Reddit is one of the most-visited sites on the internet, a sprawling network of forums called subreddits where millions of people post questions, arguments, jokes, and advice every day. For most of its life it felt almost allergic to making money, and plenty of users assumed it barely did. That changed. Reddit now runs several real revenue streams, and because it became a public company in 2024 we can finally see how they fit together.
The short version: advertising pays most of the bills, subscriptions and virtual goods add a layer on top, and a newer business built on licensing Reddit’s enormous archive of human conversation to artificial-intelligence companies has become a genuine third pillar. Here is how each piece works.
Advertising is the main engine
By a wide margin, advertising is how Reddit makes money. Brands pay to place promoted posts and ads inside the feeds and conversations that users scroll through. Because Reddit is organized into thousands of interest-based communities, advertisers can target people by the very specific topics they care about, whether that is mechanical keyboards, personal finance, or a particular video game.
This is the same basic model that powers most large consumer internet platforms. If you want to see how dominant advertising can be for a company of this type, our explainer on how Google makes money shows advertising doing the same heavy lifting at a much larger scale. Reddit’s version is smaller but follows the identical logic: free access for users, attention sold to advertisers.
How much revenue Reddit actually brings in
For the full year 2024, Reddit reported total revenue above $1 billion, a sharp jump of roughly 62 percent over the previous year. Advertising made up the large majority of that figure. These numbers are public precisely because Reddit now has to file them, which removes a lot of the old guesswork about the company’s finances.
Rapid revenue growth does not automatically mean large profits. Like many newly public internet firms, Reddit spends heavily on engineering, infrastructure, and expansion, so its bottom line has swung around from one quarter to the next. The reliable place to check any single period is Reddit’s own investor filings rather than secondhand summaries.
Reddit Premium subscriptions
Reddit’s second stream is a subscription called Reddit Premium. For a monthly or yearly fee, subscribers get an ad-free experience and access to certain features. Historically, Premium also came bundled with a monthly allowance of the site’s virtual currency.
Subscriptions are a much smaller contributor than advertising, but they matter for two reasons. First, they bring in predictable recurring money from the most committed users. Second, those users tend to be the ones producing and curating the content that keeps everyone else coming back, so keeping them happy has value beyond the fee itself.
A history of virtual goods
For years Reddit let people buy coins and spend them on awards, little badges of recognition attached to posts and comments. A genuinely funny or helpful contribution might collect a pile of awards from strangers, each one paid for with real money somewhere up the chain.
Reddit retired that coins-and-awards system in 2023 and later reworked how paid recognition functions on the platform. Virtual goods were never a large slice of revenue compared with advertising, but they are a useful example of how Reddit tries to turn community behavior, the urge to reward a good post, directly into income.
The new business: licensing data for AI
The most important recent change is data licensing. Reddit sits on close to two decades of public conversation written by real people, which turns out to be extremely valuable for training artificial-intelligence systems. Rather than let that content be scraped for free, Reddit started charging for structured access to it.
Around its 2024 filings, Reddit disclosed data-licensing arrangements with a combined contract value in the hundreds of millions of dollars, spread over multi-year terms. Press reporting named major technology firms as customers, and these contracts transformed Reddit’s archive from a cost to defend into a product to sell. It is a reminder that a platform’s back catalog of user content can itself be an asset.
The Google and OpenAI deals
Two of the most widely reported customers are Google and OpenAI. Reddit struck an arrangement letting Google use its content to help train and inform AI models, and OpenAI announced its own deal in 2024 to access Reddit data and to bring Reddit content into its products. Terms shift over time, and such deals can be renewed or renegotiated, so the specifics are a moving target.
The strategic point is steadier than any single contract. Reddit positioned itself as a gatekeeper for high-quality, human-written text at a moment when AI companies were desperate for exactly that. Charging for access is both a revenue stream and a way to assert control over how its community’s words get used.
Why going public in 2024 matters
Reddit listed its shares on the stock market in early 2024, trading under the ticker RDDT. Becoming a public company changed the information picture more than the business model. It now has to publish detailed, regular reports on revenue, costs, and user activity, which is why this article can describe its money with real figures instead of rumors.
Going public also raised the stakes. Investors expect growth and eventually consistent profit, which puts pressure on Reddit to keep expanding advertising, push subscriptions, and grow the data-licensing business without alienating the communities that make the site worth visiting in the first place.
How Reddit’s model compares to other platforms
Reddit’s mix, mostly advertising with smaller subscription and licensing layers, is common among social platforms but not universal. A service like Netflix earns almost entirely from people paying monthly fees, a very different balance you can read about in our piece on how Netflix makes money. Search and ad giants, meanwhile, lean even harder on advertising than Reddit does, as the Google breakdown shows.
What makes Reddit a little unusual is the data-licensing angle. Its value to AI companies comes directly from its users writing things to each other, which means the same activity that fuels its ad business also feeds a separate licensing business. Few platforms monetize their community’s words in quite so many directions at once.
What makes Reddit’s advertising valuable
Not all advertising inventory is worth the same. What gives Reddit’s ad business its edge is context. When someone is reading a community devoted to running shoes, camera gear, or mortgage advice, they are signaling a clear, current interest, and an ad that matches that interest is far more likely to land than a generic banner shown to a random audience. Advertisers pay for that relevance.
Reddit has also leaned into formats that fit the way people actually use the site, such as promoted posts that look and behave much like ordinary community content rather than interrupting it. The company has invested in better advertising tools and measurement too, trying to make itself easier for big brands to buy from. Each improvement is aimed at the same goal: squeezing more revenue from the same stream of free users without driving them away.
Smaller experiments and future bets
Beyond the three main pillars, Reddit has tested a range of smaller ideas over the years, from premium community features to tools that help creators and moderators. None of these rivals advertising in scale, but they matter as hints about where the company thinks future growth might come from.
The data-licensing business is the clearest example of Reddit turning an existing asset into new money, and it is reasonable to expect more experiments along those lines. The common thread is that Reddit keeps looking for ways to monetize what it already has, its communities, its content, and its data, rather than relying on advertising alone. As a public company under pressure to grow, finding additional streams is less a luxury than a necessity.
The tension at the center of it all
Every one of these revenue streams depends on the same thing: people choosing to post, comment, and moderate for free. Push advertising too hard and the experience degrades. License too much data and users feel their contributions are being sold out from under them. Reddit’s challenge is to grow revenue while keeping the volunteers and contributors who make the platform valuable engaged and willing.
So far the company has managed to expand all three businesses at once, advertising, subscriptions and virtual goods, and data licensing, while staying free for the vast majority of users. Whether it can keep that balance as a public company under constant pressure to grow is the real question behind every figure in its filings.