Reddit says it's looking for more acquisitions in adtech and elsewhere | TechCrunch
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Reddit says it’s looking for more acquisitions in adtech and elsewhere
Reddit is gearing up for more M&A, the company told analysts on its fourth-quarter earnings call on Thursday. Reddit CFO Andrew Vollero said the online forum site is looking for businesses that can either leverage Reddit’s scale — meaning their products become more impactful when deployed across Reddit’s massive user base — or help grow the company’s user base.
“[We’re] looking to buy capabilities, technologies, and companies,” he said during the introductory remarks.
Investors, obviously, wanted to know more — particularly about what the company had in mind when it came to scaled opportunities.
In the Q&A portion of the call, Vollero clarified, “I probably wouldn’t overthink the scaled opportunities. I would just look at it as sort of a spectrum of opportunities.” He reiterated that the company was looking for capabilities and technologies that could add to its business, noting that it’s been successful doing this in the past.
“It’s really been one of the secrets of our success,” he pointed out.
Vollero explained that Reddit’s adtech team in particular had been adept at “tucking in” acquired technologies rather than building these things themselves.
“Saves us six months to market, saves us twelve months to market, and you have a proven product,” the CFO remarked, crediting these deals with helping Reddit improve its monetization capabilities as an ad-supported business.
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Still, Vollero cautioned that while adtech acquisitions have been what worked in the past, the company is “not ruling anything off the table.” That’s why he had mentioned that Reddit might buy companies that could deliver when added to a company of its size.
The company in the quarter reported strong earnings, with $726 million in revenue, $690 million of which came from ads. Its global daily active unique users were up 19% year over year to 121.4 million, and its earnings per share of $1.24 beat estimates.
Reddit also said it sees a growing opportunity of generating revenue from its AI search product in the future, which raises the question as to whether the company is looking to this area for M&A, too.
Reddit, which has been ramping up its AI investments in recent months, including an AI search engine, has acquired startups before. In recent years, it snapped up adtech players and AI optimization tools, including Memorable AI in August 2024.
Designed to enhance Reddit’s advertising tools, the acquisition joined a handful of others from 2022, including AI platform Spell, designed to boost Reddit’s machine learning capabilities; Spiketrap, which focused on improved ad targeting; Oterlu, which developed machine-learning moderation tools; and MeaningCloud, another startup bought to improve Reddit’s machine learning and text analytics capabilities.
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