Reddit CEO Steve Huffman distinguishes between “Scrollers” who browse community forums and “Seekers” who come for direct answers, and has launched Reddit Answers, an AI-powered chatbot with 1 million weekly active users that pulls verbatim responses from existing posts. Since its beta debut in December 2024, Answers has expanded from the U.S. into Australia, the U.K., Canada, and India. Reddit plans to deepen integration—embedding Answers into its main search box and on-boarding flow—to capture users typing full queries. The move also aims to shield Reddit from “volatility” caused by Google’s algorithm changes, which in Q4 2024 caused traffic fluctuations. On the financial front, Reddit beat Q1 2025 expectations with $392.4 million in revenue (up 61% YoY) and 108.1 million daily active unique users (up 31% YoY), leading to a stock jump of nearly 20% in after‑hours trading.
Reddit CEO Steve Huffman categorizes platform visitors into two groups: Scrollers, who engage in community discussions on subreddits like r/sourdough, and Seekers, who arrive via Google to find direct answers on Reddit threads (TechCrunch). Historically, Reddit focused on its community backbone, but Huffman acknowledged that Seekers “aren’t coming for a community in that moment; they’re coming for an answer” and deserved a tailored product.
Reddit Answers launched in beta in December 2024 and quickly scaled to 1 million weekly active users. Initially U.S.-only, Reddit expanded the feature to Australia, the U.K., Canada, and India, making verbatim answers and AI‑summaries of Reddit posts accessible in a standalone tab in the mobile and web apps (Startup Success Blogs). Users currently access Answers via a separate icon in the navigation bar, where they can type full questions instead of keywords.
In 2025, Reddit plans to merge Answers more seamlessly into its core experience. The first step is embedding AI answers into the primary search bar, allowing users to enter natural language queries that surface both chatbot responses and traditional community threads (Engadget). Another envisioned entry point is the onboarding flow, using Answers to introduce new users to Reddit’s content breadth and relevance.
Reddit’s reliance on Google Search referrals led to “volatility” in Q4 2024 when an algorithm update disrupted traffic growth, causing a 27% stock dip earlier this year. By offering direct AI‑powered answers, Reddit aims to reduce dependence on external search engines and smooth out referral-driven fluctuations.
Strong Q1 2025 Financials
Reddit’s Q1 2025 earnings surpassed analyst expectations:
- Revenue: $392.4 million, up 61% YoY
- Daily Active Uniques (DAUq): 108.1 million, up 31% YoY
- Adjusted EBITDA: $115.3 million (29.4% of revenue)
- Net Income: $26.2 million, or $0.13 EPS
For Q2 2025, Reddit forecasted revenue between $410 million and $430 million and adjusted EBITDA of $110 million to $130 million (Business Wire).
Investor Reaction
Following the earnings release, Reddit’s stock surged nearly 20% in after‑hours trading, reflecting investor confidence in its growth and new AI strategy. The rally contrasts with the 27% decline earlier in the year due to search algorithm headwinds.
Reddit’s push into AI‑driven answers positions it to compete with traditional search and emerging AI platforms. As Answers moves from beta to full integration, Reddit seeks to blend community engagement with on‑demand information, ensuring both Scrollers and Seekers find what they need on a single platform.
Source: (Techcrunch)
