Reddit has just made a profit for 20 years, and its Google and OpenAI partnership played a surprising small part in it.

You might be surprised to learn that the internet's most popular discussion hub hasn't made a profit in almost 20 years. In a letter sent to shareholders (via The Verge), Reddit announced that the company was profitable in Q3 of 2024, with a "Net income of $29.9 millions and a net margin of 8.6% - an improvement of $37.2million from the previous year".

The Guardian reports that Reddit's shares have risen over 35% since this report.

It may seem like a coincidence that this occurred in the same year as Reddit partnered with Google and OpenAI for the purpose of training AI models. Reddit's CEO Steve Huffman attributes the company's newfound profits to something entirely different: a new translation tool.

The CEO said that "this year, we started using AI to convert Reddit's corpus to other languages, making it easier for non-English speaking users to enjoy Reddit in their native language." This quarter, machine translation brought in four times as many users as last quarter. Based on the success so far, we plan on expanding machine translation to more than 30 countries by 2025.

Reddit's numbers make sense too. Advertising revenue increased by 56% in the past year, reaching $315.1 millions, while other revenue totaled 33.2 million. It makes sense that the introduction of machine-translation led to an increase in views, which led to an increase in advertising revenue. Simple as that.

The $33.2 million in other sources is not nothing. It's likely that the OpenAI and Google partnership contributed significantly to this.

It is impossible to ignore the influence of Google's well-known prioritisation Reddit pages on its search results. We'd expect to see advertising revenue increase when Reddit pages appear at the top of a growing number of Google searches.

Whatever the reason, it's great news for Reddit. It must be a milestone moment, given that it has been in the red for almost 20 years. This shouldn't be overstated, as Reddit did fine with its millions in revenue.

This is a milestone for Wall Street investors who will be hoping that this newfound profit pays literal dividends.