Reddit is preparing for more mergers and acquisitions, according to comments made by company executives during its fourth-quarter earnings call on Thursday. Reddit CFO Andrew Vollero stated that the online forum is seeking businesses that can either leverage Reddit’s scale, meaning their products become more effective when used across Reddit’s massive user base, or help grow the company’s user base. He explained that Reddit is looking to buy capabilities, technologies, and companies.
During the question and answer portion, Vollero clarified the company’s approach to scaled opportunities, suggesting not to overthink the term and to view it as a spectrum of possibilities. He reiterated that Reddit is focused on acquisitions that can add to its business, a strategy that has been successful in the past. Vollero pointed out that this has been one of the secrets of the company’s success.
He highlighted Reddit’s adtech team as particularly adept at integrating acquired technologies instead of building them from scratch. This approach saves six to twelve months in development time and provides a proven product. Vollero credited these deals with helping Reddit improve its monetization capabilities as an ad-supported business.
However, Vollero also cautioned that while adtech acquisitions have worked well historically, Reddit is not ruling anything out. This aligns with his earlier statement about seeking companies that can deliver value when added to a platform of Reddit’s size.
The company reported strong earnings for the quarter, with $726 million in revenue, $690 million of which came from advertising. Its global daily active unique users grew 19 percent year over year to 121.4 million, and its earnings per share of $1.24 beat estimates.
Reddit also noted a growing opportunity to generate revenue from its AI search product in the future, raising the question of whether the company is looking at this area for mergers and acquisitions as well. Reddit has been increasing its AI investments in recent months, including the development of an AI search engine.
The company has a history of acquiring startups. In recent years, it has purchased several adtech players and AI optimization tools. These include Memorable AI in August 2024, which was designed to enhance Reddit’s advertising tools. This acquisition followed others from 2022, such as the AI platform Spell to boost machine learning capabilities, Spiketrap for improved ad targeting, Oterlu for machine-learning moderation tools, and MeaningCloud to improve machine learning and text analytics capabilities.