excited about the IPO is that we are able to include our users as investors. Our users have this deep sense of ownership over Reddit.
Right.
They create the communities, they create the culture, they create all of the content, and for them to have the opportunity to be actual owners.
That was our dream and that was one.
Of the main reasons we went public in the first place. So that's actually what I'm most excited about.
Steve is a kind of returning founder CEO of readit. What's your one personal goal for this year, something you want to achieve.
Well, we mapped out two of them.
We got the company public and I had my second kid, And so for the rest of this year, I want to deliver on some of the product initiatives that I've been very excited about, so developer platform, the user economy, the machine translation that we've discussed, and these are all things I think in the day to day building of Reddit that I'm very excited about.
Steve, congrats, I'm the second kid. Reddit CEO Steve Hoffman, joyed to have you with us. Thank you.